Airport Marketing Hide & Seek

Working in aviation marketing on CheckIn.com and recently on research related to airline route development, it makes me mad to see how

airports mismanage their data

Passenger Statistics

I think this time we got the numbers right … we just don’t know which ones to use.

For more than 10 % of the airports, using two main sources for data (airport, Wikipedia) and cross checking with the industry source, the ANNA.aero “databases” (Excel files, not “data sources) the data does not compute! So we spend an awful amount of time not just collecting that data, mostly from complicated pages that we have to manually scan, but the data we get, proves then to be “approximate” on core numbers like “passengers” handled by the airports. As reported before, ANNA.aero disqualified for us for anything but a cross-check, once we learned that even within their Excel files, the sum of the months does not necessarily compute to the given annual total… The same we found true on the “usual suspect” sources.

Asking the airports for their last passenger numbers, many cannot give them on a monthly basis, many give us numbers that are obviously wrong but most don’t even bother to answer. Where we get numbers, often they are a table in a Word document or an e-Mail, often in a PDF where if you try to copy that very table to a spreadsheet, it comes out as unformatted text, causing more work. Not to talk about image-files, where you must extract them, writing them off that image… With more than 600 airports we happen to have on file at CheckIn.com, that is no fun, that is frustrating.

Know your numbers? Not an issue at airports. Digital? Naaw, why bother?

Landing & Handling Fees

Every landing you walk away from is a good one

The last months, we approached airports under route planning constraints, asking them for a given aircraft type and load (giving also MTOW and seats) for the cost for the landing and handling at their airport. As we did not find their Standard Ground Handling Agreement and fees online. Maybe we missed to find it, but excuse me, is that our problem? Where we found them, they are often outdated (more than three years old), headlining the year of validity, so factual outdated.

Out of 63, only a good dozen replied within three weeks. Out of those replies, only five responses where useful. Five. The others responded sending us their files, often only landing or handling, frequently not both. Only some of those warned us, referring us to the ground handling companies.

Excuse me? We ask an average cost. Even your ground handlers have an average handling cost. You don’t know? So what do you sell me?

That route planning friend I referred to in my December post (promoted Jan 1st) just told me this week, he doesn’t have faith in airport marketing. Only very few would do their job right and focus on facts. Most would focus on fiction. And he reminded me of my December post and Erfurt.

Airport Marketing – Fact of Fiction?

“Wow, I had FIVE super discussions today…” “Don’t worry, I’ve not sold anything either…!”

Honestly, I have no idea. I had faith in my fellow marketing colleagues at airports. But most what I get is “dreamlands”. Digging into the numbers, you find black holes the size of a galaxy. You find logical mistakes. What you don’t find is the numbers you need as an airline. Guesswork. Ideas. Biased ideas at that. Brings me back to my friend. He confirmed, even with their established, substantial size, they had the same problem with airport fees, keep having them with about any new airport they consider flying to. That’s why one day they have to send someone there and inquire on-site. Bug them until the numbers are on the table. And usually he says: “Usually, that takes too much time”.

Are we living in a digital world? We may. Airports still mostly does not.

My friend told me: This is why Routes is such a success. Because you still need to talk to the airports to get what you need. No, they do not provide that on their website. No, they do not understand how to provide data (spread sheet, not Word, PDF or a fancy “image”). Not ANNA.aero, Route Shop or Routes Exchange, where he confirmed to me, he does not find any facts but fancy “marketing” without foundation. Our comparison we did for him of our catchment area findings compared to those sources he said proved most valuable to him – internally and externally. If they don’t even use a free service like ours to compare and qualify their guesstimates, if they cannot respond to the offset, how to trust any figures they provide you?

He calls TheRouteShop and Routes Online the “big show-off stages” (on- and offline). He says, his and his team’s main function is to look behind that show-off, to find out where it’s trustworthy facts and where an empty hull. Assess the risk. “Their job should be to provide us the facts to make sound decisions. All they do is adding smoke screens and to boast.”

Strategic Directions?

Food for Thought…
Comments welcome!

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Polar Vortex + Collaboration

Sure, now that North America again suffers from extreme winter, experts arguing if it’s another “Polar Vortex”, there is some background on Business Insider. Fact is, it hit North America hard again, causing major flight disruptions, not only in the North, but also “down South”. Suddenly I experience a surge of interest in “Deicing Management”.

The major issue I am asked is how to keep the airport operational, whereas that is the wrong approach. You can’t fight Mother Nature, not even Mr. President can, no matter how god-like he believes to be. You can manage the repercussions. You can minimize the impact, optimize the handling to recover quickly from an airport closure.

This must be more seen on a collaborative approach and I just thought to come back to the typical questions once again, as they reappear these days. If you’re interested, there are quite some posts on this blog addressing disruption management or A-CDM.

No, there is no “quick panacea” for this. Any deicing manager should be able to tell you that you cannot change a running winter operation, you implement the changes outside the season, train your staff and improve the processes. Listen to them!

A common question is: “Which software tool?”

Clear as can be, there is no “software panacea” either. In North America, the closest thing in my experience is Saab-Sensis Aerobahn. In most cases of who’s asking, it simply is overkill. First step is to start to collaborate. Deicing is not an issue of the ground handler, or the airline, or the airport, but the ground handler, the airline and the airport. All together. If you don’t collaborate, the tools don’t help you. If your processes are “stand alone” and not integrated into a master process “turn around”, using a software does not help you. There are tools that work that can help you improve your processes, but most my inquiries end here. For some reason, airport (and airline) managers seem to believe (almost a religious faith) that they need software to solve their problems. It is hard to explain that they need to “think”, that it might be more reasonable to invest into a consulting, sitting together, looking at the processes, talking to the stakeholders and in a proper process start the transformation to collaborative decision making, starting potentially with deicing.

Another common question: “But this only works on large airports?”

Yes and no. The large airports are usually more bureaucratic, have developed “structures”, or more accurately “silo structures”. Where on small airports there is a natural collaboration as people have multiple functions and small hierarchies, the large airports have departments that tend to separate themselves from the larger good. Exaggerating, each department is the only valuable, the only one understanding, the hub of the(ir limited) universe. The other departments only interfere and make things difficult. That silo thinking is more common the larger the company. But also small airports have the possibility to establish a collaborative approach. They might not even need software to do that…? Software can overcome the workers reluctance to share information by doing it for them. And speeding up data exchange instead of waiting that someone shares an information. As we discussed in the LinkedIn group CDM@airport many times, A-CDM is not about technology, but about collaboration. That is people first. The technology is a tool.

Aircraft Rotations, Winter Operations and Forecasting

In the discussions, I keep emphasizing to look beyond the individual airport and think about the airlines involved. Their flights get delayed or worse, they get stuck. Bad enough at the airport, the aircraft is expected to fly to more than one city. In 2014, JetBlue had to cancel all flights for a day to “reset” the network, bring aircraft and crews where they were supposed to be (and give the crews the legally required rest). Thousands of travelers were stranded during the 2014 Polar Vortex disruptions. The same year, I discussed with Zürich about the possibility to proactively inform the airlines about the delay forecast, enabling them to cancel a flight to Zürich to avoid it getting stuck there. It lead to the hen-egg issue, if then enough airlines cancel their flights, there would be no delay…? An idea was a penalty/bonus-system, giving an airline that helps avoiding a delay situation today a priority on their departure tomorrow. The idea was disqualified implying the airlines’ inability to understand and agree on the concept…

Just some more

Food for Thought
Comments welcome

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The Bias of Route Viability Analyses

The last months we worked with two regional airport operators on a route viability analysis both airports see as a exceptionally promising: Saarbrücken (SCN) to Reggio Calabria (REG).

Their problem is that it is rather difficult to get the hard-facts on it. Based on our work with CheckIn.com, they thought we might be the right people to look into this.

At first, talking to airline network planners, I was referred to the analysis tool providers. Though interesting, I got the “results” from four of those tools, three “disqualifying” the route, the third one (more correctly) failing with the information of insufficient data. The problem is, that the route in question has never been served before. There are some “comparable” routes, we found the two tools returning results used, from airports in the vicinity of Saarbrücken to Catania (CTA) on Sicily or to Lamezia Terme (SUF) in Calabria.
Then we were referred to the ACI “standard” QSI (Quality Service Indicator), specifying how a route potential is being calculated. There is a very nice introduction to QSI on the website of the North American chapter of ACI Airports Council International. But if you read that introduction, you are going to get very quickly to “factors” and “coefficients”. And that they are variables, subject to interpretation and weighting, they are “relative values”. And while I found my usually very open sources at IATA, OAG and FlightGlobal distinctly tight-lipped, when I called and asked about QSI, they quickly confirmed that their tool follows those principles and how much and why their tool is better than their competitors.

One airline network planning director clearly told me those tools they use, but they are useful only on existing (or to some extend historically existing) routes. As he had provided me his initial impression on that route, I questioned his initial response and he confirmed that they use those tools with an “almost religious” faith. So if they look into a new route, knowing their tools to have a bias towards existing routes, if their tool returns “not viable”, it builds a major obstacle to get them to look into such route.

So we also had a look ourselves into the “route data”, getting statistical data from those other routes from Eurostat (avia_par), the airports, two of the tool providers, as well as three airlines. As discussed in The Numbers Game, we once more were confronted with conflicting data. Public data on Eurostat shows different numbers for outgoing HHN-SUF compared to incoming SUF-HHN. All numbers “close by”, but in most cases, the numbers did not correspond to the other sources! So what “quality” do we talk, if we in a single industry cannot agree to a fixed value?

Okay, so we decided we take the average of the different values we received. Then we compared to the various catchment areas from our CheckIn.com analyses, both the pure isochrone-populations as well as our competitive analysis. Where we found once more that the drive-time zones themselves resulted in major offsets, rendering any attempt to interpret the results as useless. On the competitive reach, we found some “trends”, though it showed clearly that the more routes an airport has, the more choice such is given to the traveler, the lower the average choice of a traveler for a specific route. But even with those constraints, looking at the catchment area confirmed potential interest in the route.

More interesting, I found that aside of Eurowings with about 75-80% load factor on their flights, all other airlines operated with load factors of around 80-85% and up to 90% on an annual basis. Such, it seems that overall, there is very high demand for travel between the regions. But the tools disqualify flights. Hmm.

Working on a viability study, other approaches are to look at the regional demand. Where we got confirmed, what we knew before. There are no reasonable statistics on a regional level. Yes, you get all the statistics on a small scale from Saarbrücken to Italy. Or from Reggio Calabria to Germany. Okay on Luxemburg. But is Italy Northern Italy with higher purchasing power, commerce and industry? Or Calabria? Is Germany Munich, Berlin, Hamburg, Düsseldorf, Stuttgart, Frankfurt – or Saarland or Saarbrücken? You. Got. To. Be. Kidding. Me.

So yes, we can see how much of the industry is where (percentages), how many “Italians” live in the Saarbrücken region, but without there local research (they have done), we could not know that their “Italians” are mostly from not just Calabria (state) but Reggio Calabria (city)… Whereas we talk about many “2nd generation”, having German passports, not showing up in those “statistics”.

So yes, we did the numbers crunching, but those numbers are to be taking with a big grain of salt. Discussing this with my friend, that afore-mentioned airline network planning director, I could “see” his smile. “You check some basics, to get a feeling and have some numbers to confront the [Powers-That-Be, PTBs] in those regions with. Then you travel there and confront them and learn that all you learned is useless and why. Then you talk to the PTBs and learn if and why they believe it makes sense, you question them from your experience and then you decide if it makes sense to take the risk and fly – or not.” And he referred to my 2012 post on the Crystal Ball and told me that he liked my conclusion in it: “I take a big long stick and grope in the dark. It requires expertise, experience and good guesswork to do something with all that information you get. Good luck is part of the business.”

Not Paid! I keep recommending Connect° from conviction.

Hmmm… It confirms what I recently told the Minister President of Thuringia, discussing on Facebook about population emigration they suffer. Emphasizing the need to better support the airport to attract incoming business and the necessity for scheduled flights, I told him, it is not the airport acquiring airlines, it is the region. As soon as an airline network planner researches Erfurt and finds all the negative buzz about that small airport there, if they hear the PTBs having promoted bus service from Frankfurt when they had a flight connecting them to Munich, when they learn that the state officials and commercial (state-paid) delegations traveled from Berlin or Frankfurt instead, they understand that the people in the region do not support flight services. They’ll look at the story behind the closure of Altenburg. Then they likely look for locations where the PTBs support flights. Politicians, local industry, tour operators, the people and the media. Discounts on landing fees are a minor factor on the cost and risk of an airline operation. (Except for Ryanair). They are an indicator, if the region is willing to support the flights. I am afraid, that Minister President did not understand that, he instantly fell back into the “airport bashing”, questioning, why in the past the airport’s subsidized flight services did not succeed. No, he did not heed my words. In fact, he was prejudiced and simply did not listen but took his “instinctive” fall-back position on “airport”.

Working with small regional airports over the past years, I know many airports heeding such words, their PTBs in strong and unquestioning support of “their” (regional) airport. Who publicly want their airport and want it to succeed. Who fight for it and take a stand in discussions for their airport. And yes, Connect or Routes Europe are places where you can meet and talk to them. Though there I also heard just recently (again) that many airlines are showing interest in the big airports only and the small have trouble getting a time slot to make their case. Where Connect° had the advantage on the small airports.

Coming back to the issue of this post. My airline friend and I discussed for several hours (thank you!). And rather at the end, he emphasized, why he invests only little time in “analyses”. Because all those analyses will promote the big buddies. They will confirm business potential on the large airports with data silos full of supporting statistics. But they will disqualify any of the small airports solely based on the fact that there are no “supportive statistics”. Following our discussion, he wrote me a very short message: “Jürgen, the game is rigged. Your catchment area stuff is the first thing I saw to give me a somewhat unbiased view on smaller airports in years. Those [other] analysis tools are sold to sell us statistics. Stupid network planners and the ones trying to play it safe and by the books, requesting the QSI. It’s why mostly the small airlines, who can’t afford those tools start new routes.” And why he emphasized to me that he and anyone in his team wouldn’t bother about any route viability studies based on the statistical history of the airport, except for an indicator. “If you play it safe, you just follow the crowd.”

Food for Thought
Comments welcome

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Route Financing

Discussing Routes conferences, I recently appreciated several discussions about the imbalance of route financing in Europe. In the discussion, we boiled it down to a simple question:

Who Takes the Risk?

Image courtesy The Economist
Image courtesy The Economist

As we all know, airlines struggle to make money. Which I personally believe is a house-made problem. The use of legacy systems, legacy distribution models make the legacy carriers operate on a cost per seat that’s no longer competitive. In the 70s, a cheap return flight Frankfurt-New York was 2.500 German Marks, about 1.300 Euros. That was 40 years ago. Today the cheap flights sell for below 400 Euros. Return! So the revenue melted away. The cost for aircraft and seats got cheaper too with bigger aircraft. The fixed cost of the flight divided by seats. But that’s another story.

So who are the players in the game.

  • The Airline
  • The Airport
  • The Traveler
  • The Region
Image source
Image source

Let us look at my example I keep using consulting airlines and airports about new routes. At Join! we usually start discussing new routes with airports and quickly learn day in / day out: Everyone wants new Routes, the analyses supporting the case are mostly biased, it all looks sunny-shiny, but no, they don’t want to take the risk. In EU-Europe, they are often not even allowed to take the risk. How stupid is that?

So we usually approach the chamber of commerce, state development agencies and such asking for concrete demand for the routes the airport asks for. All we usually get is some wishful thinking. This company wants flights there? How many seats a year? 4-6… You got to be kidding me…? When we tell them the simple maths, they frequently retreat and have no answer.

The Maths?

Alex Simon was the only passenger aboard and loved it...
Alex Simon was the only passenger aboard and sure loved it… (Picture courtesy Welt.de)

An A319 has 124 seats. At 80% average load (which is low nowadays), we talk about 96 seats. Which have to sell out and inbound. At four flight pairs a day (five to six weekdays, two to four on weekends), we talk about eight legs in average (more is better). At 365 days, we talk about 280 thousand passengers the aircraft should fly every year. Let’s take out some maintenance, but we still get to a target of 250 thousand passengers. For each daily return flight, we talk about 200 seats target. For a double daily, double that.

The A320 or 737-800 is around 189 seats, so roughly 50% more.

From Southwest Airlines - Culture, Values & Operating Practices
From Southwest Airlines – Culture, Values & Operating Practices

Keep in mind there are disruptions. Less frequently on the technical side, the aircraft makers understand the cost involved in a technical grounding. But the airline has to have resources to survive such groundings. But we also talk about weather related flight cancellations. Flights remaining empty for the one or other reasons. Days people tend not to fly (religious holidays), fluctuation in demand… We talk about delays made worse by passenger compensations required by law. The disappearance of interline agreements allowing for involuntary rerouting of the passengers, not to talk about regional routes where the flight might be the only choice.

The cost of aircraft, crew, kerosene, insurance, distribution, maintenance etc. pp. being calculated, adding the “taxes and fees” on top, you talk about a cost per seat per leg at 80% load factor as somewhere between 70 and 100 Euro. On a 99 Euro return fare on the Erfurt-Munich flight in 2010, Cirrus Airlines after taxes and fees had less than seven Euros.

Risk Scenarios

The airports are restricted in what they can do, usually to discounts on the local fees. So the classic:

adding some small change...
adding some small change…

The Airline Takes the Risk. The very common approach. Yes, we give you discount on the landing fees. A drop on a (very) hot stone.

Guaranteed Load. Classically the field of tour operators, purchasing a fixed number of seats on the flights. Works very well in high season, but in the past two decades, the number of flights where the tour operator charters the aircraft became negligible. Even in that market, most flights are “set up” by the airline and then marketed to a number of tour operators. Once the shit hits the fan, as recently i.e. in Turkey, the tour operators cancel their seat allocations leaving the airline suddenly with unfilled air planes. But the aircraft is still there, it costs money!
A similar approach is to get such guaranteed seats from corporate clients, though they usually demand “lowest fare” for the guarantee at “last seat guarantee”, adding difficulty on the pricing games the airline can play. So a good airline sales makes sure to keep the flexibility. We discussed the purchase of (virtual) ticket stock at cost per seat + X, but very few of the corporations demanding a specific route then come up and commit. So we’re back to the airline taking the risk.

So in reality, we can (and have to) look at realistic scenarios.

Who Benefits?

“What are the facts? Again and again and again-what are the facts? Shun wishful thinking, ignore divine revelation, forget what “the stars foretell,” avoid opinion, care not what the neighbors think, never mind the unguessable “verdict of history”–what are the facts, and to how many decimal places? You pilot always into an unknown future; facts are your single clue. Get the facts!” [Lazarus Long]

And even with all the facts, navigating the future is a risk. Get what you can in the best quality. The better and unbiased the data, the less your risk!

Permanent Subsidies

If you know me, I am no fan of subsidies. You got to understand who benefits and to what extend. Get the maths down. then invest.

On the other side, there may be reason for permanent “subsidies” by the region flown from and to. As they benefit from better flight connections, from tourists, business travelers, commerce, taxes. Why is it that I keep asking if anyone has some sound research to share about the impact of a new flight to the economy? Why are the state development agencies “in need” but unable to qualify that impact to their economy? I am still convinced airports like Erfurt-Weimar, Lübeck or Kassel need scheduled services to be connected to the global aviation networks. Not to the nearby hubs that they can reach easily with rail or car. But studies exist that confirm that beyond four hours drive time a flight makes sense.

Temporary Investment

Risk Sharing

Who benefits?

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Delay and Disruption Management

[edited]

Sharing the Bloomberg headline What Do You Want, Cheap Airfare or an On-Time Flight? Daniel (S.) today quoted from the article on LinkedIn:  “An ultra-low-cost carrier will never, ever try to be as punctual as a big legacy #airline. Being on time all or most of the time costs money.”

After an initial misunderstanding we agree: That is stupid!

Delay and disruption management are the single most important influenceable cost factors in aviation today!

Yes, we can make good aircraft deals, we use revenue management to sell out tickets as expensive as we can in the low-cost world. But operations is the single most important cost driver we can influence today. We can neglect it, like many seasoned airline and airport managers do, we can deny and ignore it. And loose money.

While doing the research at late delair for the Zurich Airport case study, focusing on the impact of a contemporary deicing management, just that improvement in (IT-supported) process saved about 20 million in one winter alone there. For Swiss (about 50% of the flights). Now working on a financial summary that thanks to the acquisition of delair by SITA never made it “to market”, I spoke with the OCC (Operations Control Center) manager of Swiss in Zurich. Who confirmed what they all knew (and know), but their management remains blissfully ignorant about: It is all about rotations in an airline. The aircraft starts somewhere in the morning and flies to different places throughout the day. And a disruption or delay anywhere en-route is prone to impact the entire rotation. Worse, a late aircraft usually accumulates more delays as ground handling is also tightly scheduled without spare manpower to cover up for such situations. Then crews fall out of schedule as they have to have their rest times. And while the airline may reduce the financial damage by calling for higher force on a snow event in the morning, on the flights down the line, I am told they tend to pay. And passenger compensation often exceeds the value of a single ticket!

In 2014 I wrote this article about Airport Operations Center (APOC), Airline Operations Control Center (OCC) and ATC’s Network Operations Center (NMOC) and how they do not communicate with each other. I asked just recently about a common airline system with decent, contemporary, f***ing basic interfaces and learned that none of my precious industry expert friends knows such. Worse, I got more feedback than I wanted about the issues all my friends in this industry can tell about; where thanks to missing such data flow, the right hand does not know what the left one is doing. In the process, trying to improve a bad situation, but working with different information, making things often enough worse.

I also heard just this week, how airline managers love the big planes (A380), a Lufthansa manager was quoted that they love the big bird, but that they don’t know if they can ever be operated long-term commercially revenue-making.  Or read a comment, how much these airline “managers” love new inflight entertainment and seats and fancy stuff. But don’t understand, why Windows-XP-machines in their OCC need replacement. It’s “fancy”, touchable, visible to see the airplane or fancy seats, but no-one sees the impact of deicing. Okay, we have a winter-delay. Who cares, we’ve calculated it into our prices forever and it’s been always like this. It can be improved? Who cares.

Source firewalkeraussies.comAnd while the airlines benefit, I hear from the airports that they do not show any interest in A-CDM and A-CDM improvements. While they cut into the flesh on most airport’s fees, while they let them starve; while most airports need to invest heavily to compensate the losses from “aircraft handling” by doing their best to increase “non-aviation revenue”, while this is daily life today, airlines demand airports to invest into those technologies and development and process improvements, but are not willing to pay. Did Swiss pay a Penny (Rappen) for the improved deicing at their home airport? Make a guess.

So while I know that seasoned managers in aviation act that stupid and short-sighted. Delay and Disruption Management is the single most important factor we can influence to save big money.

As I should have known Daniel’s opinion, i.e. from his LinkedIn article about why airlines burn money every day I keep myself referring to.

And if you need someone to discuss such projects or to manage them? Keep me in mind. And Daniel 😉

Food for Thought
Comments welcome!

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Airline Route and Base Considerations

This is a copy of the article published originally on LinkedIn.

(5. Apr. 2017) A mere three weeks ago, I was approached for a business concept for a substantial fleet of new aircraft and the intention to get them into the air this year. Coming up not with the “usual” business model to use A320/B737 and lease it to low cost airlines, but with a challenging, new (unique) business concept.

That comes along with the need to develop plans not only for the initial routes, but for an ambitious growth plan with expansion of routes and bases across Europe. Having initial interest not just from the aircraft investors group but also from the aircraft maker, I am now heading for Routes and have been asked, what I expect from the airports to bring along.

Based on my blog article My Routes Sales Pitch, I have meanwhile worked with several airports and found a very easy “challenge” to gain understanding of what the airline expects from the airport. The results of the challenge usually gains a better understanding of the airline, a sound SWOT-understanding (SWOT = internal strength and weaknesses, external opportunities and threads). The work usually ends up with a better chance to find a partner to establish the services.

The Airport Challenge

If you would have an aircraft yourself to operate from your airport. How would you utilize it?

Challenging Questions

Which routes? Do you have enough demand yourself? Or does it make sense to share the aircraft with another airport? Will you have the support from the politicians, media, industry and tourism on your side, as well as on the other (destination) side? What’s the incoming vs. outgoing, what is the seasonality? Who can you get to commit on a substantial risk share for the operations? Or is it just “good will” but no commitment?

What aircraft size do you see the business case for? Usually airports today look at low cost airlines with 150-200 seats. How does the model look with a smaller aircraft (i.e. 100 seats), what ticket prices can you sell? The price levels often do not increase in line with the sector length, so shorter sectors may be good, but they compete with ground transportation (car, bus, train). And what is the average income and the GDP in your region? Are there commercial, ethnic or cultural ties between your region and the destination? Is it more incoming or outgoing or equal split?

How is the availability qualified personnel on your local labor market? Flight crews, (line-)maintenance? How about disruptions, crew and passenger hotels? How about aircraft parking or hangar maintenance?

Make me a business case. Convince me. Or other airlines you talk to.

It’s a Trust Thing

At CheckIn.com I developed a case study about the airport “facts” on catchment areas, compared to the reality check by the CheckIn.com pan-European algorithm. It was, it is devastating. Bad enough.

Fraport Bulgaria is 230 and 250% above CheckIn.com calculations on the simple isochrones (x minutes from the airport lives y population). Their response to the facts first was rather aggressively voiced denial; “we don’t know which brochure you refer to”. And when I’ve send them photos, they accused us of incompetence; “we have sophisticated tools, our numbers are right”. We asked. We did neither get any sound explanation, nor did they even try. Nor would they provide the name of their tool or how they came to those numbers. And +200 percent is simply beyond any “drivetime variation”. My guess: Someone made a (less) educated guess about those numbers and now don’t know where they came from; but it sure has to be an unquestionable source, everything else would be heresy, right? CheckIn.com must be wrong, because Fraport Bulgaria is beyond doubt! … Would I trust them on any demand forecasting? You got to be kidding me. And I actually thought them as a possible aircraft base. Oops…? And yes, we have a lot of airlines using our data to compare and we get the very same feedback from them, why they like CheckIn.com. Oh. And CheckIn.com is open about their “Numbers Game“.

We also worked from early February to early April on the Passenger numbers of airports. We talk just 600 airports in Europe, but for more than 50% we receive different numbers from different sources. It’s not uncommon to have different numbers even from the same airport. Or the monthly numbers not summing up to what the annual number is said to be. It’s your main KPI (key performance indicator). If you don’t manage that simple value, how should I trust any other numbers you provide? (more)

We made the basic isochrones and population total together with other data available for free on CheckIn.com to overcome the airlines’ distrust in airport data and especially airport catchment data. Quite embarrassing if you think about it, ain’t it. So you better come up with a sound business case. And at least check your base data and reference your sources.

If you have a wishlist of routes to be served, I will take them as that. A wishlist. I can get them in RoutesOnline (Opportunities) and TheRouteShop (unserved routes).

Have a sound business case compiled for certain routes, I will very likely consider how they fit aircraft rotations.

Have a sound business case for an aircraft? 24/7/365? Then I am very happy to talk to you.

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The End of the Airport Passenger Fees?

Inflight Shopping

As I outlined in my summary on the Hamburg Aviation Conference, my friend Daniel expressed his believe that within 20 years, there will be no more passengers fees.
At the same time, Michael O’Leary was recently quoted that he expects in very short time they will offer the flights for free.
But flying costs money, no matter how good the aircraft engines become, terminal construction and maintenance, ground handling, air traffic control, gasoline, pilots, cabin crews, aircraft, insurance, it all needs to be paid. And no matter how effective you calculate …

… someone has to pay the bill.

Airlines lower their ticket prices, covering the “loss” with “ancillary revenues”. While those “ancillaries” have been understood as services previously bundled (inflight meal, baggage, flight insurance), they meanwhile extend quite into “inflight shopping”.

At the same time, traditionally airport landing fees, split into the landing and passengers, covered for the airports’ cost of operations and development. This basic, sensible model is now threatened. It will change. But how. When the airline and airports fight for the revenue of the passenger – I believe both will loose.

Airport Duty Free

So currently it is a fight between airport and airline for the money of the traveler. I hear airlines expressing their anger about the airports increasingly draining the pockets of the passengers pre- and post-flight. And the airports upset about architectural changes enforced by the evaporating aviation income, forcing them to add shopping in arrivals halls and rebuilding terminals for improved shopping, i.e. forcing the passenger through the duty free store. Or how to speed up the check-in process to increase the dwell time of the traveler to spend more money shopping. And the shop owners about the increasing pressure to cash in on the passenger in order to pay the expensive rental deals with the airports. And, and, and…

And no, it does not help to imply that the politicos should provide airports similar to train stations. Yes, it is true, airlines bring business to the regions. Airports are important infrastructure. But in the end … someone has to pay the bill.

Source firewalkeraussies.comWhat we will need is a serious, joint discussion about the future business model in aviation. At the moment there is no discussion. There’s the airlines, the airports and business models that cannot work. And we need to have the politicos and the usually government-controlled ATC (and border control, security, etc.), we have to have the ground handlers, the shops and all other players on the table. You can’t reconstruct all the small airports. We don’t need a fight. We got to work together for a sustainable business model. ERA, AAAE, IATA, ICAO, this is your call.

Food for Thought
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On-Time Performance and Punctuality League

Incompatible Data

Mark from OAG directed my attention this week on OAG’s Punctuality League, which they offer for free download and compiled the results in a “dashboard”, though I find that exceptionally unintuitive and more confusing than helping. FlightStats offers a similar information in tables and graphs I find far more intuitive, the On-Time Performance Awards.

Now after a quick first look, it shows already that it’s incompatible.

I just look at the first OAG graph “Top 20 Airlines by LCCs/Mainline Airlines”.

  1. Hawaiian Airlines (89.87%)
  2. Copa Airlines (88.75%)
  3. KLM (87.89%)

and compare to FlightStats, where Hawaiian neither shows in the Top 10 International Airlines nor Major Airlines (neither Mainline nor Network), but only Top 1 on Regional Airlines. KLM is 1st on International Network flights and 4th on mainline flights.

When I first encountered the FlightStats monthly statistics for airlines and airports, I’ve contacted them (with no reply) if I may add that as an indicator to our airport data. As I consider that valuable information for aviation network planners.

But as I stumble immediately over differences, it raises question. Such, it might be a good idea if OAG and FlightStats talk to each other to make sure they use the same data, and logic before they dig into detail. Or that they explain how they value the data and interpret it. As is, there are unexplained differences. Sorry, now I distrust both sources…?

Indicator. Indicator?

It can only be an indicator, as both sources fail to relate the one to the other. My first question would be to correlate the on-time performance to the hub airlines. Because it is utterly unfair to blame an airport, if their major hub airline is notoriously late.

Then one shall also keep the size of an airport and it’s congestions in mind, i.e. British Airways suffering from congestions in London-Heathrow or Thai Airways in Bangkok. Who is cause? Who is victim?

Yes, for CheckIn.com we emphasize that all that data can only be indicators. To be interpreted by an experienced network planner. Because a single new flight makes a major impact on a new or small airport, but has little statistical relevance on a major hub. Saying that, isochrones are in itself valuable statistical data and we put them into our analyses for a reason. As they are a necessity in comparison with the catchment area analysis to interpret the possible impact for a route. In forecasting, you work with indicators, you have no facts.

Big Data – Big Trouble

At the same time you work with big data, so the more data you work with, the more vital it is to get them from a sound source and have them integrated into a common system. Whereas most established data providers, be it OAG, Flight Stats, SITA, etc. have not yet  addressed that for a “good reason”. But as an industry, it is vital we add this and integration is very high on our back log at CheckIn.com of what we where we want to go!

For the time being, national statistics differ from Eurostats, differ from aviation industry statistics, differ from common sources. These differences in data you get from FlightStats and OAG just being an example that this is also an issue in aviation. Who’s right? I even have examples where the numbers figure within an airport’s own website for a given year. In order to improve, we got to tear down the walls! And yes, that’s part of what I will talk about at coming Passenger Terminal Conference & Expo in March. Will you be there? Please let us meet!

Rotational Impact

So. Why do I give these on-time-performance, no those delay statistics so much thought? Aside the cost of delays summing up to millions, they are not just a nuisance, but a problem. Because when I did that additional case study on cost savings, based on the Zurich Airport’s deicing I did for SAE G12 and WinterOps.ca, I learned an important fact from Swiss (the airline). Whereas the passengers impacted by the immediate flight understand the problem and accept higher force, the aircraft is not operating a single flight, but an entire rotation (a chain of flights) during the day/week. Any major delay has a rippling effect in the network. And if you have a snow-caused delay in the morning in Zurich, your passengers on the evening flight from the Mediterranean summer vacation will not understand and file for compensation. And the airline usually pays!

And for network planning, it is vital to know if you have to build in (expensive) buffers into your schedule, to cover up for the potential delays. That means your aircraft and especially crews are not airborne as much as they could be, such causing further loss of revenue. There is a very good reason airlines increasingly add clauses in the handling contracts with the airports punishing for creating delays and rewarding for reducing such. Being said to be an expert in winter ops planning, it’s bad enough about technical or natural (weather) delays. But yes, delays are also caused by aviation management, be it handling agent, airline operations or air traffic control.

A Summary…

So what now. I think the availability of delay statistics is compelling, useful and needed. But take them with care, as you take all statistics. Try to understand how they are computed, the logic behind and ask your provider accordingly. Yes, that includes our own. That’s why we publish the CheckIn.com methodology. Only if you understand it, you can yourself interpret it. Trust it.

We got to understand in our industry the value of data and common data structures. A delay is a delay? Nonsense. As I mentioned back three years ago in the article about A-CDM.

And I distrust any “closed source” company that does not provide me with their methodology on their analyses. Like many airports do. On the other side, at CheckIn.com, the value is not really the methodology (which is sound), it’s the work that is behind it, the compilation of data from different sources, the constant improvements we give that. Only given sound data, we can provide quality analyses. Given the quality data, anyone can come up with more or less professional analyses. Even to come up with the calculations we do to calculate an airport’s impact on a traveler’s likeliness to choose the one or other airport can be replicated. Though no, we don’t explain in detail how we do it, but the general concept. The hard work we spend every day to merge data from different sources, to cover for mistakes and other short-comings – that makes our work so hard to copy… And is a main part of our USP (Unique Selling Proposition), what makes us “unique”.

Food For Thought
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The Numbers Game

I think this time we got the numbers right ... we just don't know which ones to use.
I think this time we got the numbers right … we just don’t know which ones to use.

Talking about CheckIn.com, we have been asked many times, how we crunch our numbers. Or that our drivetimes are different from Google. Yes?

The second question is rather important, as before you crunch the numbers, you got to see what you work with. And this article on LinkedIn by Jasper Venema rang a bell last week…

So let’s talk about statistics today.

Passengers

We are in the process to add some new region to CheckIn.com and as usual, the first and foremost figure we need are the passengers. We usually use Wikipedia, but even between different Wikipedia pages, more so even between different Wikipedia languages, we find different passenger figures. Now we usually compare them with commercial data we get and guess what: There’s official sources such as ACI, IATA, national statistics, airport associations, but also commercial sources like ANNA.aero, Albatross, AEX or others and in all cases, we have – sometimes substantial – discrepancies on annual passengers per year for a(ny) given airport…

passengersSo we started to ask the airports. And get again other numbers.

We know one difference, where an airport association doesn’t use the departures and arrivals, but simply doubles the departures they get. Not very contemporary and definitely not state-of-the-art, but yes, it explains some. Jasper Venema’s article explains some other. But in numbers we don’t much care about explanations. It should be in our industries own and vital interest to use the same number for the same “item” (here “total airport passengers for a given year”). And quite honestly: If the airline has different numbers as they don’t count non-ref passengers, so be it. With most airlines not happy to give out “their” numbers for a given airport or route, the number that counts is the one the airport publishes.

Drivetimes

drivetimes

Whereas we showed long time ago, that they differ from tool to tool. And sorry, Google is neither the best, nor the most accurate of those. We compared more than 20 different tools, from our initial logistics software used by trucking companies via Google, MapPoint, Maptitude, Apple, Here, … Today we mostly use OpenStreetMaps, as we found them on the tests we did in different countries and where other tools failed, they come up with the proper calculations. Even on ferries they are mostly accurate, where Microsoft and Google still translate long-haul ferries with Zero drivetime.

We cannot consider traffic jams, temporary construction sites or detours, but found OpenStreetMap to provide lower speed defaults on highways likely overloaded. We don’t know how fast you drive, but neither do Google, Bing & Co. – we got to work with assumptions.

Start + End Points

ccom_ham_errorAnother bug we have in our backlog and work on constantly (it’s “relax work”) are the city centers. We calculate population based on the municipality. Now municipality borders are nothing really easy to use for mapping. Take the example of Hamburg. For some reason, Hamburg “owns” a part of the North Sea. Such we had to modify our boundary data for Hamburg to exclude that intentionally as it caused questions on our default example and the map to be “off Hamburg”. Then you need a “geopoint”, a given geographical point defined by latitude and longitude. For many municipalities, there is such a point defined, usually called the “admin center”. But many municipalities either have not defined such point – or it’s a (stupid) “theoretical” centroid that does not relate to streets. Where missing, the drive time takes such computed centroid too, the center of the boundary. In many cases that results in a point somewhere inaccessible by road. There it takes the spatially next road, which does not have to be easily accessible or be well connected to the main roads. Or the centroid is too far off from any road.

Airports are also prime candiates. The geopoint to be used for navigation very often is not the terminal road, but the center of the main runway. The next road might also not be near the terminal, but on the other side of the airport. As such, for each and every of the airports in our database, we defined the geopoint at the terminal or closest to the terminal. For many smaller airports, there is no street data in any of the map tools we use, as those roads are managed “privately”.

locarno
Locarno city limits

Around Lugano, we found many municipalities being located in the alps, with a town, and a lot of mountain with ski slopes. Unfortunately, without a defined city center, drive times differed substantially between a drive to the next municipalities city center defined and the one undefined. Having covered those, Lugano remains an “interesting map”, as there are also several municipalities with “exclaves”, split into different parts surrounded by other municipalities. But we can color only the complete one. So parts are in one drive time zone, others are in the next. Look at Locarno, where there is no admin center, but the centroid ended in the middle of the lake…

Helgoland has an airport, but the entire island is banned for cars. No drive times ツ

Population + Maps

European populationAnd don’t underestimate that the population for all those municipalities we have on file are not the same coming from Eurostat, national statistics offices or the towns themselves. The naming differs between those sources and there is no “common code” like we have in aviation, to uniquely identify those towns. That likely also being the cause of the +20% mistakes when using that commercial maps provider (€32K) for drive time calculations that caused us that ad hoc map change earlier this year. Little town Münster, Bavaria is not the large city Münster in Northrhine-Westphalia the commercial mapping provider returned. And is that now Münster, Bayern or Munster, Bavaria or Muenster (Lech)? Worse in France I can tell you… So we had to make sure we only use geopoints and not unreliable “names” and maintain an extensive list of “associations” to make sure we have the data properly associated – until the next update when they changed a lot again.

But worse; you can’t use Eurostat everywhere, even within the EU. With their data being outdated the day they publish them or regions like Scotland using a totally different and incompatible data model, so they publish “calculated estimates” for the wards. More guesstimates than estimates. And Europe only covers just 28 states anyway, the entire Balkan is missing, Norway, as well as most the microstates … Are the Aland Islands independent or part of Finland? Those are just examples.

And then we need to associate cartography data from the cadastre offices that is incompatible on the same year to their (own) national statistics and Eurostat. So that also goes into the number crunching. Do this for one airport is bad enough. Do it for Europe? We wouldn’t try that stunt again, now we know what we had to go through… And no, the commercial “solutions” are just as bad, so we had to do it “again” for our own database. So we use OpenStreetMap for the mapping. But for our layers, we compiled our own database of administrative boundaries, meanwhile mostly from national cadastre offices with own updates to make the maps match the population data.

Other variables

crystalballaviationplanningSo we take into account the airport size by passengers, defining (assuming) the “reach” of the airport. That’s also something variable, as in some areas there’s a lot of large airports (i.e. Germany to BeNeLux), other regions, airports are rather scarce. Spain for example has Madrid in the center and except for two minor airports all other airports are on the coast. To Bucharest a substantial number of people drive eight hours. We calculate ferry times, including standard waiting times, but what about ferries that go once a day and then you have 18 hours to wait for next days (once-daily) flight?

As I keep saying: Despite all the data we provide on flown passengers on that or similar routes, on passenger potential in the catchment area, etc., I disagree with the recent statement by Marc Gordien on his very good article on air service forecasting maths. To look into the future was, is and will be a look in the Crystal Ball. We can only minimize the risk for failure by providing (and using) the best possible data to justify our gut feeling. But considering myself a professional; when I see new bases opened by easyJet, Wizz or other airlines, I frequently find myself at a loss, would have never seen fit to justify the risk. Still, many of those routes work.

IcebergPrinciple

It gives reasons to consider the soft factors. Reputation. Ticket prices (and ancillary revenues). Frequency. Ethnicity. Commercial relations. Tourism. And many others. And my commonly used example where a regional airline opened up a route on a trice weekly basis, only just when they started making money to be cannibalized by a low cost carrier with bigger aircraft and less frequency, dumping the route in less than a year. Unfortunately, the regional carrier was gone, the route is no longer served. Data is not everything. But it helps to qualify the real cases and make sure you understand the risk taken on new routes.

BransonComplexityQuo Vadis?

Do you find something “weird” on our maps? Please let us know! There are still many mistakes and bugs and we constantly work on the database to improve the information we have. But we believe we now have a rather well working system, the bugs our users point us too are mostly either quickly corrected or (mostly) resulting from reasons beyond our control. And the results very nicely match the facts we get from other sound sources from airlines and airports to compare our results with.

We also work very hard trying to simplify our analyses, compile meaningful facts in the dashboard and provide the more complex detail on the analysis page. We discuss options to also interface the data with other tools, though currently, most of the established companies prefer to live in their silos ツ

brilliant, big (crystal) balls
brilliant, big (crystal) balls

Working with (sound) assumptions, the numbers help you to understand and qualify the potential and the risk, but there are exceptions, no matter how many work on the data to improve it. It will remain an ongoing development and ample room for improvements. And such we will gain better and better understanding of the facts. But we can’t read the minds of the decision makers: The paying passengers. We can only assume a likeliness from sound statistical analyses.

We do not replace a route analyst or airline network planner. But we polish the Crystal Ball(s) in use and provide real nicely shining and new ones to take a better look. Check it out.

Food for Thought
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Route Planning Events

aviationconferencesWhile “the world” meets at World Routes, we received inquiries, why CheckIn.com is not there.

Sure, there are “obvious” reasons, but when it boils down, you need to prioritize where your money comes from. So while World Routes is an important event, I believe in the reasoning behind the split into multiple Routes events.

World Routes for the global players, regional routes for the regional players. Whereas at Routes Europe earlier this year, the “regional focus” is blurred already, attracting “foreign” long-haul airlines. As CheckIn.com currently focuses on Europe, Routes Europe is a must go for us. So we will be in Ireland next April. As an airline client requested Russia before North America, we won’t be ready for Routes Americas in Vegas in February.
If we get North America up in time, it may make sense to look at World Routes 2017. May make sense.

Likely still not, as the focus of the event is the networking between airlines and airports. As close as we are related to the aviation network development industry, we are secondary, we are supplier. World Routes is simply too busy, too packed, to give us a lot of opportunity to promote our services. That’s much more focused and such reasonable at the smaller (and targeted) events.

ConnectAviation2017Right after Routes Americas, there’s the second (annually first) European event which we now have as a “must go” on the agenda: Connect°

Which motivated the question, why or how that event differs from Routes Europe and why I believe this is even more valuable…? The answer is rather easy. Where Routes attracts all those big shots, it is already becoming a “major player event”. Many small airports and airlines expressed towards us that they feel uncomfortable at Routes, even on the Routes Europe. Too big. Too big-focused.
Connect° and Karin Butot focus the event to the small and mid-sized players. So if you look for big traffic and big routes, go to Belfast. But if you focus on small airports, regional airlines and more local business, you’re very likely better off at Connect°.

So if you want to meet us…

22.-24. Feb 2017: Connect°, Ajaccio, Corsica, France
23.-25. Apr 2017: Routes Europe, Belfast, Ireland

Or call us to make an appointment elsewhere.

P.S.: Have you registered for CheckIn.com access? Registered users enjoy free access to basic airport data for more than 570 airports in Europe, including an isochrones map and the population in it! Free as in “no charge” and “free to use” (as is).


Food for Thought
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