1 AIRDEV 2012 Conference The Airport Business in a Competitive Environment Edgar Jimenez, João Claro, Jorge Pinho de Sousa INESC Porto Faculdade de Engenharia, Universidade do Porto MIT Portugal Lisbon, April 19, 2012 FCT scholarship SFRH / BD / 51128 / 2010
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AIRDEV 2012 Conference
The Airport Business in a Competitive Environment
Edgar Jimenez, João Claro, Jorge Pinho de SousaINESC Porto
Faculdade de Engenharia, Universidade do PortoMIT Portugal
Lisbon, April 19, 2012
FCT scholarship SFRH / BD / 51128 / 2010
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Beauvais-Tillé airport (BVA) – Terminal 2 arrivalsIn 2011, BVA handled over 3.5 million passengers
_Motivation
Competition
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Athens airport (ATH) – Operations control centreThe relevance of non-aeronautical activities only increases complexity
_Motivation
Complexity
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How can airports do better?
_Motivation
Opportunity
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Outline
1.The trend-breakers
2.The airport customers
3.The competitive environment
4.The airport business
5.The strategies
6.Final remarks
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1· The trend-breakers
_Trend-breakers
Liberalisation
Competitionbetweenairlines
Airportownership
LCCgrowth
Freedomof choice
Non-aeronauticalrevenue
Low-costairports
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2· The airport customers Airports have evolved from infrastructure providers to
commercial multi-service firms.
An airport-airline-passenger chain is no longer valid to define the customers of such firm.
Our proposition:
Special group: Non-user stakeholders
Trend-breakers>Customers
Aviationtrade Individuals Commercial
trade
Air side Land side
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2· The airport customers
Aviation tradeCommercial airlinesGeneral aviationTravel agents and tour operators
Individuals
PassengersVisitorsLocal residentsEmployees
Commercial trade
Tenants and concessionaires (business partners)Local and global businesses and institutionsOther airports
Non-user stakeholders
National/regional/local governmentsTourism promotersRegional/local development associationsRegional/local commercial associations
Trend-breakers>Customers
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3· The competitive environment
Trend-breakers>Customers>Competition
When you look at an ordinary map you think there’s no more airports, in actual fact the place is absolutely awash with airports.Michael O'Leary, Chief Executive, Ryanairin “No Frills” by Simon Calder (p. 110)
The OpenFlights Airports Database as of January 2012www.openflights.org
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3· The competitive environment
Trend-breakers>Customers>Competition
European airports that had a direct passenger commercial flight from OPO, LIS or FAO between 2001 and 2010.
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3· The competitive environment
Trend-breakers>Customers>Competition
Provision of services to airlines Hub Traffic node Airline station Airline base
Examples Philadelphia vs. Pittsburgh:
US Airways shifted hub Lisbon vs. ?:
TAP privatisation New European destination:
For an Asian/Middle East carrier Lisbon vs. Rest of Europe:
easyJet new base
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3· The competitive environment
Trend-breakers>Customers>Competition
Provision of services to airlines Network provision (air and land) Access to low fares Airport convenience (location,
services, “easy of use”, bypass)
Examples Porto vs. Vigo Brussels/National vs. Brussels
South Charleroi Porto vs. Lisbon London/Gatwick vs. London/
Stansted London/City vs. London/xxx
Traffic: Outbound (catchment area)
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3· The competitive environment
Trend-breakers>Customers>Competition
Provision of services to airlines Congestion/Expansion Airport convenience (loyalty,
location/detour, services) Low travel cost
Examples Frankfurt vs. Paris/CDG vs.
Amsterdam vs. London/Heathrow All above vs. Dubai All above vs. London/Stansted vs.
London/Luton vs. Frankfurt/Hahnvs. Paris/Beauvais...
Traffic: Outbound (catchment area)
Traffic: Transfer
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3· The competitive environment
Trend-breakers>Customers>Competition
Provision of services to airlines
Tourism attractiveness Airport services and activities Hinterland development
Examples Faro vs. Palma de Mallorca vs.
Casablanca But also Faro vs. Geneva! Vancouver airport Zurich “The Circle” vs. Frankfurt
Airport City
Traffic: Outbound (catchment area)
Traffic: Transfer
Traffic: Inbound (destination)
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3· The competitive environment
Trend-breakers>Customers>Competition
Provision of services to airlines
Consultancy Management or acquisition of
other airports Management of terminals
or retail areas in other airports
Examples Airport companies Airport – airline “alliances” Property developers Other transport companies
Traffic: Outbound (catchment area)
Traffic: Transfer
Traffic: Inbound (destination)
Global competition
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3· The competitive environment
Trend-breakers>Customers>Competition
Provision of services to airlines
Access to grants Tax reductions Incentives Private investments