The battle over air service development

November 5, 2018

Joseph Pickering, Business Unit Leader, Aviation ServicesNo matter what size community you live in, having an airport that connects you to the global air transportation system is key. For example, in its search for a second headquarters, Amazon required that potential cities be with in 45 miles of an international airport.

Aviation has directly created 9.9 million jobs and created a $664.5 billion economic impact, according to “Aviation Benefits,” a 2017 report published by the Industry High Level Group, an ICAO initiative. Its members include the heads of ICAO, ACI, IATA, the Civil Air Navigation Services Organisation (CANSO) and the International Coordinating Council of Aerospace Industries Associations (ICCAIA).

So what are airports — large and small — doing to balance keeping existing air service with boosting frequencies and adding new flights? Many of them choose to hire air service consultants to help.

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Every firm interviewed in this story cited their expertise, their staff with airline experience and connections, but is that enough? How do you show off your work, but also not just tell airports what they want to hear when it comes to air service?

Joseph Pickering is the Business Unit Leader for Mead & Hunt’s Air Service Consulting Group. Because each airport’s situation is unique, the first thing to discuss are the goals of the effort, he said.

“Is this a one-off project providing technical guidance or a longer-term air service development effort for an airport looking to grow existing service, add new domestic service, re-establish lost service or looking to strategically pursue new international routes,” Pickering asked. “We also ask to review any past air service development efforts to see if we can build on those efforts or if we’re starting fresh we tell them we need to complete a market study to determine the market’s potential, the number of air travelers and where they are going.”

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The airlines typically have more route opportunities than there are aircraft to fly those routes so airports are competing for a limited asset that is easily deployed where it has the potential for the best return on investment, Pickering noted.

“Air service development can be a highly competitive undertaking. Recently the industry has been constrained by a regional airline pilot shortage, which means that air service development at smaller airports has become even more competitive,” he said. “With aviation fuel prices increasing we’ve seen some airlines respond by eliminating ‘thin’ or underperforming routes, making the hurdle even higher for new markets to be launched.”

Having worked with many airports and airlines, Mead & Hunt has a good sense of what is realistic and credible once the relevant background work has been completed, said Pickering. “That usually takes some analyses to determine realistic opportunities and to set priorities and we sometimes have to tell the airport that we don’t see a possible market as being viable,” he said.

“For example, if the market study indicates an airport has 10 passengers traveling daily each way between a potential point-to-point route, then that potential route wouldn’t be considered a target route,” he explained. “We review our analyses and assessment with client airports to make sure there is a clear understanding of what is realistic, where to focus our efforts, what will be required to move this forward and the resources and timeline that might be required.”

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Launching a new route can sometimes take years before coming to fruition, said Pickering. “Some airports view working with a nearby airport a conflict so we determine if there’s a perceived conflict before proceeding,” he said. “Other factors include the airports level of experience and organization with regard to their air service development efforts.”

Pickering highlighted Mead & Hunt wins including Indianapolis-Paris, Monterey, Calif.-Denver, Colorado, St. Louis-San Jose, Daytona Beach, Fla.-Toronto and Wilmington, N.C.-Chicago, to name a few.

First, have realistic expectations about your market’s potential and understand that results may not be immediate and usually take time to develop, Pickering warned. “Be prepared to discuss your current and past air service development efforts, the history of your market and the wants/needs/goals of the community,” he said. “Second, most airport staff don’t come from an airline route planning background steeped in data analysis, strategic planning and route forecasting, but many air service consulting firms do and are experts at developing the credible analyses needed to develop a meaningful proposal to pitch to airline planners.

“As air service development consultants, we employ similar methodologies, talk to airline planners on a frequent basis and can represent and advocate for the airport over time as various airlines consider their air service proposals,” said Pickering. “Third, an air service consultant can help the airport set realistic expectations for the community by updating them on industry trends, the often-changing air service environment and help them to understand how their market fits into airline priorities,” he stated. “Finally, consider working with air service consulting firms that have staff with previous airline route planning and airport experience, have established relationships and credibility with all of the carriers important to the airport, are financially stable and have been in business for many years with a track record of success.”