Air Service Community Education – Target Personal Benefits
Air Service Personal Benefits can Drive Strong Program Support

Air service community education needs to target personal benefits. Because air programs are highly personal in their “Community Impacts,” communities should focus on active and effective air service community education directed at the various personal benefits of individuals and businesses.

Unless your air service Community Education Program is demonstrating relevant personal results, support for the air service efforts will wane and your program could move to lacking the broad support needed for success and ultimately fail.

With air service community education, the air service results must be personal. Each individual and business should clearly see the personal benefits they receive. If the personal benefit is a lower airfare or more visitors meaning more customers in their store, the argument for air service support needs to be made on a personal basis. Unless people feel they benefit personally, it becomes hard to secure the investment needed to make the air service development effort successful.
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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 practices…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 ask 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 to create an airline and community win-win air service support and performance environment. You can get more info about Community Flights at www.communityflights.com. You can contact Scott Stewart at scott@communityflights.com . 

Colorado’s Fight for Flights!
For Communities facing a challenging air service acquisition environment who are looking to improve their air service but are also finding the going difficult, there is an interesting article in the Denver Business Journal on this battle for more service in today’s dynamic and challenging airline industry titled “Colorado’s Fight For Flights”. Scott Stewart from Community Flights was questioned and quoted in this article.

Colorado’s Fight for Flights discusses:
> Recent reductions in air service access to smaller and medium size communities
> Community and Airport incentive and revenue guarantee programs designed to attract and
support air service.
> The value to communities of air access into the national transportation system.
> How support of air service is critical to sustaining or growing air service.
and more…

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 in order to mobilize community support efforts and assist clients, bridge the “air service understanding gap” with the airlines in order to create an airline and community win-win air service support and performance environment. More info about Community Flights can be found at www.communityflights.com. Scott Stewart can be contacted directly at scott@communityflights.com . 

A Community Flights Case Study:
AIRPORT LOAD FACTOR-A Strong Factor in Air Service Growth

In a recent case study of seven mountain/ski oriented airports conducted by Community Flights, there was a strong correlation between a prior years load factor and the ability of the airport to retain and grow air service or to loss air capacity the following year. High Flight Occupancies seem to be a strong factor in air service growth.

% of ski airports with a loss or growth of air service based on prior year LF%*

       2012                                         2013                                  2013
Performance                             Growth %                         Loss %
<65% LF                                          16.60%                             83.40%
65%-69% LF                                   68.75%                             31.25%
70%> LF                                          77.78%                             22.22%

While the above shows flight occupancy is not an absolute indicator of air service development, the results do indicate that communities that facilitate a stronger load factor, will trend to generate more flight revenue and appear to have greater opportunities for sustaining or growing air service in subsequent years/seasons.

Maximizing flight revenue and minimizing flight costs in general remain the main objective of the airlines. Focusing on gaining incremental traffic via leakage recapture and more local and visiting passenger capture increases flight occupancies and more often than not increases flight revenues. This helps your community strengthen your flight service in the eyes of the airlines, AND often makes future flight acquisition more possible.

*Airports looked at in the case study: Montrose (MTJ), Aspen (ASE), Vail-Eagle County (EGE), Hayden-Steamboat Springs (HDN),  Jackson Hole (JAC), Gunnison-Crested Butte (GUC), Sun Valley (SUN)

An airport by airport look at the effect of the prior year load factor in the December – March / April – May / June – September / Oct – Nov seasons on the next years seat capacity, are what are represented by the above chart results. These results are cumulative of all four quarters on a percentage basis.

Other Factors There are other factors, other than prior year/season load factor, that reflect the year over year schedule capacity changes, chief among them is total revenue produced on the flights and with community incentive payments. All of the communities in the case study have some level of revenue guarantee incentive with the exception of Aspen who tends to have the highest average airfares in the competitive set. (Aspen offers a significant marketing incentive to the airlines in order to acquire air service).

Incentives can push a financial loss on a flight route to a profit. This will skew the schedule capacity results as it regards some situations where  lower load factor flights see a sustaining or growing of air service. In most of these instances, without the financial incentives, the community wouldn’t produce overall flight revenues that were at a profitable level and would therefore likely see air service capacity losses.

Its about overall capacity profitability. Another important factor to consider with these ski airport market results is that even with revenue guarantees, many of the airlines are looking at overall capacity during the season (Revenue Guarantee Flights and Non-Revenue Guarantee flights). The airlines are measuring the totality of the revenue guarantees and projected flight revenues they believe will be produced against what frequency and capacity level they think they can operate all their flights profitably. For example if the revenue guarantee flights operate profitably but the non-revenue guarantee flights operate at a loss due to too much capacity in the market, the airlines will self-discipline the capacity either in the current year or the following year by lowering capacity on the non-guarantee flights to get the overall capacity to a place of profitability for all of their flights.

(In the case of revenue guarantee flights they will raise the guarantee as part of the profitability equation if they feel from prior performance not enough total revenue for all their flights will be driven).

Incentives/Revenue Guarantees don’t trump airline profitability. What this means is that while incentives/revenue guarantees can  obtain for communities, an opportunity for air service from a new market, your ability as a community to attain and sustain an overall increase of air service capacity or new market service, rests with how the profitability equation works with the airline on an “All Encompassing” air service basis.

If a community increases air service and the air service with the airline inclusive of the incentives, makes all the flights profitable, the community can possibly see a sustaining or growing of air service in the following year. If the capacity increases do not lead to a “Complete Air Service Flight” profitability net of all the flight service (Both revenue guarantee/incentive and non-incentive flights) the following year the airline(s) will self-discipline capacity thru reductions of the non-revenue guarantee flights (If the revenue guarantee flights are not reduced), to get to a capacity level they think will help them achieve their profitability goals.

Attaining higher load factors, as seen by the chart, appear in general terms to help drive stronger profitability and therefore year over year growth in air service capacity. This makes sense as typically, although not always, higher load factors will increase operating flight revenues. Lower load factors, on the other hand, typically drive lower revenues and are more likely to drive reductions of air seat capacity.

INCENTIVES TYPICALLY CAN IMPROVE THE PROFITABILITY EQUATION ONLY SO MUCH AND ARE LIMITED IN THIS IMPACT!

Authors Note: Typically incentives and/or revenue guarantees just produce a community opportunity of air service. It is the actual air service performance that will dictate continuance or growth of air service. Communities should only add service they believe can succeed on a profitability basis without negatively impacting incumbent service and the overall airline service profitability if they desire air service sustainability or growth.

Strong air service load factors can lead to growth in air service. Communities looking to sustain and grow air service flights should first and foremost put a focus on ACTIVELY supporting increasing their flight load factors. Communities should also know how well their load factors compare with the national average. In a shrinking air service flight environment, out-competing and out-performing your competition can be a key determiner of who sustains and grows air service and who loses air service. While all communities should look to maximize their load factors due to the economic value they receive from increasing the number of their visiting guests, the additional need to retain your flights and possibly grow your air service capacity, dictates that an active effort to maximize load factors should be a priority focus of your community.

NOTE: “A visiting guest that can’t get to your community can’t spend money and positively economically benefit your community!”

Need help with leakage recapture & incremental passenger capture? Contact Community Flights at scott@communityflights.com / 970-759-3559. We have a successful track record in passenger leakage/capture programs.

A look at the most effective methods of DMO Air Service Involvement

In a recent blog post, we discussed: How Air Service Benefits a DMO. The key benefit was that air tourism guests spend a lot, typically from 40%-50% more than drive guests. In this case, the How a DMO Benefits from Air Service also serves as the Why a DMO should actively support with their community air service – air service helps increase community tourism spending and economic benefits.

In this article, we’re going to look at How a DMO Should Actively Support your Community Air Service. Some methods of tourism agency engagement are more effective in helping maximize the air service benefits to DMO’s than others. A DMO should look to be as effective with engagement in air service; a key part of critical tourism infrastructure that helps DMO’s meet their economic benefits mission, as possible.

     1.       Involvement in air service should be Active!

In many communities, involvement by a DMO in their local/regional air service is relatively passive. They may post the non-stop air service markets on their website; but outside of this there is not a lot of support for their local airports commercial flights. Oddly, you’d be surprised how many destination communities don’t have a page that specifies how to get to the destination via the air access available. We believe these DMO’s are missing out on a big opportunity by not doing more to leverage and promote their air service.

• Key Fact – Many guests book air at the same time as their lodging & activities

If a DMO doesn’t take strategic note of the key fact noted above, they may find other tourism destinations capture tourism air guests that could be coming to their destination.  Other destination communities who are monitoring and leveraging competitive air price/convenience value situations will have a competitive advantage. In a community that Community Flights recently worked for, over 70% of the visiting guests booked their airfare at about the same time as they booked their lodging/activities.

Communities should be selling air inclusive travel via local fulfillment sources (Central Reservations Services), tracking and noting airfares against what their competition fares are and including the air element in their promotion messaging when and where their community is competitive or has a competitive advantage in order to maximize guest capture versus their competition. Your local reservations sales agents need to be well trained and sell air effectively within the overall guest request in order to maximize tourism guest capture including maximizing the capture of guests that can access your community via your air service.

     2.       Engagement with Air Service should be Strategic! Do you know whether your airfares are Average, High or Low, versus your competition? The cost of the air ticket to get to your destination along with the cost and value of the lodging and activity elements will dictate what visitor guest segments are likely to be acquirable for your destination.

If your airfares tend to be average to high, you may need to target air inclusive visiting guests that are higher-end and willing to spend more on their trip. Targeting a lower-end guest when your fares are high will likely not be an efficient or effective way to gain their decision to visit your destination. The key to maximizing your tourism air guest capture is putting out the right air inclusive trip message in front of the right air inclusive passenger segment at the right time (When you are competitive or have a competitive advantage) via the right media. It starts with matching your tourism product including air service, with the correct tourism guest segments.  In essence, influence potential guests in the pre-departure influence period and influence them with the right offer based on the total travel economics present.

• Key Fact – Not all air guests are price driven – many are driven by convenience or schedule among other factors and most have a blend of price/convenience/schedule considerations in their air decision process.

Community Flights recommends that communities heavily use good data in their strategic marketing process to best drive their air inclusive tourism marketing support. This should focus on determining what passenger segments are most attracted to the destination currently, what passenger segment types the community wants to attract and should be constantly monitored for changing travel trends and adjusted for the overall community air guest mission.  In essence, influence potential guests in the pre-departure influence period with sellable packaging and messaging that is meaningful to the specific air inclusive tourism guest visitor segment.

     3.       Involvement in Air Service should be highly cooperative with other community air service stakeholders!

If involvement by a DMO with air service is only on a direct basis with guests and potential guests, the DMO is missing out on opportunities to strengthen the overall community air service effort. A weaker air service effort can negatively impact the benefits tourism organizations can derive from air service. The DMO may be left to lament why their airport doesn’t have better service from a key tourism market or more importantly….why their air service capacity continues to decline. A tourism organizations active involvement could help better align the air service to where passenger demand is and increase the economic benefits delivered to the community.

• Key Fact: From 2007-2012 there has been about a 14% decrease in Air Service Departures – the air service decrease is about 21% when looking at medium and small sized communities.

It’s easy to see how fewer air seats make it more challenging to capture typically lower spending leisure air guests and thus raise the economic benefits driven by your DMO. Communities where DMO’s actively engage with their airport, economic development organizations and governments, among other air service stake-holding agencies; in addition to with destination guests can often counter this loss of air service capacity trend.

In most communities, the air service business driven by any one industry is typically not enough in and of itself to support commercial flights. While higher fare paying business traffic is extremely important, revenue from lower fare paying leisure travel whether generated by your local tourism organization or from locals traveling on a leisure trip, is almost always needed to produce enough revenue so that the flights are profitable. What markets your community air tourism demand comes from, is important to crafting an air service schedule that can be successful and sustainable. DMO’s should make sure their voice is heard as leisure guests can have a great value in helping to maximize flight revenues and airline profitability.

Additional ways that your DMO can become more cooperative with community air service stake-holders includes:

• Membership on the board of your local air service development organization (Often the Airport) – Air service is a part of the local infrastructure that helps diversify business in your region, helps local businesses travel to interact with clients, locals travel to visit family and friends improving their quality of life and helps DMO’s to provide transportation access for tourism guests into your community to support your local tourism. Having your DMO air service needs vocalized regularly in a board environment or to the airport or air service development organization can help the organization make better decisions in serving the full complement of air service stake-holding constituencies and can help you as a DMO have air service that meets your needs and provides more sustainable air service for your entire community.
• Determine and share with your airport what market originations are key markets for air tourism guests – Example: If you pull a lot of visitors from New York City with connecting flight service and could pull a lot more if you had non-stop service, this should be known by the air service development organization and could help them better prioritize and make air service development decisions.  
• Coordinate your air service focused part of your marketing plan with other stakeholders like the Airport, Economic Development Organization etc… Example: You may have realtors marketing your destination as a 2^nd homeowner destination and some of their origination markets for attracting 2^nd homeowners may match key tourism guest markets. Co-op marketing with your tourism agency and the realtor industry may get both the realtors and the tourism organization more media for your marketing buy, stretching your marketing dollars and therefore helping you and the realtors capture more customers who fly into your community.More people on your flights will, of course, tend to strengthen your flights revenues without greatly increasing flight operating costs and help strengthen your air service profitability. If your flight occupancies also indicate that you are “Spilling” (Losing) air guests because there isn’t enough room on the flights, the airlines will be more willing to look at new market service and/or an increase in air service capacity for your airport. More capacity at your airport means a greater opportunity to capture longer staying – higher spending air guests aiding your efforts to improve your tourism direct spend in your community.

Summary Facilitating the community air service stakeholders rowing in the same direction in your community as it regards air service, helps strengthen your air service and improve your chances to sustain and grow air service capacity which benefits all. Enhanced tourism organization  involvement with air service can help your air service development organization target air markets that are more beneficial to your DMO guest tourism attraction efforts and improve your abilities to meet your DMO mission of maximizing the economic impacts as driven by capturing more high-end visitors.

By also being data focused in order to be strategic in your marketing messaging to air guests, you can also enhance your air guest capture by targeting the right message to the right air guest segment at the right time  (And via the right media) which will aid in maximizing your air guest capture.

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Community Flights is an air service facilitation, management and development company. We offer air service guest capture/leakage recapture, air service management and air service acquisition services. We’ve recently created a “Best Practices & Guiding Principles” summary for community air service.  This document is available free of charge to interested communities (email: scott@communityflights.com  for your free copy). For more detailed and involved professional air service assistance you can contact us via email: scott@communityflights.com , visit our website www.communityflights.com or call us via phone at 970-759-3559