Page 1

Passengers chasing seats Air service in New York State NYAMA Annual Conference September 20, 2012

InterVISTAS Consulting Group: The Transportation and Tourism Business Airline Business •

Airline Strategy and, Business Planning

Aircraft Finance

MRO Transformation

Production Planning and Integrated Operations

Route and Network Analysis and Scheduling Revenue Management Ancillary Revenue Development

PPP, Commercial & Finance

Air Service Development •

Market Analysis

Leakage Analysis

Route Strategy

Transportation Infrastructure Privatization

Transportation Policy

Border Facilitation

Economics & Regulatory

Financial Modeling/Due Diligence

Expert Witness Logistics & Supply Chains

Aviation & Transportation Security

Aviation Safety

Commercial Development

Development Economics

Airport & Transportation Planning


Strategic Planning

Food & Beverage

Tourism Development

Parking •


Market Analysis

Benchmarking/ Consumer Research

Business Case Development

Incentive Evaluation


Planning, Borders, & Security

Economics & Strategic Planning

Airport Cities


The September 2009 Question: Have we reached bottom yet?  There are signs of recovery from the recession  Uneven  Slow

recovery by region and by sector

recovery of jobs

• Air travel sector also senses an impending recovery, but… Changed by 2012

Consumer confidence still low

Carriers continue capacity squeeze in face of soft demand

Low yields due to price competition

Concern that jet fuel prices will spike again

Changed by 2012

The deployment of airline capacity in 2010 will largely define when, where and how traffic rebounds 2

Economic conditions typically drive air travel demand, and thus air service  Economic conditions, and air travel demand, vary greatly by region and sector  Stronger in Asia and Latin America (especially emerging markets)  Weaker in North America and Europe (especially mature markets)  Variable by economic sector

 Airlines are making progress toward profitability  Lowering unit costs where they can  Cautiously controlling capacity  Using consolidations, alliances and regional partners to mitigate risk  Establishing pricing power where possible 3

The global airline industry has recently returned to modest profitability

Source: IATA


Airline financial performance varies dramatically by region

Source: IATA


US airlines severely reduced capacity during the Great Recession

2009: Largest US airline capacity reduction since 1942

Source: ATA


Most recently, US airlines have carefully calibrated capacity with demand

3.8 2.6


Key factors: • Sluggish US recovery • Fuel price risk • Corporate consolidation • Seasonal flexibility


1.6 1.0




(1.1) (1.8)





Source: Official Airline Guide, 2010-2012









Airline business models have adapted to market and competitive conditions  Legacy network  Legacy point-to-point  New model LCC  New model ULCC  Regional feeder  Regional at risk  Tour operator  ACMI lift providers


Airline common denominators in the current U.S. market environment Concentration and/or partnership Specialized business models Fleet and route rationalization Revenue management Risk aversion Profit (not market share)


NYC’s “Big 3”: Domestic seat capacity is recovering, but unevenly

Source: Official Airline Guide 10

NYC’s “Big 3”: International seat capacity is rising at JFK

Source: Official Airline Guide 11

Upstate’s “Big 4”: Less capacity, even as regional economies grow

Source: Official Airline Guide 12

Regional airports are steady, but some are growing (i.e. Plattsburgh and Elmira)

Source: Official Airline Guide 13

Passengers chasing seats‌  Airlines have the seats that your passengers want: So how do you get them?


Passengers chasing seats…  Airlines have the seats that your passengers want: So how do you get them?  Understand your market, your competition and the industry dynamics impacting your situation  Educate airlines about how your airport relates to their market opportunities  Match market opportunities to carriers through compelling business cases for their business models  Maximize regional stakeholder involvement and support that is led and coordinated by the airport  Have a strategy that is balanced: realistic, aggressive and proactive 15

Thank You!

Profile for Leah Dupuis

Passengers Chasing Seats - Air Service in New York State  

Presentation by Barney Parrella at the NYAMA Annual Conference, September 20, 2012

Passengers Chasing Seats - Air Service in New York State  

Presentation by Barney Parrella at the NYAMA Annual Conference, September 20, 2012