Regaining stability

A wrap-up from ACI-NA's annual airport economics and finance conference held in Miami

Michael Audino, senior researcher for the Center for Urban Transportation Research (CUTR) at the University of Southern Florida, also presented on findings related to utilizing incentive programs to enhance air service. Citing ACRP’s (Airport Cooperative Research Program) Research Report- 18: Passenger Air Service Development Techniques, key issues in terms of enhancing air service are: fares are too high, unreliable service, and difficult connections, relates Audino.

Why offer incentives he asks? “Except in unusual circumstances, all communities will need to provide some sort of risk mitigation to attract new or enhanced service,” comments Audino.

ACRP’s research report identified four primary air service development or incentive options ranging from revenue guarantees; travel banks; fee waivers; and marketing and advertising activities.

Echoing Hargrove’s remarks, “From a strategic perspective, it’s important for airports to develop air service development goals, and then be able to line up the appropriate incentive programs behind those goals,” says Audino. “As a community, each risk mitigation technique utilized has risks unto themselves.

“Advertising and marketing assistance involves relatively low risk as a community because it does not require a significant amount of investment. Revenue guarantees on the other hand, involve greater risk.

“I think this whole issue of airline incentives and mitigating risk … framing it as a risk mitigation technique ... is a classic example of how public/private partnerships have worked, and continue to work.”

The research clearly shows that air service incentives work … it’s important for airports to ensure that incentives are aligned with the goals for the air service it is seeking, stresses Audino. “Incentives are not a silver bullet; they are one way to help elevate and enhance air service to communities.”

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