THE FUNDAMENTALS OF ROUTE DEVELOPMENT MARKETING TO AIRLINES AND THE PERFECT PRESENTATION MODULE 10

Transcription

1 THE FUNDAMENTALS OF ROUTE DEVELOPMENT MARKETING TO AIRLINES AND THE PERFECT PRESENTATION

2 S AIRLINE FEEDBACK

3 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 own, 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. The key consideration is airport needs to make a case on traffic segmentation to ensure viable service vis a vis airline competitiveness and positioning. Information about leakage and transfer versus point to point very useful.

4 AIRLINE FEEDBACKS 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. Information about leakage and transfer versus point to point very useful.

5 AIRLINE FEEDBACKS 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 Information about leakage and transfer versus point to point very useful. costs for airlines and customers.

6 AIRLINE FEEDBACKS Airline Survey: If Route development were perfect what would it look like? It would be fully in sync with what airlines are seeking to do. A positive outcome (meaning profits) for every new route, with honest and open collaboration along the way. 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. 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. Understand our priorities - ideally get a pretty good idea from publicly available sources/consultants. Reach out to us in advance for quick pointers on 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. Identify opportunities to reduce airport Information about leakage and transfer versus point to point very useful. costs for airlines and customers.

7 S Perfect Presentations Are about

8 PERFECT PRESENTATIONS Numbers

9 TRAFFIC FORECAST Example illustrates the depth of 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.

10 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?

11 MARKET SIZE COMPARATORS What are our largest unserved markets What are the largest unserved markets for our target airline

12 AVERAGE FARE COMPARATORS How do the average fares in our market stack up against others in the region, and others in the airlines network?

13 INCENTIVES AND TRAFFIC DELIVERY Address how route will be supported to ensure traffic and if necessary to move opportunity 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

14 PERFECT PRESENTATIONS Listening

15 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?

16 PERFECT PRESENTATIONS Conciseness

17 PERFECT PRESENTATIONS Being remembered

18 APPENDIX Support Information To answer questions, not to be presented

19 APPENDIX Catchment Size 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

20 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

21 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.

22 APPENDIX Point of Origin and Purpose of Trip Info Point of Origin Purpose of Trip Our Market XX% Airline s Home Market XX% Business XX % Tourism XX % VFR XX % 8% 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 operator involvement required.

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