2017 World Routes, Barcelona
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Barcelona welcomed from 23 to 26 September 2017 about 2,600 delegates from 130 countries and a record of 275 airlines for the 23rd annual World Routes forum, the global meeting place for airlines, airports, tourism authorities and government bodies that want to plan new flights and increase existing services. 

In the panel debate on Europe all speakers referred to the European long- expected-and-hoped-for airline consolidation that has been set into motion and will be completed within the following couple of years under different forms, from joint ventures to franchising. Speakers pointed that Europe has been behind the US in consolidation and there the big consolidated airlines are highly profitable and still growing.” Such development is welcomed as it is expected that all partners will benefit from one other’s strengths”.

On the issue of Brexit, it was pointed out European airlines remain in the dark about what Brexit will mean for their business prospects and expressed concern that the final details could be resolved in a last-minute rush, with vital details overlooked, “anything from a technical issue to a piece of regulation”.But they expect a deal that will allow airlines from the UK to fly to Europe and airlines from Europe to fly to the UK.” “But we just don’t know” This uncertainly means however that there will be additional cost that would have to be accounted for with new sources of revenue.

On the issue of new technology, speakers pointed that Airlines have to choice but to innovate as The advent of Big Data will further disrupt the aviation industry over the coming years. Delegates expect to see great innovation taking place in terms of customer relationship management. Carriers will use technology effectively to understand the customer and airlines will become much “more than flying from A to B”. They also stressed the importance of the low cost business model. Many full-service carriers have attempted to start LCCs and 90 percent have failed because it requires a different management mentality.The airlines that will succeed will be “those that understand the customers and can bring the fares down as a result”.  

Source: Routes


Within the framework of the Routes 2017 Conference, the ATN - Air Transport News team carried out an interview survey with airport officials to gain some insight into the way airports and airlines cooperate in route planning and route management, to dig out some information about impending new route launching and the way future route planning in planned and prepared. 


The following executives participated: 


ï   Tobias Lyssy, Cologne Bonn Airport Director Aviation development marketing and sales

ï   Ivan Tan, Senior Vice President corporate and marketing communications of Changi Airport

ï   Jasper Spruit, Vice President for traffic development of Avinor

ï   Kam Jandu, Chief Commercial Officer of Budapest Airport

ï   John Ackerman, Executive Vice President Global Strategy and Development of DFW

ï   Christina A Cassotis, CEO of Pittsburgh Airport

ï   Maria Kouroupi, Senior manage marketing and communications. Hermes Airports

ï   Jean- Luc Poiroux, VP Business Development at Bordeaux Airport

ï   Yves-Daniel Viredaz, Head of Marketing and Business Development at Geneva Airport

ï Ioanna Papadopoulou Director, Communications & Marketing at Athens International Airport


The three questions that all participants were asked to reply to were: 


ï  Given that it is the airlines that incur the most risk when launching a new route, what do airports do to help airlines to share the    risks.

ï   The most recent announcement concerning the launch of new services.

ï   Whether they plan to move aggressively in the opening of new markets or they are selective and move more     cautiously. 



First of all, it was stressed that airlines enter a market only when they see an opportunity, when it makes economic but airports  are prone to take risks , since if the route fails both the carrier and the airport will experience financial losses and reputation damages. 


In the past some airlines launched services for. eg. to Budapest only to cancel it the following year. And this is something that airports do not want. Therefore, the interviewees pointed out that although, in the past, airlines were the ones to grow the markets and the airports remained passive now airports take a more active role and share the risks of launching a service to a new market. They have developed all these tools after working for several years with airlines and checking what they are looking around for. 


Airports "do not want to sell something that does not exist" (Geneva) and they put a lot of effort to make sure that "they chose the right airlines and they go after the right markets".  As DFW put it "We are very selective about the carriers that we pursue, we have developed a quantitative model with 12 different variables and that helps us identify the carriers that are mostly likely to be successful at our airport and that is how we build our target list". On the other hand airports like Hermes in Cyprus are actively involved with the airlines and the stakeholders to ensure  that  the route can be developed by reinforcing  leisure demand.


Airports want to be "as involved as airlines are in the success of a new route" to share the risk and guarantee the success.  Interviewees divided the actions they undertake into "prelaunch activities" and "after-launch" activities (I.P. Athens Airport)


The prelaunch activities include for some airports, such as  Cologne Bonn Airport, keeping a deep data base putting in variables such as whether the new route is  a VFR route, whether there is strong ethnic communities around, whether it is a leisure-driven route, whether there are corporate travelers. This airport is in close contact with the tour operators and corporate travel managers operating in the area to follow and record the different travel changes around the airport to update and build a solid data base which can be provided to the airlines later on. 


All participant airports offer incentives in the form of reduced charges to new airlines launching service to their airports. Avinor, for e.g., offers three years of discount for the new European routes and five years of discount for the new long haul routes while Geneva Airport offers incentives on landing charges for long haul flights in the first four years. 


DFW, Dallas, changed its financial incentive model last summer from a short medium long haul scheme to pay a certain amount per seat mile because as an airport they hope to have bigger aircraft flying long distances and that what available seat mile is and they believe that this scheme makes easier for airlines to understand how the airport's incentive programme will reduce their cost per available seat mile. 


On top of that, DFW offers another incentive plan for markets that are strategic to them consisting of an extra bonus so there is a certain amount that the airport pays for any new city and any specific cities that they have identified as important they pay extra to make sure that the carrier will be successful particularly in that first year when the route is developing and maturing. Budapest Airport also offers discount on the higher passenger service components. Hermes(Cyprus) also offers incentives for the winter traffic in an effort to smooth out the demand and encourage year round operation to the island.


On the after launch level, as airlines understand that a new route is a route that has not be flown before, so the demand may not be very strong at the beginning and work very close with airlines on marketing programmes to create greater brand awareness at both ends of the route so that so that people will be able to utilize it and the route is successful quickly.

Hermes Airports for example, organises trade workshops to help Tour operators and agents become aware of the route on both sides  and  co-invests with airlines and tourism boards to implement direct marketing campaigns using primarily online media. 


Geneva Airport has a dedicated marketing budget to help airlines do digital activities, campaigns, PR activities, all aiming at enhancing operations in the market. 


DFW has developed a performance report to track the financial performance of each flight and they meet with the airline on a quarterly basis so as to identify early  if  a  particular route seems to be suffering. 

On the question of new routes to be announced within the year the participants stressed the importance of the conference as it gives the opportunity to all stakeholders of route planning to meet, discuss, to build connections and even close deals. Many participants were reluctant to disclose much information about new routes for both competition reason and because as is the prerogative of airlines to proceed to such announcements. They all stated that there are quite a few new routes and that they all have experienced significant growth in new services. 


Changi Airport stated that Norwegian will begin flying from Gatwick to Singapore, which will be their longest low cost airline flight out of Singapore. They consider it a very important move as the long haul price sensitive market segment offers much potential. This airport sees a lot of new destinations coming out in China and India- the two fastest going markets- there are 32 city links from Singapore in China and 16 cities in India.  


Budapest airports stated that next year a transantlantic flight will be started by LOT Polish Airlines from Budapest to New York flight four times a week and twice a week to Chicago and "they have managed to persuade American Airlines" to launch from next year  a daily service from Budapest to Philadelphia which will connects to the rest of the US network. They are really satisfied with this development- long haul destinations are "sexy"- as the airport did not have a direct transatlantic route for the past five years as 75-80% of their traffic is inter European. 


Geneva airport is looking around for long haul services but nothing is confirmed yet. 


Athens Airport also puts a lot of emphasis on the development of long haul services; as a matter of fact, Athens’ connectivity, in terms of new long-haul  routes, was substantially increased within 2017; Emirates started operating to New York, Scoot to Singapore and  as of September 30th there is an Air China direct operation from Beijing to Athens.


In DFW there will be a new route Rio de Janeiro with seasonal service after a two year hiatus.


Hermes Airports is very happy with the introduction of 7 new routes  particularly from markets that were highly sought such as Ireland, Spain, Germany and the Baltics. The fact that the majority of these will continue in the winter season serves another strategic goal.

When asked about their future planning, airport officials answered that they combine aggressive and selective strategy and they follow different tactics depending on the airline they are dealing with. They seek extra frequencies through networks and hubs and extra point-to point services.

But their first concern is to solidify, stabilize and sustain the existing growth and then continue to grow "to reduce the gaps in connectivity" (Hermes Airports). Pittsburgh airport first examines the status of development, examines the world according to world region and the US according to region and after they gain enough service to the places they are successful, they change their strategy for the routes.  


When dealing with network hub airlines airport strategy is to persuade them to increase frequency and volume of the existing services. Changi Airport examines frequencies in terms of yield and load factors so as to a make daily a three times a week service or to change a narrow-body daily service to a wide body aircraft service. 


But with point-to-point airlines, especially low cost ones- airports offer more destinations demand. But opportunities for new destinations in certain regions, such as Europe, become less and less. And as Budapest Airport said that the threshold and cutting off point to start a flight used to be 10, 000 to 12,000 passengers but now it has fallen to 8,000 passengers. 


Smaller airports, such as Budapest airport, say that they do not mind where growth is coming from while others that have expanded substantially in recent years- DFW added 30 international destinations in five years- prefer to move cautiously and be selective in choosing new destinations.  As they believe that there aren't another thirty cities that will make sense in the next five years- they see only five to ten realistic targets- they plan to move "more surgically" and go after the partners they want. 


Athens International Airport also started that besides long – haul routes and their importance for the airport’s and the city’s connectivity, a segment of traffic where they find that there is potential for incremental traffic is the Niche Routes’ segment of traffic.


Bordeaux Airport raised an interesting point in route planning by stating that they do not have an aggressive attitude in terms of developing and they try to balance the airline's portfolio, to have a nice balance in operative routes with non-operative route. They do want to avoid too much competition on the same route as they consider it useless to have several airlines on the same route, to fill very quickly the offer as in the long term it is difficult for one or two of them. They try to preserve and protect the first one to come to take the risk to open a new route  at a certain stage when the route has reached a certain level of maturity, then they can accept to have a good and fair competition. 


Another interesting point raised by Geneva Airport, which certainly concerns many other airports around the world- is that of capacity issues. Restraint in capacity forces them to seek qualitative growth rather than a few more volumes. They do want long haul services but only where they believe there is potential, "not anybody at any cost". 


Cologne Bonn Airport pointed to the uncertainty of the air navigation market and how airports and airlines' business is interconnected. Cologne Bonn Airport faces an uncertain year 2018  as this will be influenced by the disappearance of Air Berlin and the subsequent Air Berlin market change in Cologne and the doubts over the market share of Air Berlin & Niki, which is about 9% at the airport in Cologne. They added that they will at least maintain their current passenger volume and hope that airlines will put more volume into Cologne again. 


DFW goes as far as coinvesting with partner airlines in regions they consider important as they have done with Etihad of the UAE. 


Avinor, that manages 45 airports in Norway, has a most thorough route planning scheme as it keeps dedicated route developers at its base in Oslo but also local intelligence in the country and abroad, in the US and in Hong-Kong, and is in close contact with local partners and local tourist offices to get regional knowledge. 

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