The Constant Gardener – inside the real world of air service development

Aviation provides the only worldwide transportation network, which makes it essential for global business and tourism. As such it also plays a vital role in facilitating economic growth, particularly in developing countries and even a single new route can deliver significant benefits. Competition for securing new air services is increasingly intense as airports fight for airlines’ aircraft capacity. But, senior officials on a panel discussion at the CAPA – Centre for Aviation Americas Aviation Summit 2018 make comparisons between the multi-billion dollar industry to gardening.

Speaking at the event in Houston, Texas, USA, Sonjia Murray, executive consultant at InterVISTAS Consulting described the air service development community as “constant gardeners,” adding, “we are planting seeds for future growth and always pruning our current portfolio to ensure it looks the best and lasts.”

In recent years airports around the world have become much more active participants in the aviation equation. They have engaged airlines at the network planning level and, often together with local business and tourism interests, offered incentives for new air services. The advent of smaller wide and narrow body aircraft also are suddenly introducing new prospects, long and short haul, introducing city pair opportunities that would never have been viable in the past.

Tony Davis, member of the advisory board, Irelandia Aviation, a LCC developer, warned though that while airlines will be open to incentives, especially LCCs, they are just one factor in any route decision, that has to ultimately be based on “pure good economics”. “Incentives are great, but what happens when that deal ends?” he adds.

Inevitably geographic position plays a large part in an airline’s decision whether or not to fly to an airport, but there are many other factors at play. In the US, a large number of airports have suffered reduced service post-consolidation and are actively seeking both domestic and international airlines to rebuild their traffic. There can be extensive synergies between domestic and international operations in terms of locking them in for the long term, so the process of attracting new business can require sophisticated market solutions.

Vicki Jaramillo, senior director marketing & air service development, Orlando International Airport, says that as a non-hub airport the popular Florida leisure gateway has to look a little differently at its network strategy with a focus on point-to-point flows. “We have to be a good storyteller,” she acknowledges, “but, we also have to make sure it works.”

“From a personal perspective I prefer a cautious approach from airlines as we can then build together with additional frequencies and larger aircraft as the market proves itself,” adds Ms Jaramillo.

It is clear that there has been a rise in “experimental” international routes, which can be fragile to even the slightest change in market conditions. Aside from ensuring they have the appropriate facilities, fee structure and services to meet the needs of their airline customers, there is huge untapped potential for airports to share data and co-operate commercially with airlines for mutual benefit.

This could prove a key factor in attracting and retaining carriers assessing the viability of a new route, but Mario Diaz, director of aviation of the Houston Airport System at event host Houston Airports, warns that it will still be a long time before airlines and airports actively share all their data. “I think airlines are concerned we will take their passenger revenues,” he says.

One airport that has already had to significantly change how it approaches air service development is Lambert International in St Louis, a former hub for TWA which was closed by its successor American Airlines at the start of this decade due to softening demand.

“We went out to our community to see how we should focus our strategy,” says Rhonda Hamm-Niebruegge, its director of airports. “They wanted the return of non-stop connectivity so we have worked to deliver it, but with a focus on sustainability and long-term commitments in each of our airline pitches.”

A big step in this strategy will be delivered next month when LCC WOW air brings back non-stop connectivity with Europe when it introduces flights to St Louis from Keflavik International Airport, serving Reykjavik, Iceland.