|
Next week senior airline executives from around the world will gather in Las Vegas for a networking conference to help chart their future growth plans. |
The three-day World Routes Summit will attract more than 3,000 delegates drawn from airlines, airports and tourism boards with one prime objective: to persuade airlines to open up new routes.
Whether it is the giants of the skies – American Airlines, British Airways, Delta, Emirates, KLM, Qatar Airways, Lufthansa to name a few – or relative smaller carriers, including Air Astana, Airblue, Tibet Airlines, Macau Airlines, Jetstar Japan, AirAsia and Air Niugini, the stage will be set for a meeting of the minds.
Airport authorities representing the likes of London, Oslo, Shanghai, Auckland and Houston or cities not normally on the radar such as Abidjan, Dubrovnik, El Paso, Hamilton, Krakow and Santander, will do a hard sales and marketing pitch to lure carriers.
Taking centre stage at the Las Vegas Convention Centre will arguably be the airline network planners – individuals who spend day in, day out, creating business plans on route growth strategy. Every airline has such teams of people who are among the most empowered company employees as guardians of sensitive information about future plans that the competition would love to get their hands on.
These individuals are tasked with evaluating prospective new routes; to assess their viability; to establish whether there is market potential; to analyse passenger trends; to forecast future aircraft needs; to stipulate which aircraft should be deployed on which routes; and ultimately to convince their bosses on whether it is commercially viable to pursue such opportunities.
Indeed a tall order, but the weight of responsibility rests on their shoulders as much as on the commercial teams who are burdened with selling the seats.
In Vegas, it will be show time!
Like speed dating – though longer than just a few minutes – airports will have 15 minutes to convince the network planners to fly planes to their cities before delegates move onto the next scheduled meeting.
Tourism boards and, in some cases, local business associations, play an integral role in these meetings. The lure of business to be done in a city and plethora of tourism attractions will be used by the airports to push their case.
It’s not uncommon for airports to discuss incentives such as offering airlines marketing dollars to help promote a new route, or reduce airport landing fees for a designated period to entice the airline.
Contracts,however, are unlikely to be signed as the annual forum supported by similar, but smaller regional events around the world, provides an opportune entry into markets under one roof and for delegates to forge invaluable relationships.
The World Routes Summit helps get the ball rolling every year.
But it’s back at base where the work really starts for airlines as they shape their plans.
As an aviation professional who has written about the industry extensively over the years, I have often been asked why airlines operate certain routes, why they don’t; and why can’t they offer passengers convenient timings avoiding, in particular, those dreaded “past midnight” flights.
At any given time, network planning departments can be assessing anywhere up 50 destinations to add to an airline’s portfolio during a strategic timeframe of three to five years.
Invariably the numbers end up being whittled down to only a handful of destinations each year after detailed route evaluation. In the case of each of the relatively young, aggressive airlines based in the Gulf, the figure averages 10 new route additions a year – far more than what more established carriers would launch.
Operating a route has to make business sense. Flying a plane with “fresh air” and few passengers from A to B is not an option.
Whether it is flying the corporate traveller in numbers as these are the passengers who can make or break an airline with their frequent travel, high-yield payments for seats, or the leisure traveller going on holiday, a new route has to offer the ultimate goal of being profitable.
Before the real work starts to plan a new route, governments take an active role in the process.
Government transport departments of each country go to the negotiating table with global counterparts to create or enhance air service agreements with each other. The aim is to establish a framework allowing airlines from their countries to fly to, and from,other nations.
For almost 70 years, the international air travel industry has been governed by treaties set by the so-called 1944 Chicago Convention which determined that no scheduled air services may be operated between, or beyond, nations without permission. Hence, so-called traffic rights have to be negotiated by governments.
These agreements not only control the number of flights permissible, but can also govern the number of passengers allowed to be flown on routes, hence creating capacity restrictions.
It is the level of economic benefit air services provide that governments take into consideration during the negotiating process. There has to be national interest.
Sounds archaic, but this system still exists with thousands of bilateral air service agreements in place – simply to protect countries from foreign competition that could affect the viability of home-grown airlines.
When passengers complain there are not enough flights to a particular destination, this highlights the issue of demand outstripping supply.
Either the government treaties do not allow for more capacity or the airline in question does not have enough aircraft to increase frequency.
So next time you read articles of specific air service agreements being signed between countries, this demonstrates there is interest for new air services so expect airline network planners to be hard at work preparing fresh business plans.
♦ Updesh Kapur is a communications professional, writer and travel expert.
