Time to Share Airline Secrets

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By Tom Smith
During the ACI-NA Air Service Data and Planning Seminar, which wrapped up earlier today in Long Beach, the nearly 100 participants learned some of the secrets of airline route planning from six current and former airline planners.

Monday morning began with three former airline planners who now work as air service development consultants — Jamie Kogutek, Sixel, formerly of AirTran Airways; Mike Lopez, Seabury APG, formerly of Continental Airlines; and Zach Mensen, Intervistas , formerly of Delta Air Lines.  Each of the three had left a carrier in the last 18 months.

As ex-airline employees each shared information that they could not before. Their secrets:

  • Keep up with what airlines are doing in terms of strategy
  • Know if decisions are made top-down or bottom-up.  At some airlines new routes are ultimately a CEO decision. The new United is using old Continental methods.
  • While building relationships is important, you need to follow an airline’s prescribed channels when trying to win a route.
  • Deal with the planning team, but do maintain your relationships.
  • Airports that survived Southwest’s cuts did so because they had good relationships. It becomes a lot harder to cancel routes or cut capacity when you have good relationships. It is the tie breaker.
  • Some carriers appreciate JumpStart meetings with currently-served airports just to check-in, especially in this environment. But others cautioned to know your carrier’s attitude because don’t want to use JumpStart meetings as a relationship building session.
  • Don’t bring the mayor.  Do get community decision-makers involved, but not necessarily at those first meetings. Keep the group small.
  • Different carriers have different goals for different conferences. Delta tries to meet with each airport at least once a year. A conference meeting could take the place of a headquarters meeting.
  • There are competitive reasons for adding routes. Stomp out the competition. Sometime a lot of those decisions come from higher up.
  • Market share plays are to make sure your brand is standing at the end of the day. We are now nearing the end of the game with this game ship.
  • There will still be a market for 50-seat regional jets. There are certain roles that they will be viable.
  • Airport operating costs. It a part in the decision, but it is not a deal breaker.
  • Airlines don’t care about total annual passengers. Airlines talk about emplacements, not passengers.
  • How does you community relate to places in my network is a key variable. Or, to which Florida markets your community travels. What business in you town has an office in Atlanta or needs to connect in Atlanta?
  • Use corporate sales data only if they would be traveling on my airline.
  • An airport trying to forecasts my costs is a waste as I know my costs. If you do them, they need to be believable for your credibility.
  • More important to use the data before the presentation not during the presentation.
  • Find the things sticks out. Tell me something I don’t know.
  • If costs are not right, it can have a negative impact on the meeting.
  • How forgiving are you for data mistakes — as long as carrier’s name was correct.

 

This morning, currently-employed airline planners shared their advice on making JumpStart presentations. Presenting we’re Adam Green, Virgin America; Nicholas Haan, Southwest Airlines; and Mark Kopczak; Spirit Airlines.

  • Worst JumpStart mistake:
  • Green: One airport failed to provide requested, additional information — that airport was under serious consideration. The airline passed them over.
  • Haan:  One airport promised an exciting opportunity but first it wanted us to lobby Congress to get them included into the service to D.C. zone.
  • Kopczak: You need to tailor presentation. One airport copied data from one city pair pitch made to a different carrier — they changed the city but not the data. Be confident with your information. We do check them.
  • What to include:
  • Tells us what we don’t know about your community and how it would fit into our network.
  • Spirit likes to see recent retail sales numbers because it’s tickets are impulse buys.
  • Does your business community “jive” with the typical profile of a Virgin America passenger.
  • Southwest does not read the presentations it takes back from JumpStart but instead adds the information to the files it has on each potential service community.
  • All agree don’t give paper presentations to take back but rather give them a flash drive or e-mail it later.
  • Know the airline’s strategy and business plan. Make sure the pitch is in line with the airline’s plans.
  • Make sure the pitch matches the aircraft the carrier would likely fly on the route. Don’t do a forecast that is barely defensible for a small plane when the carrier usually doesn’t fly that aircraft.
  • Don’t pitch a route on the basis if the new route is there then the community will naturally fly it.
  • Layout costs upfront. Spirit will ask for it right away. We want to know the rates and charges.
  • Be up front.  The airlines don’t like to be surprised with major projects that could impact their costs or their operations.
  • Beyond the runway capacity the airlines don’t care about the airport terminal facilities, its concessions and  awards during the initial presentation. At this stage the economics of the community is more important.
  • Route selection is not a competition or reality game show in that cities are competing against each other for the next aircraft. Airlines are looking for the best revenue opportunity.
  • Incentives:
  • Green: They are important to us.  Some airports get it and some do not. Long-term not important to strategy. But in the short-term they are. In a “bake-off” they have made a difference. Stress the partnership with the airport. You cannot make a market out of incentives, but it can make a launch.
  • on our five year plan
  • Work in part ships with community groups. The airport role, I understand needs to be neutral. Then the community group can take the lead to build relationships. The community are really invested because they want to be on the Southwest network.
  • If your presentations mentions a community group, give examples of how it has worked with other carriers. These really good stories of earlier successes push it over the top when decisions are made.