Passenger Air Service Development Techniques (2009) / Chapter Skim
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Adequate air service is a prerequisite for attracting investment and generating employment. Air service is directly related to the amount of economic activity in an area, and additional 1 S U M M A R Y Passenger Air Service Development Techniques
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2 Passenger Air Service Development Techniques Understanding how air carriers decide which communities they will serve is fundamental to developing an ASD program.
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As a result, almost all small airports suffer from "passenger leakage" -- a phenomenon in which passengers bypass the nearest airport and instead choose to fly out of a competing facility. Airports surveyed for this research effort reported that the primary reason they lose business passengers to other nearby airports is the greater range of choices available there -- nonstop flights, more convenient arrival and departure times, and more frequent flights.
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. 4 Passenger Air Service Development Techniques Major Competitive Challenge Communities Proximity to legacy network hub Logan, UT Kalamazoo, MI Toledo, OH Rockford, IL Harrisburg, PA Colorado Springs, CO Proximity to airport with LCC service Huntington, WV Daytona Beach, FL Santa Rosa, CA Mobile, AL Rockford, IL Harrisburg, PA Small, isolated communities Butte, MT Marquette, MI Idaho Falls, ID Victoria, TX Dickinson, ND Fragmented market Greenville, NC Ithaca, NY Mobile, AL Lawton, OK Florence, SC Stewart (Newburgh)
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Figure S.1 summarizes the major elements of an ASD program. Assessing Existing Service and Stakeholders An effective ASD program begins with a realistic assessment of an airport's services and facility to identify how its air service can best be improved.
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Two general areas of financing are available to meet an airport's ASD funding needs: revenues generated by the airport itself and revenues derived from other sources, such as private corporations, tourism organizations, and government at various levels. 6 Passenger Air Service Development Techniques 0% 10% 20% 30% 40% 50% 60% 70% 80% Circuitous routings Turboprop rather than RJ Difficult connections Inadequate capacity Unreliable service No low-cost carrier Top destinations not served non-stop Fares too high Percent of airports surveyed Figure S.2.
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Table S.2 summarizes how much airports of different sizes devoted annually on their ASD efforts, including contributions from non-airport sources. Reflecting their considerable Summary 7 Key ASD program elements: • The greater the involvement of private corporations in your ASD efforts, the greater the likelihood of success in retaining existing or attracting new service.
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Most frequently mentioned ASD goals. 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% Retain Existing Service Add Service to Other Hubs Add Frequencies Lower Pricing Improve Service Reliability Upgrade Aircraft Used Percent of airports surveyed
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That is, if the target market is one where the new entrant airline would be the second carrier offering nonstop service, the airport will likely have more difficulty persuading the airline to start service, especially during difficult economic times. Selecting a Strategy and Techniques for Air Service Development ASD techniques can generally be divided into two broad categories: those designed to boost a carrier's revenue through promoting passenger demand or ensuring that revenue achieves a minimum threshold, and those designed to induce carriers to supply air service by eliminating or offsetting some of their costs to launch new service.
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ASD teams should understand those preferences when selecting ASD techniques and meeting with air carriers. One or more of the airports surveyed have used each of the ASD techniques discussed.
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Securing air service may require a Summary 11 0% 20% 40% 60% 80% 100% Other Hired consulting firm Marketing Assistance -- Carrier Match Marketing Assistance -- No Carrier Match Direct subsidies Guaranteed ticket purchase Revenue guarantees Non hubs Small hubs Total Figure S.4. ASD techniques used by small airports.
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Most of the airports surveyed reported that they presented their cases to the airlines directly at headquarters meetings. A majority of small hubs also reported that they met with 12 Passenger Air Service Development Techniques 0 20 40 60 80 100 Other Business Travel Information Research on Leakage Demographic and Economic Data Projections or forecasts Route analysis Business case to airlines PercentSmall hubs Non hubs Total Figure S.5.
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. Similarly, keeping in mind the importance of maintaining existing service, the effects of any new ASD efforts should also be checked against incumbent carriers' operating results.
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Analyzing the results will also help the ASD team consider whether alternative ASD techniques might be more effective in the future. 14 Passenger Air Service Development Techniques
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