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Establishing and Validating ASD Goals 99 These goals may not be clearly marked in ASD strategic plans for the year but they are vital to A well-targeted developing supplemental assistance across other airport departments (e.g., economic development, financial, operations). A well-maintained intra-airport partnership on tourism development, marketing plan can fiscal planning, and long-term investment will guarantee that potential air carriers recognize the alleviate concerns likely viability of starting new or expanded service in the community's marketplace. about bringing a new "brand" into What is the process for validating and refining the area that new ASD goals? entrant carriers Having thought through the range of possible goals, the ASD team must assess them critically would have. to ensure that they are realistic for its community and would be seen as realistic by the targeted airlines. Otherwise, the ASD team wastes time and money trying to achieve something that the airlines will not consider. Proposals for new services should be reasonably within the capabilities of a community to support in a manner that will be profitable for the targeted airline. Suggesting services that the com- munity cannot support or that cannot be flown profitably will inevitably lead to disappointment-- flights that will not survive long (if implemented at all) or provide few benefits to the community and the airline. In addition, such short-lived "successes" could hinder the community when it seeks additional air service in the future because the airlines will probably ask, "Why will this route work now when it did not work before?" If your goals are unrealistic, it might be difficult to come up with an answer that the airlines will accept. Ensuring that Goals for New Service Align with Airlines' Capabilities Once the airport and community have determined what their top market targets are, they need to understand what types of new air service--nonstop or connecting--will best meet the needs of local travelers. In selecting airlines to target for that service, the ASD team needs to under- stand the types of services that the targeted airline(s) provide and make sure that they match the airport's needs. The ASD team should use other communities as a guide or benchmark; for example, what type of service does the airline provide in similar communities? A community should avoid suggesting that an airline provide a type of service that it does not provide to sim- ilar communities elsewhere. It is almost always more difficult to convince an airline to change its practices for the ASD team's airport than it is to convince the airline that the same processes that work elsewhere will also work at the ASD team's airport. For example, US Airways announced in early 2008 that its Express operation would begin service to three Gulf Coast communities (Ft. Walton Beach, Florida; Gulfport-Biloxi, Mississippi; and Panama City, Florida) from its Charlotte hub with the same type of aircraft and with hub arrival and departure time being very similar. Furthermore, this new service was similar to existing US Airways Express flights to other cities in the region in terms of aircraft type and hub arrival and departure times. Choosing Between Hub-and-Spoke and Point-to-Point Service Deciding between targeting network (i.e., connecting) service and point-to-point service usually equates to a choice between legacy carrier service to a hub and LCC service to a major business center or a resort destination. Of course, that oversimplifies reality: Legacy carriers offer some point-to- point service (e.g., American from Austin to San Jose and Delta from Boston to New Orleans) while a few LCCs offer connecting service (e.g., AirTran at Atlanta and Frontier at Denver). Nevertheless, the choice of whether to target connecting or point-to-point service will be driven by the community's air service needs. In some cases, the community may elect to pursue

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100 Passenger Air Service Development Techniques both options concurrently. If the most important service deficiency is flights to a major hub air- port, the solution will generally call for legacy carrier service, with the added benefit of a vast array of connecting flights at the hub. In contrast, if the primary service deficiency is to a leisure market, the most likely candidate to offer new service in that market may be an LCC or niche carrier, in part because of the legacy carriers' reluctance to offer much point-to-point service in the current operating environment. Considering Competitive Service When reviewing the service needs of a community's potential target market, it is important to know what competitive service is already being offered in the market on both a local and beyond basis. That is, which airline(s) offer service to the targeted destination and which airline(s) offer service to other destinations that could reasonably be flown via the targeted destination. If the community already has nonstop service in the target market, the ASD team must ensure that its market is sufficiently large to profitably support two airlines. This does not necessarily mean that the local market alone needs to be large enough for two airlines, but rather that the total traffic carried in the market will support two airlines. Such a situation is rare in small communities. For instance, Fresno had nonstop service to Denver on United Express. Using a SCASDP grant, Fresno attracted Frontier into the market. United objected strongly to the U.S.DOT that this was an abuse of SCASDP and a waste of fed- eral funds in a market that already had multiple daily nonstop flights. U.S.DOT took no action. Frontier's service lasted about two years, ending in June 2007. Moreover, just because an airline agrees to initiate nonstop service to a desired target city, its success is not guaranteed. Other carriers can offer highly competitive service with through flights, online connections, and interline connections via other hubs or other markets. This situation is especially possible where potential nonstop service in a relatively distant target market will be competing against much higher frequency connecting services over one or more closer hubs. For example, Frontier began twice-daily nonstop service between Baton Rouge and its Denver hub in mid-2007, competing against much more frequent connecting opportunities at the closer hubs of Dallas/Ft. Worth (American), Houston (Continental) and Memphis (Northwest). But seven months later, Frontier abandoned the market, overwhelmed by the multitude of flight times offered throughout the day by the three legacy carriers, along with the draw of their respec- tive frequent flyer programs. Understanding and Quantifying the Strength of the Market Understanding where potential passenger traffic comes from is important. The target airline must be comfortable with the traffic forecast before it will commit its resources to add service in a new market. This traffic forecast includes the breakdown of local versus connecting passengers as well as business versus leisure passengers. There can be numerous sources for the incremen- tal traffic such as market stimulation, shifts in airline market share, and the recapture of traffic that had previously "leaked" to other nearby airports. The target airline will want the rationale for such a traffic forecast to be spelled out clearly. As discussed in Chapter 5, the best and most reliable source of data available to the public comes from the U.S.DOT, which receives the data from filings made by the airlines pursuant to U.S.DOT regulations. Two key data sources are the O&D and T-100 Onboard databases, which communities can use to determine whether most of the new traffic in the target market will be incremental to the target airline, even if not to the community at large. These data are available to the public through commercial vendors as well as through the BTS TranStats website (www.transtats.bts.gov).

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Establishing and Validating ASD Goals 101 Airports and communities also may be able to use other sources of information, such as a local economic development agency or chamber of commerce, to indicate community and business growth as exemplified by new business investment, growth in employees, and population immi- gration. However, this information tends not to offer details of travel in specific markets unless individual businesses share their travel patterns. Matching Aircraft to the Target Market Because aircraft have certain key performance characteristics such as capacity and range, the ASD team should determine what specific size and type of aircraft would meet its needs. That is, the community should understand how much and what type of capacity would be appro- priate for the proposed service. Obviously airports and communities should not propose a new service with an aircraft type that cannot properly and successfully operate in the target market. Suggesting the use of an aircraft that does not fit its market needs will lower the ASD team's credibility with the airlines and lessen the likelihood of new service being started. Of course, before a team meets with a particular airline, it should be sure that the airline (or its regional code-sharing partner) operates that type of aircraft or has the aircraft on order. Seating Capacity, Configuration, and Operating Range To the greatest extent possible, airports and communities should try to match the seating capacity of the aircraft proposed for the target market with the expected frequencies and traffic levels once the new service is implemented. This is usually an iterative process; the ASD team will have to produce several forecasts using different trade-offs of capacity versus frequency versus departure times to determine the optimum capacity and frequency mix at the best departure time(s) to attract the most passengers to the target market. If the ASD team believes there will be a significant amount of traffic likely to use a "premium cabin" (i.e., business class), it might suggest a two-class aircraft to serve the target market (assum- ing the target airline already offers such service). For example, Delta has code-sharing partners that offer two-class service with CRJ-900 aircraft (Figure 7.10). With enough premium traffic, a target market that might otherwise support three daily 50-seat RJs could perhaps be better served by two daily two-class 70-seat E170/CRJ-700 aircraft. The suggested aircraft must also meet an airline's operating criteria. For instance, despite the manufacturer's stated range of 1,200 miles for a CRJ, United will only schedule such aircraft in Figure 7.10. Delta Connection CRJ-900 with business and coach class seating.

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102 Passenger Air Service Development Techniques markets up to about 1,000 miles. Knowing what aircraft will work for a given airline is very important for a community's credibility. Number or Power Levels of Engines Required for Specialized Operations The number or power levels of engines is most relevant for airports surrounded by severe mountainous terrain, such as Aspen or Telluride. The issue involves the ability of the selected aircraft to take off and climb in so-called "hot and high" conditions where the combination of high ambient temperatures and a high airfield elevation reduce normal engine performance and thus might limit the payload-carrying capability of the suggested aircraft. Ensuring Airport Infrastructure Accommodates the Proposed Aircraft The ASD team also needs to ensure that its airport infrastructure and the aircraft it may be considering for new service are compatible. Aspects of the terminal, as well as jetways, tarmac, and runway length, should be considered in the compatibility evaluation. The airlines know the infrastructure requirements necessary to handle any of their fleet types at a given airport; there- fore, suggesting an operation that its airport is not capable of supporting will lower (or elimi- nate) the ASD team's credibility with the target airline. See Chapter 5 for additional information on assessing an airport's facilities. Terminal The target airline, especially if it is new to the community, will likely have a number of require- ments that must be met to support any new service in the market: First, there must be sufficient ticket counter space available to handle the additional passengers that would be attracted to the new service without The Sacramento Bee reported in incurring significant passenger processing delays at the start of their May 2008 that airlines were upset trips. with the plans of Sacramento Second, there must similarly be sufficient baggage claim carousels (or other International Airport (SMF) to facilities) available to handle the new passengers and their baggage without build a $1.27 billion expansion, incurring significant passenger delays at the end of their trips. including a new terminal, hotel, Third, there must be sufficient gates and hold rooms available for the new parking garage, and people-mover passengers to board the new flights in the target market without creating tram. The newspaper reported, undue terminal crowding. "The Sacramento plan doesn't do Fourth, there must be sufficient amenities (e.g., restaurants, shops) avail- anything for Southwest Airlines able to provide for the personal needs of the new passengers without except raise our costs," airline overcrowding the facilities available for current passengers. Of course, executive Ron Ricks complained. amenities are not a priority for all air carriers. Some LCCs are much more "If Sacramento goes forward with concerned about lower costs than passenger amenities. Those airlines this plan, given all the other believe that most of their passengers will readily sacrifice airport amenities economic headwinds the (airline) for lower fares. industry faces, it will lead to a Fifth, there must be sufficient office space available for the target airline reduction in flights and much to handle its required on-site office functions in a private and secure higher airfares." (12) The manner. Sacramento Bee also reported that In validating its goals, the ASD team must ensure that its terminal facili- American Airlines was cutting one ties are capable of accommodating proposed new service. However, that does of its four daily Sacramento-to- not mean that every airport will have to build new facilities to attract new Dallas flights because of what it service to its target market. In fact, new facilities often cost a great deal of called "substantial and unreason- money, which is usually passed on to the airlines in the form of higher land- able" fee increases (13). ing fees and facility rents--and thus can actually be a deterrent to attracting new service.