international air service development at boston logan · international air service development at...
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Presentation Overview
Logan Today
How Massport Identifies Opportunities
What Airlines Look For
How Massport Won JAL Service to Tokyo
Next International Targets
How You Can Help
Logan International Airport Today
Record 28.9 Million Passengers in 2011 – Up 5.4% Y/Y
Ranked as 3rd Fastest Growing Airport in the United States – Up 5.2% in 2012 YTD
Served by 34 Air Carriers
Including 18 Foreign Flag Carriers and 6 Low-Fare Carriers
High-Value Cargo Market
Not Dominated by Any Carrier or Any Airline Alliance Not a hub for a U.S. carrier
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Boston Logan Has Nonstop Domestic Service to 72 Destinations
Note: Includes Seasonal Service, Source: OAG & Innovata Schedules
MontrealHalifax
Praia
PontaDelgada
Terceira
Reykjavik
DublinShannon London LHR
FrankfurtMunichParis
RomeMadridLisbon
Amsterdam
ZurichToronto
YYZ & YTZ
BOS
Bermuda
Santo Domingo
Punta CanaSt. Maarten
ProvidencialesNassau
Aruba
Montego Bay
Cancun Santiago
TokyoNRT
Ottawa
Boston Logan has Nonstop International Service to 31 Destinations
Note: Includes Seasonal Service, Source: OAG & Innovata Schedules 5
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Massport Has a Focused, Thorough and Proactive Route Development Strategy
Use Industry Data Sources, Analyze, Identify and Prioritize Market Opportunities and the Airlines/Alliances Best Suited to Succeed
Monitor and Influence Federal International Regulatory Matters Affecting Boston Air Service
Connect Worldwide to Meet with Airlines and to Participate in Industry Conferences
Partner with Government, Businesses, and Educational Institutions to Win New Airline Service
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In Selecting New Target Markets for International Service, Massport Considers a Number of Factors Before
Approaching Airlines
*Orders Pending
Largest BOS International O&D Markets Without Nonstop ServiceYE 2Q2011
O&D Average Global Airline AdequateRank Market Passengers Fare Connecting Hub Aircraft
1 Tokyo 69,187 $1,141
2 Barcelona 60,321 $4403 Shanghai 57,816 $937 *4 Tel Aviv 56,949 $674 5 Beijing 56,893 $778 *6 Vancouver 54,387 $320 7 Athens 50,984 $4608 Hong Kong 50,741 $1,133 9 San Jose 49,788 $248
10 Guatemala City 47,627 $238 11 Seoul 45,390 $908 *12 Mexico City 42,613 $262 13 Sao Paulo 39,202 $739 14 Mumbai 38,510 $726 *15 Delhi 34,028 $791 *
Airlines Are Attracted to the Strength of the Market Served by Logan
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7th Largest Metropolitan Area in the U.S.
5th Highest Per-Capita Income in the U.S.
Worldwide Leader in the Diverse, High-Value Industries Finance, Healthcare, Consulting, Higher Education, Biotechnology, Telecommunications, Technology
Nation’s Center of Education and Innovation Due to 270 Colleges and Universities in New England
Attractive Tourist Destination With Over 20 Million Annual Visitors
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While Airports Are Able to Influence Airline Decision Making About New Routes, the Final Say Rests with the Airline
– and It Is Almost Always Based on Profitability
Competitive Profile Major origin and destination traffic (as opposed to connecting) Significant percentage of business and first class passengers Expected route profitability compared with other route choices Strategic fit with airline/alliance route network Presence of significant high-value cargo market Aircraft in fleet appropriate to serve the proposed route
Comparison to Other Market Options Opportunity cost Willingness of airport/community to share risk at beginning of service Integration with economic and tourism development partners
to ensure success after service start Presence of relevant ethnic population Airport costs
International airlines are risk averse – In selecting new markets they look for key market attributes and business model fit
How Do We Win in Such a Competitive Environment?
An Unserved Market with No Existing Carrier to Compete for Passengers
The Right Aircraft
An Airport Incentive Program
The Asia Task Force Connected the Customers to the Carrier
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The JAL Example
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For JAL/AA, many other cities within the 787 range of Tokyo were candidates for new service
Shenyang
Saipan
San Francisco
Seattle
Tokyo
Denpasar-Bali
Cebu
QingdaoJeju
Washington DCBoston
Toronto
Fuzhou
Rome IstanbulBarcelona
AmsterdamMunich
Milan
Cairns
Vienna
JAL/AA AnnualRank Market Passengers
1 San Francisco 431,0002 Denpasar-Bali 247,0573 Saipan 233,5234 Rome 194,8115 Mactan 163,6816 Milan 156,5787 Istanbul 149,0518 Jeju 139,4329 Munich 134,99410 Seattle 133,25311 Cairns 132,67812 Qingdao 118,63213 Washington 116,98914 Amsterdam 111,57115 Vienna 102,89816 Barcelona 100,73617 Las Vegas 99,24718 Shenyang 95,55319 Fuzhou 88,07520 Toronto 86,79421 Boston 85,005
The New Generation Aircraft Made Boston a Competitive Option for Nonstop Service to Asia, and the Economics of
the Tokyo Route Look Promising
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B787 and A350 Designed for Mid-Sized Markets
– 200-250 Seats
Fuel-Efficient Aircraft
Ability to Fly to Long-Distance Markets Fully Loaded from Shorter Runways
Boston is Now in the Running for Service to New Regions of the World
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Massport Created an International Air Service Incentive Program to Help Attract and Support
New International Flights to Logan
Targeted to New Destinations in: Asia/India Mideast/Africa Central America/South America and Mexico City
Requires Nonstop, Year-Round Scheduled Air Service, Operated at Least 4 Roundtrips/Week, Continuously, for at Least 1 Year
Financial Incentives Include: Landing fee rebates Marketing support
Nearly every international airport in the world offers financial incentives
for new/expanded air service
Boston Logan International Air Service Incentive Program
Massport Created the ‘Asia Task Force’ to Help Attract and Support New Nonstop Service to Tokyo
Members Include Top Executives from the 250+ Massachusetts and New England Companies and Organizations Which Travel Extensively to Japan and Asia
Surveys and Discussions With Asia Task Force Members Provided Key Information On Travel Demand to Japan and Asia Including members’ overwhelming support for nonstop service over
their existing frequent flier club benefits
In Early 2011, Massport Arranged Separate Meetings Between the Asia Task Force and Two Airlines Interested in Serving Boston from Their Respective Tokyo Hubs Japan Airlines’ top executives were impressed to hear directly from their
‘future customers’
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Massport plans to use this Asia Task Force ‘template’ for other new international targets
BOSBeijing / Shanghai
Delhi / MumbaiDubai /
Abu Dhabi /QatarMexico City
Tel Aviv
Sao Paulo
Massport is Focusing on These Top International Opportunities
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Nonstop Service to China is Now Our Top Priority: Boston is the Largest Unserved U.S. Market for Both Beijing and Shanghai – and the
4th and 7th Largest Unserved Global Market from These Cities
Strategy Continue discussions with 4 Chinese carriers and CAAC
Air China, China Eastern, China Southern, Hainan Educate Chinese carriers and CAAC about economic relationship between
Massachusetts and China Retained dedicated China market representative Demonstrate success of Boston–Tokyo
Targeted Start Date – 1Q 2015
Challenges 787 Delivery Schedule U.S.–China Bilateral Agreement Difficulty in obtaining visas for
Chinese nationals Limited awareness of Massachusetts beyond
Harvard/MIT Cities around the world are aggressively pursuing
service to China 16
Other International Targets
Mexico: Mexico City Carrier Targets: AeroMexico, Volaris Targeted Start Date: 2Q 2013
Israel: Tel Aviv Carrier Target: El Al Targeted Start Date: 4Q 2014
Middle East: Dubai, Abu Dhabi or Qatar Carrier Targets: Emirates, Etihad, Qatar Targeted Start Date: 2Q 2015
Brazil: Sao Paolo Carrier Target: TAM Targeted Start Date: 4Q 2015
India: Delhi/Mumbai Carrier Targets: Jet Airways, Air India Targeted Start Date: 2Q 2016
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The Regional Economic Impact of New International Service is Significant
Source: ICF SH&E Analysis Note: Annual numbers, steady state, may not add due to rounding Economic Impact figure includes: Direct, Indirect, and Induced economic impacts, as well as Income and Sales Tax
Economic Impact ofNew Intl Market New Intl Air ServiceFrom BOS (millions)
Beijing $113
Delhi $98
Mexico City $57
Sao Paulo $94
Tel Aviv $46
Tokyo $187
Total New Markets $595
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Working Together, Logan Can Secure Valuable Air Service to New Destinations
Broaden the Business Case Beyond the Standard Airline Data Sources
Build Air Carrier Awareness of the Economic Relationship Between New England and Our Target Markets
Identify Top Business Customers and Strategically Connect Them to the Air Carrier Through a Coordinated, Organized, Efficient Effort
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Massport Contact Information
David Mackey Interim CEO and Executive Director [email protected] Edward Freni Director of Aviation [email protected]
Betty Desrosiers Director of Aviation Planning and Strategy [email protected] Yil Surehan Director of Airline Route Development [email protected]