Hire Professional Air Service Consultants
Get a Community Competitive Edge

Hire professional air service consultants. Your air service program can flourish when you hire professional air service consultants with development and air support experience as well as strategic airline relationships. This will gain a competitive edge for the community in sustaining or acquiring air service. It can also be the bridge between the community goals, the airlines and desired air service outcomes. Community air service planning without an understanding of the airlines and the airline industry will be a wasted effort. To acquire flights from the airlines, the community has to convince the airlines they will deliver what the airline needs! Make your pitch to the airlines about the airlines!

When you hire professional air service consultants you’ve upped your level of competitiveness in the airline service arena. When many communities are losing air service and some losing all their air service investing in your air service support and development is critical to competing effectively. When you hire professional air service consultants you raise your level of understanding the airline needs making it easier for the community to meet these needs and help advance community airline service efforts. 

Community Flights has developed over 35 best practices and guiding principles for communities looking to improve their air service. The above is just a small sample of a complete guidebook of best practice.

If you’d like to receive the complete guidebook for FREE: Community Flights Air Service Development Best Practices and Guiding Principles, email: scott@communityflights.com and request we send the full guide.

Scott Stewart is the principle of Community Flights; an air service support, development and management company. Community Flights works with communities, organizations or businesses on leveraging the great economic asset that air service is for economic gain. Scott formed Community Flights in January 2013 to mobilize community support efforts and help clients, bridge the “air service understanding gap” with the airlines creating an airline and community win-win air service support and performance environment. You can find more info about Community Flights at www.communityflights.com. Contact Scott Stewart directly at scott@communityflights.com . 

Air Service Data Analysis – Can be Road-Map to Success
“If you can’t measure it you can’t manage it.”

Air Service Data Analysis is a road-map to success. Meaningful analysis of data can drive effective management and support of your communities air service. With that in mind, we offer extensive air service data analysis and air service enhancement services. We track airfares, advance bookings and try to get these reports from the airlines to analyze. We also use other data sources to help drive effective air service support actions; both in your community and cooperatively with the airlines when possible.

In addition to traditional air service data analysis with forecasting of passenger demand and fares, we also conduct forecasting on projected community revenue guarantee payouts, if your community invests in these airline attraction incentives.

Community Flights air service data analysis also includes forecasts of key metrics like return on investment, cost per seat and cost per passenger (For revenue guarantees).

Our specialties include:

Airfare Tracking
>When fares match the varying levels your local and visiting passengers are willing to pay, everyone wins – Air Carriers make a strong profit, your flights are full and your local tax coffers brimming from the increase in economic activity in your community.

>Community Flights as part of our air service data analysis examines weekly your airport’s key route airfares against your community airports historical average airfares, historical low or starting airfares (Once this history is created) as well as comparing them to those of your selected competitors.

>Weekly, our air service data analysis includes providing you with your publicly accessible fares and compare them to your competitors’ average fares.

>If your flight bookings are soft, we look at your fares and then we ask the airlines adjust your fares. We typically will also look to coordinate local advertising support of your flights  as an encouragement to the airlines to start an air fare sale or adjustment.

Air Deal Tracking!
>Community Flights air service data analysis includes constantly monitoring various fare sources to find out when special air deals come up. These can sometimes be short-term deals that fall within normal weekly air price tracking in key markets as well as include markets that are not among your top markets.

>Community Flights build key local and visitor air deal notification lists to tell when air deals are significant and “Actionable” for your community airport passenger segments.

Airfare Club!
>Community Flights works with local businesses, people and organizations to build a list of air travelers who want notification of when air deals and/or air prices are good or when other airline special offers are available. We will also leverage this “List” with the airlines to encourage special airline pricing or initiatives for this group.

Leakage Studies and Reports
>In many cases, people who live in your community are not always using your airport. When you lose air service customers of your local airport to an alternative airport, then
you’re “Leaking” passengers and not maximizing your airport economic activity driving capabilities.

>Community Flights will study closely where you are losing passengers to that you should be capturing (As close as zip-code levels), what destinations they are flying to as well as what alternate airports they are using. We’ll conduct a study comparing fares, access convenience and other factors. From this study we can craft a local passenger “Retention” plan to help pull back some of these air passengers using alternate airports.

Note: Typically, due to economic principles and the varying needs of the many passenger segments, not all passengers “Leaking” can be recaptured but a well crafted passenger “Retention” plan can help optimize a communities capture of air passengers and improve your flight revenue performance.

Visitor Capture Optimization – Recapturing “Lost” Visiting Air Passengers
>While local citizens using alternate airports instead of your local airport is generally understood as “Leakage,” there is no official term for visiting passengers who use these alternate airports. When these visitors ultimately spend time in your community they have a “Leakage” type effect on your airport.

Community Flights doesn’t forget about these lost air passengers and offers a Visitor Capture  Optimization service. This service can involve setting up and conducting services coordinating local tourism and economic development organizations to quantify the loss of visitors to alternate airports. It will also look to create communication programs designed to recapture visitors to your local airport by helping to improve visitor awareness of the value points of your airport when compared with alternate airports.

scott@communityflights.com        970-759-3559
Click here to see how we use some of the air service data analysis.

“It’s not just a get the air service and it will be successful proposition…Effective air service start-up support strategies need to address both the new air service AND also support incumbent air service to achieve a net positive growth in community air service and not cause a loss of incumbent air service.”
Community Flights

Communities that plan wisely and holistically will create successful new air service strategies. Community Flights works with communities and airlines from the beginning, on route analysis, air service promotion, aircraft type, air schedules and frequencies to help determine and create the best launch conditions for new air service.

If a new carrier agrees to serve your community we’ll help you negotiate the best airline conditions for the service and look to build as much airline and community coordination to help insure success.

Note: A Laser Focused and Highly Coordinated Community Effort is often the difference between new flight service success or failure. Community Flights specializes in coordinating communities to drive start-up air service success and continuing incumbent air service success.

Our Air Service start-up services include:

• Marketing Support Coordination (Airline/Community) and Strategy
• Incentive Negotiations
• Introductory and Other Pricing, Revenue Management and Scheduling Set-Up
• Local PR and Flight Awareness Promotionscott@communityflights.com           970-759-3559

Airline Passenger Targets don’t match Tourism Guest Targets

Airline Passenger Targets don’t match Tourism Guest Targets. Chuck Schubert vice-president of network planning at American Airlines alluded to a key 20%/70% airline rule about passengers and airline flight revenues in the recent: Airlines Reveal Ticket Pricing Strategies news article in the Silicon Valley Mercury News. When extrapolated out, this means 20% of the (Higher Fare Paying) passengers represent 70% of the flight revenues and that 80% of (Lower Fare Paying) airline passengers represent only 30% of flight revenues. The profit focused airline industry, understandably, prioritizes their focus on the higher fare and revenue producing 20% of their customers (70% of flight revenues), over the lower fare paying 80% of their customers. Many communities are tourism driven and wish to focus on maximizing passengers and not revenue as they see this would be the best way to fill-up their hotel rooms. This dichotomy clearly shows airline passenger targets don’t match tourism guest targets.

Leisure destinations and/or leisure organizations, that don’t fully understand the implications of this airline passenger targets approach will be unlikely to realize their air passenger guest capture potential.

I can’t emphasize enough that the 80% (Lower airfare paying air guest), which is the primary target air guest of many tourism and leisure business organizations, is very much a secondary priority airline passenger target.. The priority airline passenger targets represent only 20% of passengers. Leisure tourism and travel is a discretionary activity where potential air tourism guests are more price-point conscious and have a lower airfare price threshold (Then the 20% the airline passenger targets) at which point they will decide against making a flying trip due to high flight cost. With airlines primarily focusing on maximizing revenue and the capture of the “20%” passenger, airline passenger capture goals will often run counter to the tourism passenger capture efforts.

Airline Goals Don’t Match Tourism Goals

Fact 1: Airlines will set pricing to maximize revenue which often won’t maximize flight occupancy – Less than full occupancy flights limit tourism air guest capture possibilities

“While full planes are generally a good thing, it’s not necessarily a given that full planes are profitable planes,” American’s Schubert said. Like any business, airlines focus on being profitable and they will use strategies to meet that profit. This includes selling seats on the plane at variable prices that may cause the flight to go out less than 100% full if that combination of seat price sales produces the highest revenue; and leads to higher profits. “It’s something we hear all the time: ‘I was on a full flight so you must be making a lot of money.” said Bob Cortelyou, Delta’s senior vice president of network planning. “A lot of times it depends on what type of fares the passenger wants to pay.” Airline passenger targets don’t always match tourism air guest targets.

Example: An aircraft has 50 seats costing $20,000 round-trip to fly on a route  Full-Flights do NOT always equal profitable flights and the airline passenger targets don’t match the tourism guest target

For a flight costing $20,000 per round-trip, the airline would need to receive an average of $400 per passenger in revenue at a 100% full flight to breakeven. If however, an airline can produce $25,000 in flight revenue through variable air price level sales that sell only 40 of those 50 seats (At let’s say prices that range from $300 to $1200), like any good business, they are going to execute on this sales model. This model offers a $5000 profit per flight. Why sell a full flight (50 seats) at breakeven when you can sell 40 seats on the same plane at a $5000 profit?

The key fact to remember is that historical market behaviors drive the airlines pricing strategies to maximize profit. These pricing strategies have airline passenger targets that are not as beneficial to tourism entities. When and if, a 100% full flight at the same fare situation will produce the highest profit, airlines will use this strategy. Typically, however, selecting to go with a 100% full at the same fare strategy, will NOT produce the most profit for the airlines (As determined by historical airline performance – And note that achieving 100% full is not likely regardless of pricing). The airlines will therefore, most often, choose to sell through variable airfare pricing levels to maximize profit and target a more achievable (Less than 100%) flight occupancy, based on that pricing strategy.

If, in the above $20,000 per round-trip cost situation, the airline were to sell-out all 50 seats but only at $400 per passenger, they’ve produced only $20,000 and have only broken even. If they sell all seats at only $350 they have just lost $2500 on the flight. In many of those instances, where Bob Cortelyou vice-president of network planning from Delta noted, “People assume full flights are profitable and are surprised when the flights are cancelled”, the airlines were likely not getting enough revenue on an average per passenger basis with enough passengers to meet profitability and this is why the flights were discontinued. Full-Flights do not always equal profitable flights. Airline passenger targets are different because this approach will typically not fill the flights.

More importantly, for communities and tourism organizations, discontinued flights mean less access to your community via airlines and less opportunity to capture the longer staying and higher spending visiting guest that can spend a great amount locally. 

Fact 2: Unprofitable flights mean discontinued flights and even less tourism guest capture opportunities. Airline pricing to make maximum revenue sometimes equals less full flights and can mean a loss of tourism sales.

The airlines maximum flight revenue focus will often mean the last seats available on a flight are only available at high rates to attract the 20% airline passenger targets; which can mean in many instances, these go unsold. This is a condition very often present in heavy business dominant air markets but can also occur sometimes in leisure dominant air markets or mixed markets. Of course tourism organizations want flight profitability to also maximize the overall number of round-trip flights and seat sales sustained. They simultaneously, want more seats available at leisure air passenger “sellable prices” on each flight. Lower leisure “sellable prices” do not go after the airline passenger targets that drive higher flight profitability and so this approach is contradictory with the airline strategies.

What can tourism agencies do to align better with the airline passenger targets and maximize tourism guests and counter some of the airline limitations that come with the airlines “20%/70%” passenger revenue strategy.

1) Compete for and capture as many of the 80% passenger seats as possible!  First, remember that inherent in the 20%/70% rule is that typically, 80% of the flights seat sales are with the lower end fare paying guests which is right in the wheelhouse of the tourism target customer. You need to note, however, that this is also in the wheelhouse of local citizens looking to travel out from your airport on leisure trips of their own, so you need to get those seats sold to your tourism guests first, otherwise more of these 80% passenger seats will go to local citizens or other lower fare paying passengers which can prevent and/or limit your capture of inbound guests.

How?

1) By utilizing proactive airline service performance improvement techniques, which include noting competitive or better air prices, when and where they are available, to potential visiting guests in those competitively priced origination destinations. Do this with targeted messaging and in media that will reach these targeted guests. This will help greatly improve tourism inquiries, sales conversion and make a great start on capturing a larger inbound tourism guest share of the “80%” lower flight revenue seats.

2) By building and actively utilizing your own local/regional tourism “Network” of travel businesses to include air inclusive packaging or messages in their promotion. Air flight and airfare awareness is the first step to sales conversion, particularly with highly price-point sensitive tourism flyers.

3) By leveraging marketing investment in air inclusive efforts with the airlines to gain “Actionable” airfares or air promotions (Can sometimes be bonus frequent flyer mileage accrual) from which you can drive higher air sales conversion with guest inquiries particularly closer-in “Impulse” guest trip sales.

4) By determining your soft airline booking periods in advance of the flight departure through proactive measuring and management, so that you can better focus and direct actions like 1 through 3 above to improve air flight sales.  

5) By effectively setting up and utilizing “Wholesale Air Rates”, when possible, you can still at times offer lower air pricing within regular advance booking periods and through air/lodging inclusive packaging, gain incremental “Impulse” visitors who can help with late fill-in of your flights and lodging units.

While the above are effective approaches to going after passengers who are not the priority airline passenger targets it can help maximize the flight use by Tourism air guests.

2) Influence airlines on close to departure air seat management

1) Gather/use historical air booking knowledge to help guide airlines to keeping open more lower fare seats later in the booking cycle when history shows the airline passenger targets-higher fare passengers don’t show up to the degree they are holding higher fare seats.

2) Work on keeping open lower fare seats on competing airlines, sometimes will help influence other airlines in keeping available more seats at lower rates because of the competition.

While CVB’s, DMO’s and other tourism agencies can execute on some of the above actions with current staffing, hiring experienced tourism air professionals to work with your staff will help increase the organizational understanding of airline passenger targets and seat sales models. Community Flights… scott@communityflights.com  970-759-3559 can offer expert professional help with these and other air service performance improvement measures.

Know your Air Market and Air Carrier Business Strategy Before I go any further, I do want to point out that not all flight service markets and/or airlines use this 20%/70% rule. There are many low fare carriers, that because of their lower cost structures, can operate with a different passenger sales strategy. There are also some leisure dominant markets that are much more total flight occupancy driven and have much less variation in their airfares due to the leisure passenger dominance of these flights. With different airlines the airline passenger targets can differ.

The fact is that when enough higher fare paying travelers are not present in a market to have 20% of these passengers cover 70% of the revenue; the airlines use a different pricing/sales model. This alternate model will tend to have a smaller variation on the ticket prices and a higher % of lower fare seat availability. Again, the pricing model selected by the airlines, will be the one that will drive the highest profit. Low fare carriers: Allegiant Airlines, Spirit Airlines and Frontier Airlines, among others, most often do not use the 20%/70% rule.

Low fare service represents about 25% of airline service in the US. This is a significant share of the market. Based on this, knowing your air market air carrier business strategies in regards to airline passenger targets is import to your effective air service support actions. With the 75% US market share typically using the 20%/70% rule, you’ll want to execute certain strategies and with the other 25% who will often use a different rule when it comes to airline passenger targets you’ll want to use alternative strategies. The strategy you execute will depend on the carrier and the market. 

Other Pricing Formula Strategies/Oddities: There are other pricing strategies that seem odd to those not fully informed on airline pricing models and airline passenger targets.

1) Why does it cost more to fly 200 miles from Montrose, Colorado to Denver than the 1700+ flight miles Montrose to New York La Guardia airport on United sometimes?   You can of course substitute in your own example of why flying to a hub is more costly than flying through the hub to another destination. You could,  use American and flights from Austin to Dallas Ft. Worth costing more than Austin to Chicago through Dallas Ft. Worth.

a) While airline pricing needs to work on a per market basis it also needs to work on an airline system basis. Both will impact the airline passenger targets strategies. If you sell too many tickets Montrose to Denver or Austin to Dallas not enough passengers will be fed into the Denver or Dallas hubs to feed the Denver to La Guardia and Dallas Ft. Worth to Chicago flights thus jeopardizing the thru flights from the hub airports profitability. Providing enough feed to the hubs to connect to the thru flights is a critical strategy to successful capture of the airline passenger targets and airline system profitability for many of the major airlines.

 b) Often, higher fare paying business travelers, are going beyond the airline hub and this means more revenue to the airline. Airlines will therefore price the local non-stop flight to the hub extremely high to dissuade a buy on the local flight to save the seat for a sale for a higher paying last-minute flyer going beyond the hub. This often occurs in situations when a traveler that might be going last-minute on an international connection where the cost is $2500 in coach/$6000 in business class versus your $300 non-stop coach cost for a flyer just looking to fly to the hub. The airline wants to avoid missing out on accommodating the higher $2500 for just a $300 fare paying passenger.

2) Why doesn’t the airline offer standby fares? The simple answer is that standby fares don’t pursue the airline passenger targets. As it regards standby fares common logic dictates that getting some revenue for the remaining seats at the time of departure is better than having the seat spoil by going out empty. If Airlines are so focused on maximizing flight revenues why lose out on revenue that could be gained through offering standby fares where the passenger only travels if there is a  seat available at departure.

a) Time is money and operationally adding to the gate agent duties just before departure, the working of the “Standby Fares” adds an extra duty that raises the risk of flight delays and  costs of operating the flight which could more than offset the value of extra revenue received.

b) Airlines can train consumers, which can be both a good or bad thing. In the case of standby fares the training would be to get the lowest rate by waiting for the very last-minute via a standby fare versus the airline getting more revenue with a required purchase typically 21 or 14 days in advance.

Since the airlines focus on maximizing profit and airline passenger targets that help them maximize profit it doesn’t make sense to offer standby fares in most situations as this leads to lower overall flight revenue production and profit. 

3) Why doesn’t the airline offer local discounts to grab a greater share of local travelers?

 a) See reason in 2b above. Again this goes to profitability and the priority airline passenger targets.

b) The other reason I’ve heard is that there is a fixed cost that airlines don’t like to go below. Adding a local discount that could bring airfares below this fixed cost is a negative action to potential profitability so the airlines won’t do it.

Effectively working within the 20%/70% rule can aid tourism guest capture, air service performance, and possibly in attracting more airline service.
In conclusion, understanding airline pricing strategies, airline passenger targets and seat sales management and effectively applying this knowledge to how as a tourism agency you approach capturing tourism air guests, can offer tangible benefits to tourism. At the bare minimum this can help you increase your capture of higher spending air tourism guests. It can also help you to sustain the level of air service in times where air service is decreasing. If your efforts help to capture more tourism guests and this improves flight profitability, you could be helping the airline to add more service and grow seat capacity even more. This would give more lower fare seats from which to capture more of the tourism air guest target vs. the airline passenger targets.

If you fail to understand your airport commercial airlines pricing model(s), particularly if it is the 20%/70% rule, you may end up wasting energy trying to influence airlines to deliver lower fares and fuller flights in a way that has no chance to succeed. If the airlines don’t see the opportunity to improve their overall profitability, asking for changes in their airline passenger targets (how they run), that runs counter to their belief about how they can reach profitability, you will have zero chance for success.   

A higher level of airline pricing and seat management understanding that a professional tourism air service professional can bring to your organizations efforts can help greatly improve both the tourism guest capture from air service and the air service performance itself. While the airlines focus on the 20% of passengers because of the 70% revenue driven, drives their airline passenger targets, it is often maximizing the revenue delivery within the 80% of lower fare paying passengers that means the difference between profitable flights and unprofitable flights. It is in the interest of the community that flights run profitably as this can sustain air service capacity levels and/or help possibly grow air service capacity. On the contrary, airlines can cancel unprofitable flights, which diminishes the tourism air guest capture possibilities.

Community Air Service Optimization
Good Air Service Performance Not New Flights should be Initial Focus

Community Air Service Optimization, not new air service acquisition is the wiser focus of airline service development organizations. Communities should start with air service optimization. Today’s airlines are risk averse. Incentives and revenue guarantees as well as other risk abatement measures are becoming required tools in the tool box of communities looking to capture more air service at their local airports. This likely comes as no surprise to many of you.

Despite the recent increase in incentive driven air service acquisition measures, commercial air service has seen a decline in operations since 2007 of about 14% (2007-2012 per the May 2013 MIT Small Community Air Service White Paper), with most communities showing a decrease in air service and this has occurred disproportionately to medium and smaller communities vs. large communities.

Community Air service optimization focuses on increasing passenger use and flight revenues on the communities current air service as a first step to successfully gaining new air service. Depending on passenger demand, air service growth may NOT always happen and/or be very limited. The benefits to focusing on community air service optimization can still be derived by the community through increased guest spending, airport services used and fees collected etc.

Community Air Service Optimization
More than Acquiring New Flight Service

Despite the above air service development challenges, many communities stay laser focused on just one air service development action: acquiring more air service. Communities often focus on adding new markets or capacity, and don’t often take action on other community air service optimization actions. Most importantly, these communities are unaware of how their current air service is performing.

What other air service development actions should communities be pursuing other than adding more air service?

Communities looking to acquire more air service, in many cases should first take actions to build-up their current air service profitability performance!

That’s right. Many communities while actively seeking additional air service have current air service not performing to a strong financial level for their partner airlines. These communities are not focused on effective community air service optimization. For example, their current incumbent air service is not highly profitable or are not profitable, let alone producing a strong profit.

In this type of situation it’s nearly impossible to successfully attract new air service or attract air service in a cost-effective way for the community. These communities are overreaching and they won’t see community air service optimization. Surprisingly, many communities have no idea and do not even look to see if they are performing well with their current air service…they have only one focus, which is to add more flights and seat capacity.

You may ask: Doesn’t acquiring more airline seats typically mean more flying guests and more airline passenger enplanements? This is a good thing, right? Yes…and NO!

Because of the value of each air passenger to a community, particularly inbound visiting flyers, due to the spending they do in the region, on this basic level more passengers means more economic activity for your community. This is a good thing.

On the other hand, if there are not enough extra passengers and more extra revenue on the flights to cover the increased air service costs, the flight service won’t be sustainable. Unsustainable airline service adds “an air service failure” to your communities air service record. Unfortunately the positive from the growth in passengers will only be short lived and won’t be sustained.

This increases the various airlines perceived risk of air service to your community going forward and either makes it difficult to obtain air service when you next ask or the cost of this air service will be more expensive to your community. This impedes community air service optimization efforts. You may have also wasted community air service support dollars in the process!

Why wait until an airports flight performance is strong before trying to acquire more air service?

A Formula 1 race car driver wouldn’t race a car that wasn’t properly tuned up as they could blow the engine in the race. They would first work on this vehicle so it was in a condition to where it could potentially win the race, before entering the race. Air service acquisition, and sustaining air service, in many ways, is a competition like Formula 1 racing. As noted at the top of this article, the current environment indicates little to no air service growth and any air service growth that does occur going forward, will likely only go to the most competitive and strongest air service markets.

Communities and Airports should first, build-up your current incumbent airline service (Community air service optimization) to where it is performing well financially for your partner airlines. An airline that looks at your airport and sees strong and profitable air service is more likely to consider new service to your airport than if you have a modest or worse air service performance history. If the airline still perceives risk but will consider more air service, it will take a lower community investment to abate this risk and acquire the service with strong incumbent flight service versus modestly performing flights.

A wise and prudent air service investment is an extra consideration for building up to strong flight performance before actively seeking to acquire more flights. If you invest community monies in more air service before you’re ready to successfully run these flights, you have just flushed community investment money down the drain when the air service is cancelled. This won’t lead to community air service optimization. Additionally, your community has become a more “Risky” community air market option in the eyes of the airline. This will make it harder to acquire more air service in the future.

If instead, a community invests in focused and professional flight support services that build-up their flights to a more profitable place, before then pursuing air service increases, you will have invested your money more wisely. You will have also shown community air service optimization is a focus AND given yourselves a better chance for long-term air service development and management success.

I understand the difficulty many airport managers and other community organizations have with holding off the “More, More, More Air Service Mantra” many communities and community leaders can put out. I further understand that focusing on flight performance improvement, is not as exciting as getting a new market or larger aircraft that brings your community more seat capacity. It is the most efficient and effective method, however, if you want to build-up sustainable air service long-term.

My recommendation is that you counter the push for this short-term flight increases by focusing on the long-term and bringing up the following question for your community leaders to consider:

1) “If you were running an airline, and you were highly risk averse, would you add service in an airport market where community air service optimization wasn’t happening? Where the air service wasn’t making money or was making only a little money and where there wasn’t an excess of passenger demand?”

Or

2) “Would you be more likely to add air service to another airport that came to you after having iffy air service performance a few years earlier, but took proactive steps to support and grow passenger enplanements and revenue on their flights. Where this strongly focused optimization effort moved the service to strong profitability?  A community that also appeared to have stimulated passenger demand that exceeds current capacity?”

Let’s say I’d be surprised if your community leader chose to add service for situation 1 above over situation 2. The view on adding service is different when you’re an airline looking at the added costs and risks to profitability than when you’re a community focusing on increasing air access.

Focusing first, on community flight airline service passenger and revenue build-up to airline profitability, brings benefits beyond air service acquisition!

While you’ll benefit from long-term community air service optimization and development success with a build-up approach, the fact is that it’s possible many communities won’t be able to raise their flight performance to a point where they can pursue more air service…why should they be proactive in building-up their incumbent air service?

There are two main reasons to make the effort to build-up current air service via a community air service optimization effort….

1) You could have at risk air service where if you didn’t improve performance you could lose some or all of this service and

2) You improve your airport’s financial performance and your communities economic benefits received with every incremental passenger and bit of flight revenue you capture.

I know of an airport and community that is anxiously looking for air service from a third airline, to a third hub market. They feel this service will lead to community air service optimization. Unfortunately they are doing a 57% load factor with their incumbent air flights. The national average now for flight occupancy is about 83% for larger aircraft and 76% for smaller regional jets. While their revenue per passenger is slightly stronger than average, their overall flight revenue performance is questionable on airline profitability due to being well below the 83% load factor average nationally, 76% for regional flight service. Therefore, one or both of their flight markets could be at risk. A focused air guest capture/leakage recapture effort could improve their load factor and likely their revenue performance, moving them away from having incumbent air service that is potentially at risk. In this situation, it likely wouldn’t create enough of a performance improvement, however, that would rise to the level where pursuing more air service acquisition would be successful.

This is the perfect example of where, while gaining new air service is not likely with an air guest capture/leakage recapture effort, this community could produce a community air service optimization situation and would see other benefits from this effort. These other benefits would include creating a more sustainable service with their incumbent flights long-term and where more passenger capture; both visitors and locals, would increase local economic activity and strengthen airport revenues.

Recommended Steps for a Community looking for successful Community Air Service Optimization and ultimately Air Service Acquisition:

1) Evaluate all of your current incumbent air service to estimate its profitability/strength
(Evaluate total service and by airline market–use a professional aviation firm)

2) If your air service is strong to very strong – Create a plan to meet community air service optimization and attract more air service. Continue to build-up your current air service even more via air guest capture/leakage recapture professional services  to out-compete other communities looking to add air service.

3) If your air service is weak or so-so – build-up your current air service through air guest capture/leakage recapture efforts. This can lead to community air service optimization.

4) If you’ve done step 3 and it’s then built-up to strong to very strong profitability performance air service – create a plan that helps you pursue and effectively support more air service.

5) If you’ve done step 3 and it’s improved your flight performance but not to the level to where you can likely successfully pursue more air service, keep working on your flight performance build-up. In the meantime appreciate the increased economic benefits you’ve helped drive to your airport and community through increased airport driven economic activity. You can meet community air service optimization without the ability to add more air service.

Summary:

Municipal funding available to support community services in general, is very limited. In today’s environment the idea of investing this money wisely is critical to best providing a return on investment for your community. When you focus on community air service optimization instead of moving forward in trying to capture more air service when your community does not have a strong incumbent air service performance, this is a wiser course of action. You are unlikely to be successful and in the long-term pursuing more air service when incumbent air service is performing weakly. Focusing on air service growth over community air service optimization tends to lower your communities return on air service investment AND will spend more of your communities limited resources than taking more prudent actions would.

Community Flights recommends a strategic approach as it regards air service development and management that has communities first consider the strength of their current air service. This will then direct the community & airport next actions to either:
1) Act to acquire more service or
2) Act to build-up current air service profitability performance before acting to acquire more air
service….the community air service optimization approach.

In essence, Community flights believes airports and communities should act in a way that best focuses their resources on actions driving the best air service financial return on investment. Community air service optimization will help maximize the effectiveness of the airport air service in delivering a strong return on their community investment.

For the communities where it would be wiser to build-up flight profitability performance, Community Flights offers air guest capture/leakage recapture professional services. We have a track record of success in improving flight performance AND in capturing more airline service (And in a time when most airports lost air service capacity). To ask about the Community Flights air guest capture/leakage recapture services email: scott@communityflights.com or call at 970-759-3559.

Assessing the profitability performance of your communities flights is also a critical action to knowing if you now have community air service optimization. Communities need to decide if taking air service acquisition efforts are wise or if they should focus on flight performance improvements (And with what air service markets). Community Flights offers services that will evaluate your air service by market. This air service profitability audit will help gauge where your flight markets fall in regards to profitability*. Emailing scott@communityflights.com or calling Scott at 970-759-3559 can give more details on this service.

*Note: Airlines have different ways of calculating air service cost and revenue allocation and often their method is proprietary, therefore this profitability audit is an educated estimate of the markets reviewed in relation to their profitability.