Routes Americas 2021: Airport Heavyweights – Philadelphia, Aerodom, Lima, and SEA Milan
The Routes Americas 2021 conference heard from four leading airports on how they have embraced transformation to future-proof their businesses and helped to create a stronger, more resilient industry in the long-term.
The discussion was moderated by David Appleby, Director Latin America and the Caribbean, ASM Global Route Development, with panellists including Andrea Tucci, Vice President Aviation Business Development, SEA Milan Airports; Alvaro Leite, Chief Commercial Officer, Aeropuertos Dominicanos Siglo XXI (Aerodom); Norbert Onkelbach, Chief Commercial Officer, Lima Airport; and Stephanie Wear, Director of Air Service Development and Cargo Services, Philadelphia International Airport (PHL).
Philadelphia International Airport: restructured incentive programme
Philadelphia International Airport’s most recent official report for April shows traffic down 29%. “We are recovering, but not recovered,” said Stephanie Wear, Director of Air Service Development and Cargo Services, Philadelphia International Airport (PHL). “When we look at those numbers, domestic traffic has rebounded very quickly due primarily to strong O&D leisure demand and VFR. Business traffic is still slow to come back, and our international traffic is down significantly.”
In order to fully recover, PHL need borders to open and its transatlantic programme back up and running. “Part of our domestic capacity relies on connecting traffic to Europe and the UK,” Wear explained.
Collaboration with airline partners has intensified. Wear noted that business development has changed and PHL is providing data to the airlines to help them identify new opportunities. Indeed, the airport was the first in the US to develop a COVID-specific recovery incentive plan. “We lost all of our foreign flag carriers and we realised this was tough,” said Wear. “So, we restructured our incentive programme to help attract all the carriers we had lost. We knew that while there was uncertainty, and border restrictions, the business case was going to be tough. So, we went to a model where we allowed them to be a new entrant again, because they hadn’t operated for several months, and we waived their landing fees in the spirit of partnership. The incentive programme has been quite successful, and the carriers have been very happy because they understand the theory behind it.”
Aerodom: “in all crises there are opportunities”
Aerodom manages six airports in the Dominican Republic, with the leisure airports remaining the most affected by border closures, particularly in Canada. “Canada is our biggest client in both Puerto Plata and Samaná, so traffic is -50% in Puerto Plata and even lower in Samaná,” explained Alvaro Leite, Chief Commercial Officer, Aeropuertos Dominicanos Siglo XXI (Aerodom). “In Santo Domingo, traffic is more resilient with VFR, business and leisure traffic. We are this month at -10% compared to 2019, which is fantastic. Overall Aerodom is -30-35%.”
A lot has changed since July 2020 when the airports reopened again after four months. Leite noted that dwell time has increased substantially, there are no meeters and greeters coming to the airports, and travellers’ temperature is measured.
Aerodom does its own route development and the business development team has been looking a data in a different way to spot new opportunities. “In all crises there are opportunities,” Leite added. “United Airlines has successfully launched from Washington DC to Santo Domingo, for example, and we now have three flights to Puerto Plata from Poland.”
Lima Airport: engaging with airline partners
Lima Airport handled 23 million passengers in 2019 and the market share of its home carrier LATAM Airlines was about 50%. “Last year we had seven million passengers and we are heavily restricted due to the health protocols in our terminals,” said Norbert Onkelbach, Chief Commercial Officer, Lima Airport. “This year, to the end of May, we had 2.9 million passengers. We are operating in an environment of significant uncertainty. It’s very difficult for us to predict the winter season timetable.”
The airport was closed for four months between March and July 2020 under the country’s state of emergency. Nevertheless, Lima Airport is committed to building the planned new terminal and runway, and work on those projects continued.
“We need to engage with the airlines,” Onkelbach explained. “80% of our traffic is delivered by three or four carriers. LATAM has a majority share of more than 50%. So, 20% of traffic is done by 20 airlines. We need to look at the client base and how they are planning their fleets, while speaking with the airlines to understand what they need from a capacity perspective.”
SEA Milan Airports: COVID test flights
SEA Milan Airports manages Malpensa (Milan’s international gateway) and Linate (the city airport). The two airports handled a combined 36 million passengers in 2019, which Andrea Tucci, Vice President Aviation Business Development, SEA Milan Airports, described as a very good year. “We are just recovering 33% of 2019 passenger traffic, while cargo is overperforming compared with 2019. Drivers of the recovery are the travel restrictions – where restrictions are waived, we see traffic moving.”
SEA Milan Airports was able to launch, with the Italian Government, COVID test flights. This meant inbound travellers could avoid quarantine under certain safety protocols put in place by the airlines and airports.
“What we look to is how vaccination campaigns will proceed,” said Tucci. “We expect Asia to recover in summer 2022, while we expect, if there are no surprises, that north Atlantic traffic will recover during the next winter season. We are optimistic, as in Italy the vaccination campaign is proceeding very well.”