The annual Routes network development event is as good a place as any to gauge the state of the industry and find out who is planning to fly where and when over the coming year
The rise and rise of the low-cost sector and the emergence of new long-haul markets were once again the hot topics at this year’s Routes, held in Copenhagen in late September.
Today, extending the route map increasingly puts the spotlight on the airline-airport relationship. The emergence of secondary airports in particular has added some spice to route negotiations, and has put pressure on airports to present competitive packages to airlines, which now have more choice than they did, say, 10 years ago. The relationship is far from being one way, however, as the airline industry is also increasing in scale at an aggressive rate. That has put a strain on capacity, so carriers often have to be creative when it comes to airport selection.
Compared with just five years ago, Routes and other similar events have expanded and are notable for the sheer numbers of airlines and airports represented, with every corner of the globe seemingly looking for visitors, matched by numerous carriers, many of them mere fledglings, looking for regions to fly to. Events like Routes show that there is clear evidence, if it ever were needed, that there is more to this industry than just hubs and major carriers.
All this is reflected by the scale of the event, with 1,700 delegates in attendance, including around 300 airlines and 600 airports. Routes managing director Mike Howarth attributes the strong growth in part to the evolution of the industry and the increasing importance of partnerships between airlines and airports. “Now the whole airline-airport relationship is becoming the driving force of route development,” he said.
If there were any grumbles, they seemed to come from airline delegates who, perhaps, had seen one too many one-size-fits-all Powerpoint presentations from airports and were looking for a more tailored approach.
This is certainly the case with European charter carrier Thomas Cook. Shaun Monnery, the group’s director of leasing activities (which also encompasses route development) told delegates: “Sometimes airports come to us, but they don’t know who we are or what we do. At that point we get a disconnect.”
In particular, he said that airports need to gain a better understanding of the importance of seasonality to the charter industry, and realise the advantages of connectivity are not particularly important in this sector. Instead, the key concerns are issues such as transport links to resorts, hotel occupancy levels and activities.
As the event is designed around airport-airline meetings, there is usually little in the way of big announcements, although there will undoubtedly be plenty of new routes announced over the next year or so that will develop from the estimated 22,000 meetings that took place in Copenhagen.
There was however, plenty to talk about – particularly in the big two growth markets, low cost and Asia. The Airports Authority of India (AAI) told delegates that it was “on the job” in its quest to add urgently needed capacity to cater for the surge in demand from airlines at Delhi and Mumbai airports.
“We never anticipated this tremendous growth – suddenly aircraft numbers are increasing very rapidly,” said R J Treasuryvala, executive director of the AAI. India has seen a rapid boom in the low-cost sector over the past year, while a string of liberalised air service agreements are leading to big increases in international traffic.
In the short term, AAI is building new taxiways, including rapid exit taxiways, and 26 new aircraft stands across both Delhi and Mumbai airports. “Indian carriers believe these short-term recovery measures are essential,” said an Indian airline delegate. In the longer term, the AAI is interested in privatising the two airports (see related story on page 24), while new airports are planned for Bangalore and Hyderabad by 2008. Asian airports too were prominent in the exhibition hall, and most had similar tales of the battle to keep pace with rising capacity.
Chinese airports were much in demand. Guangzhou Baiyun International, attending Routes for the second time, had 30 meetings scheduled for the event, and was hoping to convert at least 10 of these into firm commitments. The airport was talking to carriers such as Aeroflot, Air New Zealand, bmi, Emirates, Iberia, Malaysian Airlines and Virgin Atlantic.
Beijing is more established than Guangzhou, but also had a busy schedule, with 25 airline meetings. The airport is already served by 49 international airlines, but most of these are in the USA and Europe. Beijing was looking to widen its geographical spread and the carriers it held discussions with included Aeromexico and Sri Lankan Airways, as well as airlines from the Middle East. Some see signs of seasonality appearing in the Chinese market, with one airline delegate saying that there were signs of a north-to-south flow in the winter months.
Elsewhere at the show, the easyJet and Ryanair network planning teams were prominent. Both were seen on the Marseilles airport stand – which is confident that one of the two low-cost carriers will set up a base at the French airport in the near future. The Marseilles stand was divided into a relatively spartan low-cost section and a full service area with bar, advertising the fact that it is building a budget terminal.
Routes is also a good place to see the shape of things to come, and there were plenty of start-ups vying for attention. Teen tycoon Martin Halstead was one of those. Halstead is setting up his own UK-based regional carrier, Alpha One Airways, and had a constant stream of airports queuing up to talk to the 19-year old. “People seem nervous of my age, particularly at first,” said Halstead. “But as soon as we start to talk they realise that we are doing this properly.”
If in 20 years’ time he is addressing the IATA annual general meeting as the next Richard Branson, Halstead will be able to look back to Routes 2005 as the even where it all began.
Low-cost cargo plan
The New Airline Hall at Routes included what is claimed to be the first low-cost cargo carrier, named Freshline. The carrier is planning to fly perishable goods from Africa and the Middle East into Frankfurt Hahn. Freshline, which is looking to operate Airbus A310s, aims to achieve utilisation rates of 450 hours a month, compared with the standard 150-250 hours for cargo carriers. The hall also included another German start-up, Hanseflug, looking to start direct services from Hanover to North America.
Asia needs more airports
Air transport in Asia is being held back by a lack of secondary airports, warns the Pacific Air Travel Association. The organisation’s regional director for the Pacific, Chris Flynn, told Routes: “If you look at the south of France, there is a large choice of airports, but in much of Asia only the capital cities have international airports.”
Eurojet aims for 2006 launch
The former managing director of UK charter carrier AV8air was at Routes to talk to airports in North America and the Middle East. Michael O’Donovan is still in the process of raising capital for his new venture Eurojet, but hopes to start operations next summer from the London area.
Albania’s Tirana airport was at Routes to promote its new terminal, due to open in 2007. The airport is undergoing a massive transformation under the ownership of a consortium led by German construction giant Hochtief. The airport, which handled 650,000 passengers in 2004, is growing at an average monthly rate of 35% this year.
Europeans take the honours
European airports won all the main prizes at the Routes Airport Marketing Awards. German airports took two prizes, with Munich winning in the 25-million-passengers-plus category, and Berlin winning the less-than-5-million prize. Athens International won the 10- to 25-million-passengers award, while the UK’s Birmingham International scooped the prize in the 5- to 10-million-passengers category. Next year’s Routes will be held in Dubai from 17-19 September 2006.