Enhancing Air Service Through Community Partnerships ACI NA Marketing & Communications Partnering with Carriers

Transcription

1 Enhancing Air Service Through Community Partnerships ACI NA ACI NA Marketing & Communications Partnering with Carriers June 21 21, 2011 Bradley D. Penrod, A.A.E., CEO/Executive Director Allegheny County Airport Authority 1 11

2 History Historic post deregulation hub and dehubbing Key to partnering is a sustainable ti market kt Buildinggood good partnerships to work with your airlines Airport + Community Partnering = Successful Results 2

3 Changing Passenger Mix Passengers (million) Year O&D Connecting Total O&D % % % % % % % % * % % % % *Record volume Oliver Wyman analysis of U.S. DOT Domestic and International O&D Surveys, DOT T-100 Report for Foreign Flag Airlines and Pittsburgh International Airport Statistics 3

4 The Total Number of Nonstop Pittsburgh Destinations Has Been Stable Since 2008 Pittsburgh Nonstop Destinations by Year Source: Oliver Wyman analysis based on OAG Schedule data for November of each year. 4

5 Key to partnering is a sustainable market 5

6 Pittsburgh Has a Strong Business Market Eight Fortune 500 companies Home to more than 100 corporate or business unit HQs Pittsburgh Companies with Global Ties Westinghouse selects Pittsburgh for new HQ Creates 2,000+ jobs Major global companies based in the region include BNY Mellon plans expansion in Pittsburgh Creates 2,000+ jobs Old line industrial stalwarts that are long time global players. Operations in 44 countries. Operations in 37 countries. Presence in 39 countries. Operations in 42 countries. Old line line companies new to the global game. Made first foreign acquisition in Operations in 7 countries. Presence in 12 countries. Major acquisitions ingermany in 1993 and

7 Education & Mdi Medical lsector Leading the Nation Source: Pittsburgh Regional Indicator Education and Health Service jobs are significantly higher than the benchmark average. Two of the nations premier research institutions Carnegie Mellon and The University of Pittsburgh call our region home. So do 32 other colleges and universities, iti which h produce nearly 28,000 graduates annually. Allegheny Conference on Community Development Pittsburgh is also home to cutting edge developments in the health care field courtesy of world class healthcare provider UPMC. /M ti /N R l ses/2009/pages/hand transplant july09.aspx ses/2009/pages/2009 us news honor roll.aspx 7

8 PIT ss Commitment to Develop Non Aviation PIT Revenue Sources 10. Exploring for natural resources 9. Industry and the Community training 8. Go Hollywood 7. Catch Up on Tenant Facility Maintenance Responsibilities 6. Ground Handle Airplanes 9 5. Boarding Bridge Rehabilitation 4. Advertising on the Highway 3. Awareness Advertising 2. Develop Real Estate 1. Throw a Party G ACAA s airport airline relationship for financial management operates under a residual cost approach. Over this past decade ACAA has been able to refund yearly to its signatory carriers. 8

9 Building partnerships to work with your airlines 9

10 Partnering with Carriers & the Learning Curve 1999 Dec: AirTran began service to 4 markets from PIT: LGA, MDW, MCO and ATL adding PHL in 2000 The community promised support in order to gain a LCC but didn t follow through Prices came down and were matched by US Airways The Frequent Flyer points proved US loyalty could not be broken and the community didn t support them By 2003 AirTran only served their two hub markets ATL & MCO until Dec: The Regional lair Service Partnership was formed 10

11 Regional lair Service Partnership (RASP) Formed December 2003 Three localpartners; Elected Officials, Allegheny County Executive Business Community, Allegheny Conference on Community Development Allegheny County Airport Authority Dedicated dand shared resources 11

12 Mki Making Your Community a Stakeholder Airports can not go it alone Airports know a lot, but not all Airports need to know their community Business communityneeds needs buy in from the top (CEO) It takes time to understand airline logic Develop genuine, open and trusting lines of communication 12

13 Partnering Post May: Southwest began service from PIT serving, LAS, MCO, MDW and PHL The community responded led by RASP and the airport Pricing began to become more competitive By 2006 WN added PHX and TPA service from PIT In 2007, BWI was added and in 2011 DEN was added Sept 2011 Southwest serves 8 markets with 169 flights per week 2006 June: JetBlue entered the Pittsburgh market with JFK & BOS Prices declined in two of Pittsburgh s largest business markets Sept 2011 Jet Blue continues to fly to BOS and JFK with 5 flights per day 2008 Fall: AirTran started FLL, TPA and RSW adding MKE in Oct 2009 Sept 2011 Air Tran serves 4 markets with 56 flights per week (ATL, FLL, MCO, & RSW) 13

14 Incentives Airport based Passenger and cargo FAA restrictions Community based Economic sense Business benefits 14

15 Regional Air Service Partnership 2010 Survey Through our partnership we provide accurate timely market information needed by our carriers in making market decisions Regional Air Service Partnership Survey Status of Top 30 US Business Destinations (Based on Dec 2010 PIT schedule) RANK Destination City Average Departures per day RANK Destination City Average Departures per day 1 New York Minneapolis 5 2 Philadelphia Las Vegas 2 3 Chicago Richmond* NO non stop service 4 Boston 7 19 Orlando 5 5 Washington DC St Louis 2 6 Atlanta Phoenix 4 7 Hartford 3 22 San Diego NO non stop service 8 Houston 4 23 Denver 3 9 Charlotte 9 24 Louisville NO non stop service 10 Dallas 3 25 Indianapolis NO non stop service 11 Los Angeles 1 26 Tampa 3 12 Providence NO non stop service 27 Milwalkee* 5 13 Detroit 5 28 Ft Lauderdale* 1 14 Raleigh 2 29 Cincinnati* 3 15 San Francisco 4 30 Baltimore* 3 The top 30 US business destinations account for 77% of all SWPA business air travel (International and domestic combined) 15

16 Delta Air Lines Nonstop to Paris Service By 2009, the community rallied to the cause for International ti service The airport explored the potential and worked closely with NW, before bringing in RASP The corporate community reached a separate agreement with Delta in 2009, led by the Allegheny Conference The airport offered standard airport incentives and worked with DL on advertising Foundation funding, for the first time, was applied to Awareness Marketing Receptions, meetings, and introductions with the major business groups were arranged Direct Marketing via newsletters, mailings and web based were sent through The Allegheny Conference, The Pittsburgh Technology Council, and various regional Chambers In year two, marketing continued with niche group receptions and events, to build beyond traffic. Today the Paris flight has entered year 3 and is not being subsidized The airport continues to work with Delta to bring them into regional programs with international applications 16

17 Delta Nonstop Service to Europe In partnership with Air France, Delta provides connections to more than 100 cities in Europe, India, Middle East Paris hub connectivity to European cities includes both air and rail Direct service to Europe from PIT saves businesses time and money One of only 31 US cities with transatlantic service USE IT OR LOSE IT 17

18 United West Coast Service Based on surveys sent out by RASP & the Allegheny Conference the Pittsburgh corporate community identified ifi d specific services needed dto drive the Pittsburgh economic advantage. Los Angeles and San Francisco topped the list so the community again became stakeholders The airport reached out to Foundations as well as the community. The Endowments saw this service as falling under their sustainable economy qualification for grants. They labeled their assistance as "connecting the dots" to help our region build a strong and sustainable economy. PIT partnered with United and created posters for use at the airport, and travel agencies, arranged speaking events and used various forms of marketing to promote the service. RASP hosted UA receptions and business gatherings to keep them in touch with the business leaders needing their services. 18

19 United dai Airlines Pittsburgh International Airport Daily service Launched to LAX and SFO August

20 Advertising Media 2011 Radio: talk show interviews Print: meetings with editorial boards Television: appearances on local business/news shows New Markets: Cleveland Interviews: with consumer reporters Social Media: Face Book, Twitter Web Based: Flypittsburgh.com Newsletter: 40,000 subscribers 20

21 Airport + community partnering = successful results 21

22 Success To Date Healthy mix of legacy and low cost carriers True community and corporate support Low cost carrier expansion Delta to Paris United to West Coast Cargo niche 22

23 2011 Air Service Update Delta 7 days a week service to Paris Delta new service to Boston Southwest new service to Denver JetBlue additional service to Boston American additional service to Miami and Dallas US Airways additional service to Phoenix Air Canada additional service to Toronto 23

24 Average Round Trip Airfares Remain Below the National Average $ $ $ $ U.S Dom Avg Fare Pittsburgh, PA $ $ $ Source: Research and Innovative Technology Administration (RITA) *2010 includes 1 st, 2 nd, and 3 rd Quarter

25 15.00% Year over Year Flight Changes at PIT Remain Above the National Average January 2010 June % 5.00% 0.00% -5.00% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun PIT YOY % Difference (Flights) PIT YOY % Difference (Seats) US U.S. YOY%Diff Difference (Flights) U.S. YOY % Difference (Seats) % % Source: U.S. DOT 12/30/10 Note: 2011 departures are projected. USA 3000 and Direct Air have not posted complete flight schedules yet. 25

26 The Pittsburgh Air Travel Market O&D traffic has fallen similar to nationwide trends PIT Traffic is fragmented with no single dominant carrier Pittsburgh O&D Traffic by Year (excludes flow traffic) 2010 Passenger Share by Airline (est) Source: Allegheny County Airport Authority, Traffic Reports YE2010 *Southwest Airlines includes AirTran Airways 26

27 Pittsburgh International Airport Route Map Paris-CDG Minneapolis Toronto Boston San Francisco Las Vegas Denver Milwaukee Chicago-MDW, ORD St. Louis Detroit Cleveland Cincinnati Hartford Pittsburgh New York-EWR, JFK, LGA Philadelphia Baltimore Washington-DCA, IAD Raleigh Los Angeles Phoenix Memphis Charlotte Atlanta Dallas-DFW Destinations Airlines Daily Departures 159 Source: APGData DOT Market Report Sept Source: OAG Schedule, March 18, 2010 Houston Orlando Tampa Ft. Myers Ft. Lauderdale Miami 27

28 Why It Works Airports are Community assets Authority willing to make an investment Community willing to make an investment Open and trusting lines of communications Cultural asset support Pre planning network allows rapid response When opportunity knocks it is not an exercise The communityand corporations buy airline seats Airlines are corporations 28

29 Thank You Bradley D. Penrod, A.A.E., CEO/Executive Director Allegheny County Airport Authority 29