christopher barks - landings latin america - panel 2: regional aviation overview: what works and...

1st International Brazil Air Show (IBAS) – Landings Latin America 1Federal AviationAdministrationMarch 31, 2017, Rio de Janeiro, Brazil

Presented to: 1st International Brazil Air Show (IBAS) – Landings Latin America

By: Christopher Barks, Director, Western Hemisphere Office, Federal Aviation Administration, U.S. Department of Transportation

Date: March 31, 2017Rio de Janeiro, Brazil

Federal AviationAdministration

Air Service Development (ASD) Techniques to

Increase Regional Aviation Activity


Contents

Air Service Development (ASD) Overview• Importance of air service development and what it encompasses• Air service development in context• Major competitive challenges to ASD at small communities

Addressing Competitive Challenges Through an Active ASD Program• Assessing Existing Service and Stakeholders• Identifying Available Financial and Human Resources• Establishing and Validating ASD Goals• Selecting a Strategy and Techniques for Air Service Development• Making a Compelling Case for Air Service• Evaluating and Refining the Program

ACRP Report 18: http://www.trb.org/Publications/Blurbs/Passenger_Air_Service_Development_Techniques_162396.aspx


Air Service Development (ASD) Overview

ASD involves all activities directly related to enhancing commercial passenger service at an airport, including understanding:• The local community and what drives its economy,• The air service and fares that airlines offer,• The cost and revenue issues that influence carriers’ decisions on

which markets to serve,• How an airport can extend financial and non-financial incentives to

carriers,• What carriers value most and what they want to know about a

community,• How to make and present a sound business case to airlines, and• How to evaluate the ASD efforts and revise them as needed.


The Importance of ASD and What it Encompasses

• Air service has value as an economic driver• Airline decisions on markets is a matter of revenues vs costs• Airports and communities can provide helpful information to carriers:

– Information that the carriers might not otherwise have had, particularly on changes in the local area’s economy.

– Organize efforts to influence the local demand for travel.– Support development of financial incentives as a way to share

the risk of starting new service.– Actively contribute to incentive programs and provide marketing

assistance to airlines.• Key community stakeholders:

– Major employers, the local chamber of commerce, the local economic development agency, and local hotel associations and resorts.


ASD in Context

• Most small communities in the U.S. connect to the national aviation system as “spoke cities”

• Relatively few low-cost carriers (LCCs) serve small communities in the U.S.

• The challenge for airlines is to match the relatively limited passenger demand in those communities (along with its corresponding limited revenue) with the right amount of capacity, while controlling operating costs.


Major Competitive Challenges to ASD at Small Communities

• Most small airports suffer from “passenger leakage.”

• Business passengers tend to choose airports with more choices.

• Leisure passengers prefer airports offering lower fares and non-stop service to their destination.

• The major competitive challenges facing small communities include:– Proximity to legacy network hub.– Proximity to airport with low-cost carrier service.– Small populations that are geographically isolated.– Fragmentation of the local passenger traffic base among

competing nearby airports.– Predominantly inbound markets that rely on tourism.


Addressing Competitive Challenges Through an Active ASD Program


Assessing Existing Service and Stakeholders

Figure: Major air service problems identified by small airports


Identifying Available Financial and Human Resources• ASD programs needs two types of resources: financial and human.• Two general areas of financing to meet an airport’s ASD funding needs:

– revenues generated by the airport itself and– revenues derived from other sources, such as private corporations,

tourism organizations, and government at various levels.Table: Median amount of resources applied to ASD, by hub size and category of assistance.


Establishing and Validating ASD Goals

Figure: Most frequently mentioned ASD goals


Selecting a Strategy and Techniques for ASD

Figure: ASD techniques used by small airports.


Making a Compelling Case for Air Service

Figure: Information that airports present to carriers.


Making a Compelling Case for Air Service

Figure: Kinds of information carriers are interested in.


Evaluating and Refining the Program

• An assessment provides a systematic and unbiased review of the methods and procedures used, as well as the results obtained.

• Three basic components needed to determine whether an ASD technique worked effectively:– Knowing the objectives exactly,– Measuring outcomes, and– Attributing causation.


Obrigado!Christopher Barks

DirectorFAA Western Hemisphere Office

Embassy of the United States Panama City, Panama

T: +507-317-5370M: +507-6482-0033

M(US): +1-202-258-5914E: [email protected]

christopher barks - landings latin america - panel 2: regional aviation overview: what works and...

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