The most effective airport marketeers see the airlines and tour operators as their primary customers. They don't concern themselves too much with passengers, leaving these to their operations and commercial departments and, of course, to the airlines. Their rule is, keep the airlines happy and everything else follows.
Certain airports have always been highly proactive in selling to airlines, and they have reaped a rich harvest of new routes. But as competitive pressures have increased for both airports and airlines, and as more airports have begun to market themselves aggressively, it is becoming necessary to develop more sophisticated techniques to maintain a competitive edge.
A number of pressures are forcing airports to compete with each other. The first is deregulation. Freedom to fly routes means freedom to select airports. For example, following US deregulation Cincinnati, Dayton, Cleveland, Pittsburgh and Detroit were all developed as hubs by different airlines seeking to serve a fairly similar geographical area. In Europe, liberalisation is likewise producing a new generation of secondary hubs, such as Munich. In each case, the key is to persuade an airline (or group of airlines) to adopt a hubbing strategy. If this can be done, the passenger flows will often follow.
It could be argued that consolidation leads to less competition, with airports becoming polarised between a few hubs and a large number of spokes. However, even if this were true there is still enormous scope for airports to improve their feeder flights both into hubs already served, focusing on timings, frequencies, aircraft type and size, and to new hubs. For example, not only should a secondary European airport have four or five flights a day to each of the major European hubs and, perhaps, double-daily to the smaller ones, but it could also eventually hope to have long haul 'feeder' flights directly to world airports such as Chicago, Atlanta, Dubai and Singapore.
In many parts of the world, airport congestion will prevent consolidation from concentrating airlines at just a few airports. Many of the major hubs are now full and growth gives enormous opportunity for the less congested airports. This expansion in demand also produces a dramatic increase in charter flying and the so-called 'point-to-point' scheduled services which cater especially for leisure and VFR traffic.
Such passengers are concerned more with fares than with schedules and are far more flexible in terms of which airports they are prepared to use. Realising this, some previously neglected airports have offered extremely generous packages to the low-cost carriers. The result has been the creation of some spectacular traffic flows, with the airports making their money mainly from spin-off commercial revenues, especially duty free sales.
Individual circumstances within countries or continents can be critical in determining whether rivalry breaks out between the incumbent airports. The privatisation of virtually all of the UK's major airports has resulted in intense competition, as has Germany's decentralised demographics.
The Far East, with so many new 'mega' airports due to come on stream in the next few years, is also becoming a centre of intense competition. Macau has been particularly aggressive in promoting itself as a gateway to China, and the new Kuala Lumpur Airport's ambitions are clearly aimed at taking some of Singapore's market.
Surprisingly, some airports in North America are less developed in terms of marketing, reflecting the fact that they are sometimes little more than property companies. Still, many are very proactive and some have acted as the catalysts for sophisticated economic development programmes. For instance, at Nashville the city and other organisations worked closely with American Airlines to save and develop the hub.
Sophistication is now becoming the name of the game for airports seeking to stay ahead of the competition. For many airports, their first encounter with the economics of a scheduled route can be a great shock, with zeros appearing to stretch to infinity. Some prudently decide to leave the operation of aircraft to airlines even if it means less growth for themselves. Others, however, are prepared to bite the bullet and offer financial packages that can make a difference to an airline's calculations about a new route. The problem is that if such an airport gets it wrong, then it can make an even bigger difference to its own economics. No wonder airports are strengthening their marketing functions.
The sophisticated airport does not simply wish to be seen as a route support charity, unthinkingly providing substantial financial support. Rather, it wishes to analyse carefully the support it is being asked for, influence the details of its application, and monitor its effects. Some of the bolder airports are even on the offensive, planning entire airline strategies with, of course, themselves at the centre.
Manchester Airport, for example, pioneered one of the first airport-led hub development programmes in the late 1980s. This initially produced an interline hub, Manchester Connects, in which a range of carriers connected within a wave structure devised by the airport. As the hub developed, Lufthansa and its partners emerged as the dominant force and the hub gradually moved to an almost on-line collection of partners housed in their own dedicated fast transfer facility. Lufthansa's activities have now stimulated a response from Manchester's main scheduled carrier, British Airways, placing the airport in a win/win situation.
Another example of an airport being proactive is a recent deal between Jersey European and Air Inter Europe, in which the UK regional began operating a daily Marseille-London/Stansted service for the Air France Group. This commercial arrangement was, in the first instance, brokered by the airport which had identified two carriers in different countries, with similar strategic needs, and yet which would almost certainly not have recognised this common interest without the initial help of the airport. For airport marketing to work, airlines need to be receptive to the messages and to understand why airports are marketing themselves and why the airlines can benefit. Of course, some carriers continue to plan their networks in splendid isolation, sometimes too proud even to ask for 'support' from airports. 'We decide our own network,' they say, 'We certainly won't discuss our plans with an airport.' Fortunately these airlines are becoming few and far between. As regulation continues to crumble and competition mounts, carriers are being driven to seek assistance wherever they can and airports are an obvious source. They usually have excellent local knowledge and, more important, are often willing to contribute financially to a route's critical start-up phase.
So how do airports sell to airlines? The most powerful way is to discuss concepts of market access, especially the general ability of an airport to tap a new market for the airline. This is something the airlines are, of course, very interested in but they don't always have the time to study it properly. A global airline has hundreds of markets to study but can look at only a fraction in any detail. Airports that can concisely and convincingly provide an analysis of the market that they can provide access to, will rapidly achieve a high profile with overworked airline planners.
When talking to the carriers, the most effective airports keep the focus fixed firmly on market access. They will, of course, outline the physical facilities, but they know that many airlines tend to be rather sceptical of airports, feeling that they live in a less demanding commercial environment. Boasting about expensive new facilities may be counter-productive, causing the airline to see 'cost' rather than 'opportunity'. Furthermore, airline executives have passed through many airports in their time and may not be excited by a new terminal. A building is unlikely to be the sole reason to start a new route.
The usual way of presenting to airlines is the production of a detailed 'new route study' and airports are getting more and more sophisticated at these, especially in countries where accurate origin and destination data is available. Some airports have had great success with such studies, but times are changing and new approaches can be even more productive.
In some ways, the voluminous route study is more suited to less competitive, regulated spheres. In such cases it can serve as a necessary 'courtesy' by an airport, to which an airline responds with a new route that it was probably planning to do anyway. After all, regulation so badly distorts reality, making patently uneconomic services profitable, that an airline need not worry too much about the strength of the decision-making process. All is secondary to the availability of a licence.
Today, airlines cannot afford to make wrong route choices and if they are interested in a particular option they will undertake their own exhaustive studies anyway. They may well appreciate and draw on data provided by the airport, but they will rarely rely on it entirely. Airline route planners are awash with new route studies. The novelty has gone and they now demand opportunity and reassurance.
The 'feeling' that they have about an airport is at least as important to airline executives as the numbers. They want to see an airport marketeer who is confident, gets straight to the point, and makes their stressed lives easier. Above all, as in any 'normal' industry, they prefer to do business with people they like. Routes can no longer be agreed at the nod of a head and the shake of a hand, but good personal relationships help. Positioning, branding, image and hospitality are now critical to preparing the ground and creating the right atmosphere for a technical presentation.
Personal trust matters for an important reason. When an airport claims that a certain new route is a massive opportunity just waiting to happen, in reality it has little to lose - just some marginal income and perhaps some loss of pride. Yet the airline stands to lose millions of dollars, and the planners their careers. In this situation the airline planner needs to know that if the route fails the airport will share responsibility and assist with salvaging the situation.
This, of course, is often why airlines are so keen to see a financial assurance from the airport. Just as a bank manager may demand that some personal security be set against a business deal, this sends a clear signal of commitment. At the very least, the route planner who made the decision and then meets with disaster is entitled to expect that the airport will speak to the bosses in the same positive tones, and at the same senior level, as it did when it was trying to clinch the route. If the planner doesn't have this confidence and trust, he may not recommend the route in the first place, merely adding the airport's study to his extensive collection. After all, there are a lot of airports.
An airline's perception of an airport can be subtle; airlines are complex and diverse organisations. Sometimes parts of a carrier may support a new service while others may be against it. This can result in a service starting and then rapidly 'failing' as the sales figures mysteriously do not match the forecasts. This recently happened with a major European secondary airport that, after intensive studies and lobbying, pressurised an airline into starting a high-frequency transatlantic service. It didn't last long and, while there were several reasons for this, there is no doubt that some in the airline felt bitter over the airport's dealings with competitor carriers and did little to ensure the route's success.
This example should make airports wary of actively courting too many competing carriers; old friendships are quickly destroyed in this way and can take up to a decade to re-establish. Despite the fast changing nature of the industry, airlines seem to have long memories with respect to airports. Those which are 'friends' seem to do better in terms of routes and frequencies.
Airports are perhaps one of the last major business sectors to discover marketing. Competition, congestion and privatisation are the main driving forces and many airports are rising to the challenge and becoming more sophisticated, creative and confident. Airports can make a difference and influence their own destiny.
Source: Airline Business
