Target: International

DFW International and Boston Logan International airports are putting on major incentive pushes to attract international air service, at a time when Open Skies agreements are opening up new routes and opportunities. At the same time, U.S. carriers are in the midst of merger discussions in which international opportunities are center stage. AIRPORT BUSINESS recently spoke with Joseph W. Lopano at DFW and Thomas J. Kinton, Jr. on their initatives. Some edited highlights ...

DFW international
The airport has dubbed 2008 the ‘Year of the International Traveler’ and recently unveiled its Visit DFW campaign in association with its local Convention & Visitor Bureaus. The multimillion dollar initiative was unveiled in Seoul, South Korea in January, complete with Dallas Cowboy Cheerleaders.

Joseph Lopano is the executive VP of marketing and terminal management at DFW, and his career includes working with Continental and Lufthansa. He shares his thoughts on the new effort ...

On the latest initiative ...

“The Year of the International Traveler is a moniker that was assigned by our public affairs guys. What we’re really doing is celebrating a fairly substantial increase in international flying this year versus the past. What we’ve seen, just on the part of American Airlines is that it’s added four international destinations in one year — Panama City, Panama; San Salvador, El Salvador; Tampico, Mexico; and also London Heathrow, which we’ve been trying to get for a long time. We also have KLM starting a flight to Amsterdam.

“Simultaneously, we’ve created a marketing program and have contracted with the CVBs of Dallas and Ft. Worth to market DFW overseas in specific markets. That’s really aimed at overseas markets to increase travel to the airport and through the airport. It’s a $5 million contract over 18 months and it’s primarily being focused on South America, Latin America, and Mexico. Most of it is really focused on Mexico because we have so many destinations and so much capacity in Mexico. But we’re also talking to Asia as well.

“It’s a unique program; it may not be the first of its kind. It’s certainly new to the Dallas/Ft. Worth area; it’s really a reflection of the commitment we have to grow the international nature of the DFW Metroplex. We are on the road constantly, meeting overseas.”

On assistance to carriers in foreign markets ...

“We could dedicate some of our marketing money from the Visit DFW campaign to the market that the airline is starting from to generate some primary demand from their own country.”

On the role of Open Skies agreements ...

“It’s a big piece and something that we’ve been trying to get for a long time. There are some ideas about a visa waver with Korea and loosening of rules on Chinese leisure travelers — all of these focus on international efforts.”

On the incentive program already in place prior to Visit DFW ...

“When go to an airline and say we have an incentive program but we’re also doing some destination marketing, those sort of work in tandem.

“It’s pretty robust; it’s about 18 months of reduced fees, or partially reduced; some marketing funds; sometimes it’s in excess of $1 million.

Boston logan
Thomas Kinton serves as the CEO/executive director of Massport, which oversees Boston Logan, Worcester Regional, and L.G. Hanscom Field. He has some 31 years with Massport and was named director at Logan in 1993.

For Logan, Kinton relates, an airline incentive program is something new. The airport has strong domestic and European service, and the new program is targeted at linking up with other international cities, much of it driven by local business demand. His thoughts ...

On the incentive program as a whole ...

“First of all you have to have a market. This is not going to get airlines to come just because you’re putting this out there. As airlines and airports compete for these various routes, we’ve seen other airports going to incentive programs that involve some sort of rebate on landing fees as well as advertising money. And we wanted to level the playing field and have a similar program at Boston.

“If it’s a choice between us and another market, we’re not going to lose out because we’re not being competitive.”

On the reception by airlines ...

“We’re working with several carriers. It remains to be seen; we plan to put it in place July 1. We think it’s going to be viewed positively. It’s not for every start-up and every market. We’re going after certain areas of the globe where we presently don’t enjoy non-stop service, like Asia, the Middle East, Mexico City, and Latin America. Our’s is targeted specifically to those markets.

On the upcoming Open Skies agreement with the E.U. ...

“That would not be any part of this. We’re heavily into Europe now with a tremendous amount of service ... London, Paris, Germany. This is not to try to stimulate the European market because it’s already a very strong market here.”

On costs of the program ...

“It could range from three-quarters of a million to a couple million dollars a year, depending upon how many takers we have. Since it’s landing fee-related it relates to the size of the aircraft.

“To give an example, if you did it for a 787, today’s landing fee would cost a 787 $564,000 a year. A 75 percent rebate in year one would look like $423,000; a 25 percent rebate in year two would be $141,000.
“Then you have the advertising incentive which would be $150,000-200,000 a year. It’s working with the carrier on billboards, other media, to promote the service.

On the need to connect local business interests ...

“We’re seeing Boston strengthen its economy in higher education, hospitals, high tech, the life sciences, alternative energies, investment, banking, and insurance. Those sectors have really taken off in a variety of places around the world. Then of course the tourism industry will backfill the business traffic as well.

On resources for putting the program together ...

“We mostly used our own internal marketing department, though did view what others are using. We used our aviation consultant, SH&E, to help advise us.

On the impact of the Boeing 787 in 2009 ...

“The 787 can easily handle the 10,000-foot runway, and you don’t have to try to fill 435 seats — this market couldn’t support that; but we can certainly fill 220 seats. And it’s got the range capability to do something off the East Coast into Asia very easily. So, I think it is going to change the dynamic where airlines go in the future. It fits many markets that presently don’t have non-stop service.”

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