Strategic Airport Management Programme 9-13 April 2007Relationship between Airlines and AirportsWhat is an Airline to the Airport?A Business entity? A Client? A Customer? A Consumer of Airport Services? A Service Provider? An Operator? A Problem?Strategic Airport Management Programme 9-13 April 20071Can Airlines be……Partners Team Players AlliesStrategic Airport Management Programme 9-13 April 2007Airport Operators’ ApproachSeek to understand the airline business Recognize the airlines’ needs Help airlines in good times and in bad Work with airlines to make their business viable Mediate between airlines and other government agencies or regulatorsStrategic Airport Management Programme 9-13 April 20072Airport Operators’ ApproachInvolve airlines in the development of the airport and air transportation Keep airlines informed of the airport business:business:Help them understand the airport business and strategy Forge synergies with the airlines Develop a symbiotic relationship and seek a winwinwin formulaStrategic Airport Management Programme 9-13 April 2007Engaging the AirlinesRegularly engage airlines in dialogue on airport operations, plans and even problemsAirport Facilitation Committee Airport Operations Committee Ramp Operations Committee Air Cargo Facilitation Committee AirportAirport-Airline Meetings Airline Operators’ Operators’ Committee Board of Airline Representatives Regular dialogue with airlines oneone-onon-oneStrategic Airport Management Programme 9-13 April 20073Common InterestsEfficient ServicesQuality service delivery, onontime departureFacilitiesproper information and signage for airlines, airport operators and pax Sufficient pax facilitiesCostsCompetitive costs and value for money servicesStrategic Airport Management Programme 9-13 April 2007BeneficiariesTransport Ministry and civil aviation authorities Airlines Other airport companies Promote traffic Ultimately, passengersStrategic Airport Management Programme 9-13 April 20074Changi’s Successes83 airlines, connected to 57 countries in 182 cities, over 4,100 weekly scheduled international flights Changi as a hub with full spectrum of airlines operationsphysical services, joint services, codecodeshare alliance operations (STAR, oneworld, oneworld, Skyteam) Skyteam) freightersOver 90 bilateral air services agreements Record 26 awards from aviation industry (including airlines)Strategic Airport Management Programme 9-13 April 2007Perennial ChallengesEven handed relationship between national and foreign airlines The place of national carrier and homehomebased carrierManaging perceptions with realityChanging state of passenger expectations and passenger needs Rising competition from other airportsStrategic Airport Management Programme 9-13 April 20075Airline-Airport PartnershipA partnership that can pass the test of time and difficult issuesKept landing and parking charges unchanged for the past 20 years Incorporated pax service charge in air ticket Incorporate new airport security charge Relocation of airlines in different terminals Bearing through the airport infrastructure upgrading works Authority taking the role as mediator, arbitrator when airlines have problems among themselves or with other agenciesStrategic Airport Management Programme 9-13 April 2007Weathering Crisis Together1997 Asian Economic Crisis1 year 10% rebate on landing and parking charges Rebate on rental charges Airlines maintained their services and connectivities2001 Economic Recession and Post 9/111 year 10% rebate on landing and parking charges 15% rebate on rental charges 4.2% rebate on property taxes (passed on from govt) govt) Most airlines maintained their services while stronger airlines increased servicesStrategic Airport Management Programme 9-13 April 20076Weathering Crisis Together2003 SARS Crisis (May(May-Dec 2003)30% rebate on landing fees 10% rental rebate for all airport tenants Waiver of Minimum Monthly Guarantee (MMG) for landside shops and restaurants Automatic reduction in MMG payment (pegged to pax traffic) for airside tenants Most airlines able to tide over difficult times of declined in trafficStrategic Airport Management Programme 9-13 April 2007Facing the Future TogetherEnhancing airportairport-airline relationship Deepen dialogues and partnerships Enhancing mutual understanding of each other’ other’s challenges, problems and needs Increasing competition amongst airports/airlines Dawn of airline alliances Rise of low cost carriers Threats from global terrorismStrategic Airport Management Programme 9-13 April 20077Route DevelopmentAirport take a proactive role in route development Provide appropriate data, information and analysis specific and targeted at airlinesEstablish the origin and destination traffic Determine connectivity waves Information on fundamentals of economy and opportunities of growthStrategic Airport Management Programme 9-13 April 2007Market ForcesLeisure travelers are going more places, more frequently, for shorter trips The Expansion Of Leisure Travel Market Drives LCC Growth, Not a Switch From Full Service CarriersHighMarket"Discretionary"Multiple Vacations Second Main Vacation Weekend Trips HighMarket SourceTravel CreationTravel FrequencyPremium / Full Service Travel Untapped Aspirational TravellersOrganic Growth“Trade Up”/Modal SubstitutionNo Vacation/ VFR Regional Trip Farther Domestic Vacation International VacationPrice“Need”LowLow Cost Leisure TravelSwitch From Premium RailLow Low Income $ HighStrategic Airport Management Programme 9-13 April 20078Competitive AnalysisCountry demographic and economic trends Air Traffic Growth and Trends Current and historic Airline services Country’s competitive positionNo Service Under Supply Good Supply Competitor Airports0Analyse route structures1020304050607080Number of Routes/Destination ServedSeats/Tonnage Per Week.Identify routes for further expansion Diversify routesRoutes with growth potential Weighed against region’s averageDestinationsStrategic Airport Management Programme 9-13 April 2007Explore potential new routes to develop Mitigate dependence on any one marketSWOT AnalysisStrengths WeaknessesMarket Physical Operational CommercialThreats Opportunities Strategic Airport Management Programme9-13 April 20079Identifying and Prioritizing Areas for Improvement Existing Weakness Critical Success Factors Capacity Terminal constraints Financial Performance Profitability of Hato Airport Operations Improve efficiency, reduce Opex Commercialisation Optimise non-aviation revenue Logistics and Distribution Centre Network Improve economics of route network Air Hub developmentGap AnalysisFuture StrengthStrategic Airport Management Programme 9-13 April 2007Route AnalysisNumber of routes served compared to competitorsAverage Corsica Crete Sicily Sardinia Southern Italy Cyprus Airport X Balearics 0 10 20 30 40 50 60 70 80Number of Routes ServedStrategic Airport Management Programme 9-13 April 200710Route AnalysisNo Service4,000 3,500 3,000 Airport X 18 Regionals Avg.Under SupplyGood SupplySeats/Week2,500 2,000 1,500 1,000 500O M r ly r le a r s e s d e ille G au lle M un Ba ich rc el on H ea a th ro w R om e G at w ic M k al pe ns a Fr a Am nk st furt er da D m us se ld o H am rf bu r At g he ns C ha N S t ic e ut tg ar t H an ov er M ad r id C ol og ne M ap le Bo s lo gn a Ve ro na Tu ri Ve n ni ce0Strategic Airport Management Programme 9-13 April 2007Route AnalysisQuantifying Opportunities for Additional FlightsFlights/Week Seats/Week Potential Future FlightsExpand ServiceOrly Marseilles de Gaulle Munich Barcelona Naples Bologna Verona Turin Venice Nice Stuttgart Hanover Madrid CologneAirport X Region Airport X 7 1008 1928 2 288 1844 2 288 945 2 288 735 1 144 534 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2438 2160 1782 1733 1688 1370 588 587 538 516Delta -920 -1556 -657 -447 -390 -2438 -2160 -1782 -1733 -1688 -1370 -588 -587 -538 -516Target 70% 25% 70% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 70% 25%Seats 644 389 460 112 98 610 540 446 433 422 343 147 147 377 129Seats/AC 124 133 70 110 110 70 100 100 100 100 100 70 70 70 70Flights 5 3 6 1 1 8 5 4 4 4 3 2 2 5 2New ServiceStrategic Airport Management Programme 9-13 April 200711Route OpportunitiesOpportunitiesPotential New Direct Service Expanding Existing Routes Other Key Service ExpansionStrategic Airport Management Programme 9-13 April 2007Route DevelopmentConduct costcost-benefit analysis visvis-à-vis other routes to market the routes Package incentives for airlines together with other government agenciesStrategic Airport Management Programme 9-13 April 200712。
