THE FUNDAMENTALS OF ROUTE DEVELOPMENT MARKETING TO AIRLINES AND THE - - PowerPoint PPT Presentation

THE FUNDAMENTALS OF ROUTE DEVELOPMENT

MARKETING TO AIRLINES AND THE “PERFECT” PRESENTATION

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AIRLINE FEEDBACK

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AIRLINE FEEDBACKS

“We gather much of the airline-related data (e.g. pax profiles by route, airline schedules) from our own sources and don't necessarily need them from airports”. “A profit/loss assessment is least important because the airline will calculate this on its

• wn, using internal data; the airport or consultant's data will not be as accurate, so it's

better for the airport to focus on and share other data about its market that is not generally available to the airline route planner.” “Legal aspects of international operations, e.g. intergovernmental air traffic agreements”. “Information about leakage and transfer versus point to point very useful”. “The key consideration is airport needs to make a case on traffic segmentation to ensure viable service vis a vis airline competitiveness and positioning”.

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AIRLINE FEEDBACKS

“Information about leakage and transfer versus point to point very useful”. “When an airport proposes a new route to a city that is not one of the airline's hubs, it usually means they have not done their homework”. “A crystal clear understanding of our business is not required, but should be inherent in the nature of business proposals - i.e. do not suggest something which based on information reasonably available to the public would not be in scope.” “Knowing if there are marketing/advertising/incentive funds available to support new routes (how much and in what form) is helpful”.

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AIRLINE FEEDBACKS

“Information about leakage and transfer versus point to point very useful”. “Airports need to understand better airlines' different business models and suitability to the routes they are proposing”. “Continue to approach in a collaborative effort along with ways in minimize startup costs” “For full service airlines seeking to attract corporate passengers, a partnership with the local business community and attendance at some Routes events could be interesting for airlines”. “Route analysis with proposed schedule, economics of the flight, incentives scheme, contact of local tourism organizations and big corporates, and legal study of the route”.

“Work as a destination rather than individual entities in a location”.

“Better understanding of what the Airline's Network Strategy is to be able to present clearly what will attract the airlines attention”. “Identify opportunities to reduce airport costs for airlines and customers”.

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AIRLINE FEEDBACKS

Airline Survey: If Route development were perfect what would it look like?

“Information about leakage and transfer versus point to point very useful”.

“Airports need to understand the small profit margins airlines obtain and how these margins are placed under severe pressure with a slight increase in costs” .

“Identify opportunities to reduce airport costs for airlines and customers”.

“A positive outcome (meaning profits) for every new route, with honest and open collaboration along the way”. “It would be fully in sync with what airlines are seeking to do”. “A detailed accurate set of numbers in a business case covering all risks to airline should a new route be introduced”. “Tourism would fund 50% of route marketing, airport charges are abolished and instead airport drives revenues from non aeronautical revenues”. “More balanced profits for both airports and airlines”. “Increased willingness to participate in the financial risk of launching and successfully maintaining a new route”. “Understand our priorities - ideally get a pretty good idea from publicly available sources/consultants. Reach out to us in advance for quick pointers

• n our priorities pre-meeting. Present clear succinct information to us. We need sustainable long term cost base which includes certainty from our

airport partners and rewards ongoing growth with declining year on year costs”.

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“Perfect Presentations” Are about…

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“PERFECT PRESENTATIONS”

Numbers

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TRAFFIC FORECAST

Example illustrates the depth

• f detail airline will want to

see. Network carriers consider the breakdown by segment type. For point to point carriers can focus on local traffic only. Airlines will do their own forecast, but this gives the pitch credibility and demonstrates that a scientific approach has been taken to show that the opportunity is viable. Beyond/Behind Passenger Forecast Detail relevant for network carriers. Statement about strength of forecast and view of resultant market share. If perceived weakness relative to other choices then mitigation measures need to follow.

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MARKET SIZE DATA

• How big is the

market today?

• Which airlines are

carrying the traffic?

• How much is

direct vs. indirect?

• Through which

hubs are indirect passengers connecting?

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MARKET SIZE COMPARATORS

• What are our

largest unserved markets

• What are the

largest unserved markets for our target airline

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AVERAGE FARE COMPARATORS

• How do the

average fares in

• ur market stack

up against others in the region, and

• thers in the

airlines’ network?

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INCENTIVES AND TRAFFIC DELIVERY

Address how route will be supported to ensure traffic and if necessary to move

• pportunity up the ranking of choices for the airline

Marketing plans Stakeholder support Outbound/Inbound/Connectivity traffic driving plans Yield improvement plans, through high value passenger customer engagement Corporate sales brokering Route incentive programmes

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“PERFECT PRESENTATIONS”

Listening

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Q & A/ SALES DISCUSSION WITH AIRLINES

Example questions:

• How does the opportunity sounds to you?
• What would it need to look like to be seriously considered?
• What needs to be done next to move the opportunity forward?

Establish objections (reasons why they wouldn’t operate the route)

• E.g. low yield. Counter through examples, comparison stories, or agree to revert back post

meeting. Establish obstacles (reasons why they can’t operate the route)

• E.g. bi-lateral restriction. Agree action plan to address and revert back post-meeting. Agree

position with airline assuming obstacles are removed in the future.

• Ask for agreement of next steps. How can this opportunity be moved forward?

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“PERFECT PRESENTATIONS”

Conciseness

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“PERFECT PRESENTATIONS”

Being remembered

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APPENDIX

Support Information

To answer questions, not to be presented

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APPENDIX

Airlines take little notice of catchment since most airports overstate it. Include ONLY if needed to illustrate that current traffic is understated due to leakage, as airlines use traffic data to assess market size, not catchment. If being shown, needs to be realistic and consist of population for whom our airport is the most accessible for travel to their destination. Catchment areas can vary by destination depending on the routes served by competing airports in the

• region. Show catchment area as it relates to the airline/route being targeted.

Compare to catchment areas of competing airports

Catchment Size

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APPENDIX

Catchment Characteristics

Key information about the strength of the catchment, for example:

• GDP Growth/Economic Performance/Investment information
• Hotel stock/development information
• Diaspora information
• Corporate information if relevant: e.g. Fortune 500 companies in the area with travel requirements

relevant to the airline

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APPENDIX

Current Air Service Network

Background Information Only Include ONLY if airport is not known to the airline. Provides airline with some perspective about the destination's potential Identifies for the airline if there is existing service to markets that are comparable to their home market. Identifies for the airline a potential connecting network that they could access.

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APPENDIX

Point of Origin and Purpose of Trip Info

Our Market XX% Airline’s Home Market XX%

T

• urism

XX % VFR XX %

8%

Business XX % Point of Origin Purpose of Trip

Useful to an airline to know if this airport is primarily a destination vs. origin market. Provides insight into yield potential, and level of tour

• perator involvement required.

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APPENDIX

Fees and charges

Key is comparison with alternate choices for airline Compare airport fees and charges with competitors for proposed aircraft