Christopher Barks - LANDINGS LATIN AMERICA - Panel 2: Regional aviation overview: what works and what is necessary to implement in Latin America

1. 1st International Brazil Air Show (IBAS) – Landings Latin America
1Federal Aviation
AdministrationMarch 31, 2017, Rio de Janeiro, Brazil

2. Presented to: 1st International Brazil Air Show
(IBAS) – Landings Latin America
By: Christopher Barks, Director,
Western Hemisphere Office,
Federal Aviation Administration,
U.S. Department of Transportation
Date: March 31, 2017
Rio de Janeiro, Brazil
Federal Aviation
Administration
Air Service Development
(ASD) Techniques to
Increase Regional Aviation
Activity

3. 1st International Brazil Air Show (IBAS) – Landings Latin America
3Federal Aviation
AdministrationMarch 31, 2017, Rio de Janeiro, Brazil
Contents
Air Service Development (ASD) Overview
• Importance of air service development and what it encompasses
• Air service development in context
• Major competitive challenges to ASD at small communities
Addressing Competitive Challenges Through an Active ASD Program
• Assessing Existing Service and Stakeholders
• Identifying Available Financial and Human Resources
• Establishing and Validating ASD Goals
• Selecting a Strategy and Techniques for Air Service Development
• Making a Compelling Case for Air Service
• Evaluating and Refining the Program
ACRP Report 18: http://www.trb.org/Publications/Blurbs/Passenger_Air_Service_Development_Techniques_162396.aspx

4. 1st International Brazil Air Show (IBAS) – Landings Latin America
4Federal Aviation
AdministrationMarch 31, 2017, Rio de Janeiro, Brazil
Air Service Development (ASD) Overview
ASD involves all activities directly related to enhancing commercial
passenger service at an airport, including understanding:
• The local community and what drives its economy,
• The air service and fares that airlines offer,
• The cost and revenue issues that influence carriers’ decisions on
which markets to serve,
• How an airport can extend financial and non-financial incentives to
carriers,
• What carriers value most and what they want to know about a
community,
• How to make and present a sound business case to airlines, and
• How to evaluate the ASD efforts and revise them as needed.

5. 1st International Brazil Air Show (IBAS) – Landings Latin America
5Federal Aviation
AdministrationMarch 31, 2017, Rio de Janeiro, Brazil
The Importance of ASD and What it Encompasses
• Air service has value as an economic driver
• Airline decisions on markets is a matter of revenues vs costs
• Airports and communities can provide helpful information to carriers:
– Information that the carriers might not otherwise have had,
particularly on changes in the local area’s economy.
– Organize efforts to influence the local demand for travel.
– Support development of financial incentives as a way to share
the risk of starting new service.
– Actively contribute to incentive programs and provide marketing
assistance to airlines.
• Key community stakeholders:
– Major employers, the local chamber of commerce, the local
economic development agency, and local hotel associations and
resorts.

6. 1st International Brazil Air Show (IBAS) – Landings Latin America
6Federal Aviation
AdministrationMarch 31, 2017, Rio de Janeiro, Brazil
ASD in Context
• Most small communities in the U.S. connect to the
national aviation system as “spoke cities”
• Relatively few low-cost carriers (LCCs) serve small
communities in the U.S.
• The challenge for airlines is to match the relatively
limited passenger demand in those communities (along
with its corresponding limited revenue) with the right
amount of capacity, while controlling operating costs.

7. 1st International Brazil Air Show (IBAS) – Landings Latin America
7Federal Aviation
AdministrationMarch 31, 2017, Rio de Janeiro, Brazil
Major Competitive Challenges to ASD at Small
Communities
• Most small airports suffer from “passenger leakage.”
• Business passengers tend to choose airports with more choices.
• Leisure passengers prefer airports offering lower fares and non-stop
service to their destination.
• The major competitive challenges facing small communities include:
– Proximity to legacy network hub.
– Proximity to airport with low-cost carrier service.
– Small populations that are geographically isolated.
– Fragmentation of the local passenger traffic base among
competing nearby airports.
– Predominantly inbound markets that rely on tourism.

8. 1st International Brazil Air Show (IBAS) – Landings Latin America
8Federal Aviation
AdministrationMarch 31, 2017, Rio de Janeiro, Brazil
Addressing Competitive Challenges Through an Active
ASD Program

9. 1st International Brazil Air Show (IBAS) – Landings Latin America
9Federal Aviation
AdministrationMarch 31, 2017, Rio de Janeiro, Brazil
Assessing Existing Service and Stakeholders
Figure: Major air service problems identified by small airports

10. 1st International Brazil Air Show (IBAS) – Landings Latin America
10Federal Aviation
AdministrationMarch 31, 2017, Rio de Janeiro, Brazil
Identifying Available Financial and Human Resources
• ASD programs needs two types of resources: financial and human.
• Two general areas of financing to meet an airport’s ASD funding needs:
– revenues generated by the airport itself and
– revenues derived from other sources, such as private corporations,
tourism organizations, and government at various levels.
Table: Median amount of resources applied to ASD, by hub size and category of assistance.

11. 1st International Brazil Air Show (IBAS) – Landings Latin America
11Federal Aviation
AdministrationMarch 31, 2017, Rio de Janeiro, Brazil
Establishing and Validating ASD Goals
Figure: Most frequently mentioned ASD goals

12. 1st International Brazil Air Show (IBAS) – Landings Latin America
12Federal Aviation
AdministrationMarch 31, 2017, Rio de Janeiro, Brazil
Selecting a Strategy and Techniques for ASD
Figure: ASD techniques used by small airports.

13. 1st International Brazil Air Show (IBAS) – Landings Latin America
13Federal Aviation
AdministrationMarch 31, 2017, Rio de Janeiro, Brazil
Making a Compelling Case for Air Service
Figure: Information that airports present to carriers.

14. 1st International Brazil Air Show (IBAS) – Landings Latin America
14Federal Aviation
AdministrationMarch 31, 2017, Rio de Janeiro, Brazil
Making a Compelling Case for Air Service
Figure: Kinds of information carriers are interested in.

15. 1st International Brazil Air Show (IBAS) – Landings Latin America
15Federal Aviation
AdministrationMarch 31, 2017, Rio de Janeiro, Brazil
Evaluating and Refining the Program
• An assessment provides a systematic and
unbiased review of the methods and procedures
used, as well as the results obtained.
• Three basic components needed to determine
whether an ASD technique worked effectively:
– Knowing the objectives exactly,
– Measuring outcomes, and
– Attributing causation.

16. 1st International Brazil Air Show (IBAS) – Landings Latin America
16Federal Aviation
AdministrationMarch 31, 2017, Rio de Janeiro, Brazil
Obrigado!
Christopher Barks
Director
FAA Western Hemisphere Office
Embassy of the United States
Panama City, Panama
T: +507-317-5370
M: +507-6482-0033
M(US): +1-202-258-5914
E: christopher.barks@faa.gov