Monday, August 8, 2011

Let us grow off-peaks

Many airports continuously operate at or above capacity. Not necessarily throughout the day, but during peak hours. The most obvious solution to this problem is to make the airport infrastructure match the demand. However, there may be economical, political, environmental, space, time or other constraints preventing this. What about other approaches which are feasible without major investments and in a shorter timeframe?

Obviously, you can improve your current operational performance. You will find posts here about efficiency and effectivity, basically doing the right things right. There is, however, an area I have not explored yet, why not grow off-peaks? Let me explore two out of many textbook solutions to this problem.

Peak Pricing

One straight forward approach would be to differentiate the price of airport slots between different periods. There are often significant variations in the demand for slots at different times of day, on different days of the week and during different months of the year which can result in airports operating at full capacity at peak periods, whilst many slots may remain unused at off-peak periods. If the price of a peak period slot was higher than the price of an off-peak slot the demand for slots may be rescheduled.

Aviation Marketing

Aviation/airline marketing teams work together with airlines to explore market opportunities, support start-up operations and to help maintain a positive long-term partnership between the airline and the airport. Now this sounds great and simple to attract airlines for peak times. It may be hard though to attract them for off-peak periods, but let me give you an example on how this could be achieved. There may be this legacy carrier which is the only airline flying a specific route. Suppose you can convince an airline, e.g. a no frill airline, to operate to the same destination during off-peak times. How? Maybe you offer them a kick-back for every additional passenger on this route, including additional passengers flying on the legacy carrier. Winners? The airport, the new airline and ground handlers. Loosers? The legacy carrier which looses some yield, but do you care as an airport?

I am not sure whether this works at every airport, it has worked at least at one. Why not give it a try?

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