FAST Future Airport STratégies INO WORKSHOP Bretigny, 1st December 2009 Contact: Isabelle laplace M3 SYSTEMS, laplace@m3systems.net 02/12/2009
STATFOR Medium-Term Forecasts Context +22% flights in Europe by 2015 on existing routes Future routes BUT Additional traffic Impacts on ATM 02/12/2009 Page 2
Context Ryanair network 1999 Ryanair network 2005 Source Low-Cost Carriers- Europe 02/12/2009 Page 3
Low-cost airlines Strong development Airport growing role Airport status Evolution toward privatisation, devolution Objective: Profit maximization Necessity to develop new strategies Impacts on the route network Important role of airport strategies for network development What are airports strategic options for the future? Which impacts of these strategies on route network, on ATM? 02/12/2009 Page 4
Project aims FAST Project objectives Developing an innovative method to Identify airports strategic options Analyse the impacts of these strategies on route network Identify basic influence (possibly consequences) on the airport air traffic management Applying this method to airport case studies 02/12/2009 Page 5
FAST project FAST Project FAST project was launched in January 2008 and ended in March 2009. Funded by Eurocontrol in the scope of CARE INO project Partners: M3 Systems: project leader Aviation Economics and Econometric Lab of ENAC University of Zilina Illustration of the methodology on airport case with elements available during the project period. Since then recent events tend to validate the results obtained 02/12/2009 Page 6
CONTEXT AND OBJECTIVES Methodology of identification of airport strategic options 02/12/2009 Page 7
Strategies Airport strategies of development Two categories of strategies: Strategy of specialization Strategy of diversification Aeronautical activities on the airport Core business of airports Strategies of specialisation Non-aeronautical activities Aeronautical related activities on other airports Non core business of airports Strategies of diversification 02/12/2009 Page 8
Specialization Strategies of specialization Investing in capacity: pax/freight terminal, runway Improving the airport accessibility: bus shuttles, etc. Developing commercial policies to airlines Investing in a low-cost terminal Investing in terminal infrastructure to improve aeronautical services efficiency (e.g. luggage transfer, pax flows, etc.) Investing in communication and marketing Developing intermodality with an high-speed rail interconnection 02/12/2009 Page 9
Diversification Strategies of diversification Developing commercial activities at the airport i.e. developing commercial areas Developing services to pax to secure their loyalty Investing in other economic sectors (e.g. Investment of Aéroport de Paris in Hub Telecom) Developing consultancy services Investing in another airport Managing other airports 02/12/2009 Page 10
Question Question How to identify the most relevant strategic options of an airport according to its type? 1. Defining an adequate typology of airport 2. Using this typology to make a first identification of the strategic options 3. Refining these strategic options with other factors (congestion level, competition level, regulation type, airport status 02/12/2009 Page 11
Question Question How to identify the most relevant strategic options of an airport according to its type? 1. Defining an adequate typology of airport 2. Using this typology to make a first identification of the strategic options 3. Refining these strategic options with other factors (congestion level, competition level, regulation type, airport status) 02/12/2009 Page 12
Typology Airport typology Based on three scales: Size Potential for growth in capacity Potential for growth in demand Both levels of potential for growth scales are broken down in low, medium and high potential levels The size scale is broken down in: Small (<5 million pax a year) Medium sized (between 5 and 10 million pax a year) Large (>10 million pax a year) 02/12/2009 Page 13
Typology Potential for growth CAPACITY HIGH MEDIUM LOW HIGH Vienna Paris CDG Lyon Prague Marseille Paris Orly DEMAND MEDIUM Bratislava Bordeaux Faro Geneva Toulouse Southampton Brno LOW Kosice Graz 02/12/2009 Page 14
Question Question How to identify the most relevant strategic options of an airport according to its type? 1. Defining an adequate typology of airport 2. Using this typology to make a first identification of the strategic options 3. Refining these strategic options with other factors (congestion level, competition level, regulation type, airport status) 02/12/2009 Page 15
Specialization by airport type POTENTIAL FOR GROWTH DEMAND HIGH MEDIUM LOW CAPACITY HIGH MEDIUM LOW - Accessibility - Commercial policies to airlines - Communication and marketing - Terminal capacity - Low-cost terminal - Runway capacity - Infrastructure efficiency (only for large airports) - Intermodality (only for large airports) - Accessibility - Commercial policies to airlines - Communication and marketing - Terminal capacity - Low-cost terminal - Runway capacity -Accessibility - Commercial policies to airlines -Communication and marketing - Accessibility - Commercial policies to airlines - Communication and marketing - Terminal capacity - Low-cost terminal - Accessibility - Commercial policies to airlines Bordeaux: Small airport Available capacity Strong competition with HST in the future Partial devolution without privatization 02/12/2009 Page 16
Strategies of diversification Potentially relevant for all airport types whatever the potential for growth more or less relevant according to the airport size (linked to the airport financial resources) Large airports Diversification by airport type Consultancy services Investments in other economic sectors Investments in other airports Small and Medium sized airports Commercial activity Services to pax Bordeaux 02/12/2009 Page 17
First identified strategies First identification of strategies for Bordeaux airport Strategies of specialisation: Accessibility Commercial policies to airlines Communication and marketing Terminal capacity increase Low-cost terminal Runway capacity increase Strategies of diversification: Commercial activity development Services to passengers 02/12/2009 Page 18
Question Question How to identify the most relevant strategic options of an airport according to its type? 1. Defining an adequate typology of airport 2. Using this typology to make a first identification of the strategic options 3. Refining these strategic options with other factors (congestion level, competition level, regulation type, airport status) 02/12/2009 Page 19
Bordeaux: strong competition with HST Refinement Accessibility Capacity - Competition + Accessibility Capacity Low-cost terminal Commercial policies Communication Confirmation of the relevancy of the first identified strategic options Commercial activities Services to pax Bordeaux: publicly owned and managed Private ownership - + and/or management Commercial activities Services to pax Consultancy services Investments in other airports Investments in other economic sectors 02/12/2009 Page 20
Future strategic options of Bordeaux airport Time scale: Up to 5-8 years Objectives: Secure the loyalty of passengers and of airlines Attract additional low-cost airlines on the platform Strategy oriented toward the quality of service: Higher quality of service in traditional terminals with development of services to passengers Lower quality of service in the low-cost terminal Bordeaux strategies Development of commercial policies to airlines (e.g. reduced fees on traffic volume or peak load pricing to increase the traffic at off-peak hours) 02/12/2009 Page 21
CONTEXT AND OBJECTIVES What is the impact of these strategic options on airport route network? 02/12/2009 Page 22
Impacts on route network Method of identification of the impacts of strategies on route networks 1. Identify strategic options of airport A 2. Identify airport B which already developed similar strategic options in the past 3. Analyse impacts of these past strategies on the route network of airport B 4. Make assumptions on the potential changes in the route network of airport A 02/12/2009 Page 23
Illustration Similarities between Marseille past strategy and Bordeaux future strategy Constraints: competition with High-Speed Train (TGV Bordeaux-Paris = 3 hours today, 2 hours in 2016) Objectives: Securing the loyalty of passengers and of airlines Attracting additional low-cost airlines on the platform Strategies: Differentiation in service quality via investments in a lowcost terminal Development of commercial policies to airlines (e.g. reduced fees on traffic volume or peak load pricing to increase the traffic at off-peak hours) 02/12/2009 Page 24
Marseille route network Routes opened by Full-Service carriers between 2003 and 2007 Routes opened by Low-Cost carriers between 2003 and 2007 02/12/2009 Page 25
Marseille route network Other impacts on the Marseille route network Strong traffic development on 8 existing European routes: traffic <5 000 pax a year in 2003 and >10 000 pax a year in 2007 6 routes to Northern Europe, 2 routes to Southern Europe Low transfer from non scheduled to scheduled traffic: 2 routes becomes mainly scheduled 3 routes remain mainly non scheduled with an increase in the scheduled traffic 02/12/2009 Page 26
Bordeaux route network? Potential changes in the Bordeaux route network Existing route network Number of routes World regions from Bordeaux in 2007 Canada 1 Northwestern Africa 4 West Africa 6 Southern Europe 35 Northern Europe 14 Total 46 Opportunities to develop additional routes? 02/12/2009 Page 27
Bordeaux route network? Potential changes in the Bordeaux route network Additional routes to northern Europe may develop in the future to: Germany Sweden Norway Belgium Netherlands Strong traffic increase on routes with a current low traffic level: Dusseldorf, Stockholm, Roma Some existing non scheduled routes may also become scheduled: Marrakech, Djerba, Monastir, Heraklion 02/12/2009 Page 28
CONTEXT AND OBJECTIVES What is the impact of these strategic options on airport ATM? 02/12/2009 Page 29
Impacts on ATM Impacts of new route network on ATM? Would need a specific study In FAST only preliminary identification Predictions of interviewed experts (from France (DGAC), Slovakia and Czech Republic): LCCs traffic on new transverse routes may not be the highest generator of ATFM delays New transverse routes may increase the complexity of the en-route air traffic management 02/12/2009 Page 30
Impacts on ATM Transverse routes may not be the highest generator of ATFM delays First reason: Medium-sized and small airports are not the main generator of ATFM delays at a European level (less frequent delayed flights) ATM minutes of delay for Clermond Ferrand and Beauvais airports in 2007 Second reason: Lower increase in ATFM delays at non-hub airports Total number of 2007 departure flights 20 000 18 000 16 000 14 000 12 000 10 000 8 000 6 000 4 000 2 000 - Clermont Ferrand (Hub) Beauvais (Non-Hub) 4 500 4 000 3 500 3 000 2 500 2 000 1 500 1 000 02/12/2009 Page 31 Departure flights in 2007 Total yearly ATM delay in 2007 (in minutes) 500 - Total ATM delay for departure flights in 2007
Impacts on ATM Transverse routes may not be the highest generator of ATFM delays Third reason: Additional flights mostly operated at non-peak hours Number of flights Departure flights distribution over the day at Lyon airport (Date: 23 january 2009) 35 30 25 20 15 10 5 0 06:00-07:00 08:00-09:00 10:00-11:00 12:00-13:00 14:00-15:00 16:00-17:00 18:00-19:00 20:00-21:00 Time Air France LCCs Other FSCs 02/12/2009 Page 32
Impacts on ATM New transverse routes may increase the complexity of the en-route air traffic management Observation of the potential crossing of areas with dense traffic that the potential new routes at the analyzed airport may generate increase in existing traffic flows at intersections in areas with dense traffic volume could be an increase in the complexity of air traffic management complexity increase may however be mitigated by flights operated at non-peak hours and by the flight frequencies on these new destinations 02/12/2009 Page 33
Impacts on ATM Potential impacts of the future Bordeaux network new destinations to Northern European destinations would cross areas with a dense traffic volume Impacts : increase in the volume of traffic in these dense areas and/or the increase in the number of intersections with existing traffic flows. 02/12/2009 Page 34
Conclusion Conclusion on the FAST project FAST is an innovative methodology applicable to any airport case study complementary to forecasts dealing with traffic increase on existing routes Potential changes in airport route network identified thanks to changes in airport strategies Results for Bordeaux validated by the recent strategic changes of Bordeaux airport (June 2009): Orientation toward the quality of service: Bulding of a low-cost terminal (operational in May 2010) Announced objectives: Secure the loyalty of passengers and of airlines Attract additional low-cost airlines on the platform 02/12/2009 Page 35
Conclusion Conclusion on the FAST project Methodology only applied to a few airports in the study but could be applied and extended to: all airport types including new European member states airports with overlapping catchment areas competing hub airports, complementary airports in case of multi-airport management or in case of hub and secondary airports 02/12/2009 Page 36
Thank you very much for your attention Any questions 02/12/2009 Page 37