Editor’s comment: Use-it-or-lose-it

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Regional Gateway editor Chloë Greenbank summarises the latest happenings across airports serving business, regional and low-fare routes.
With the global aviation community badly hit by the impact of the current coronavirus outbreak, airline regulators in the EU have agreed to temporarily suspend airport use-it-or-lose-it slot rules.
The rules, which require airlines to use 80% of their allocated slots or face losing them to a competitor, had resulted in an increasing number of “ghost flights,” whereby aircraft have been operating with very few or no passengers at all in a bid to retain their airport slots.
The temporary suspension will allow airlines to respond to market conditions with appropriate capacity levels without the risk of losing take-off and landing privileges in the future.
Industry bodies, including the European Regional Airlines Association (ERA) and the International Air Transport Association (IATA), have welcomed the regulatory decisions waiving airport slot rules. However, Airports Council International (ACI) World has urged for caution. It has issued a statement calling for a proportionate slot allocation that will preserve global airport connectivity.
“A global suspension of slot rules would jeopardise the ability for countries to stay connected with the world, which will in turn have knock-on effects to economies,” the statement read.
ACI World’s Director General, Angela Gittens, added: “Airports rely heavily on airport charges to fund their operating and capital costs and operators find themselves under intense pressure during periods of traffic decline. Airport revenues must be sufficiently protected to ensure safe and sustainable operations. Measures to limit the collection of airport charges would be ill-advised.”
Suggesting that a market-by-market review would be the best option when it comes to assessing slot usage requirements, Gittens stated: “An evidence-based review would examine infection rates, load factors, forward booking forecasts, and the impact on the environment of continuing certain services.”
These are unprecedented times and with the breaking news this morning that the US will ban all flights from mainland Europe (excluding the UK) to the US as of midnight on Friday 13 March, the need for the airports, airlines and regulatory bodies to pull together and strengthen co-operation has never been stronger.
The editor’s comment is published weekly as an accompaniment to the Regional Gateway e-newsletter. If you do not currently receive our email updates, you can subscribe here.

European airports faced with COVID-19 crisis

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The rapid spread of the COVID-19 epidemic around the world is affecting airports around the world with the global aviation community now facing a full blown crisis.

Addressing the situation in Europe Olivier Jankovec, Director General at ACI Europe said: “For now, airports in Italy are clearly the most affected. Even before the decision to place the whole country under lock down, Italian airports were already confronted with a dramatic free fall in passenger traffic.” He added that now they are “bracing for a total collapse in air connectivity and the prospect of losing most of their revenues.”

Elsewhere in Europe, the situation for airports is rapidly deteriorating. “Airlines are drastically cutting capacity and cancelling air services as they respond to falling demand resulting from loss of confidence, changes to corporate travel policies, and governmental measures which directly or indirectly restrict mobility in their efforts to contain the spread of the virus,” he said.

ACI Europe’s initial assessment of the impact of COVID-19 outbreak on the region’s airport operators show a loss of -67 million airport passengers in the first quarter of 2020 and an overall diminution of -187 million passengers for Europe’s airports in 2020. In financial terms a loss of -€1.320m in revenues in Q1 alone compared to a normal financial quarter.

The immediate cash flow pressures faced by airports has led to some adopting cost cutting measures. These include voluntary unpaid leave, recruitment freezes and the deferral of non-essential investment. Beyond the short-term impact on their financial standing, the COVID-19 epidemic could have lasting implications particularly for smaller and regional hubs, as future investments in sustainability, capacity and digitalisation all depend upon financially robust and stable businesses.

London City Airport wins operational excellen..

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London City Airport (LCY) and Alcumus Info Exchange, a software-led risk management solutions provider, have won an operational excellence award in recognition of the airport’s ‘Permit to Work’ scheme and the contribution of technology to improving risk management in the transport sector. The award was given by independent research firm Verdantix.

The Permit to Work scheme has enabled LCY to have a clear image of the work that is taking place on site at any given moment and enabled the airport to assess and understand the potential implications on day-to-day operations, customer experience in conjunction with existing assets and infrastructure. More than 2,200 people work around the clock at the London hub.

The airport is currently undergoing a £500m development programme with eight aircraft stands, a new taxiway and brand-new passenger terminal all in the works. Normal operations will continue at the airport while the work is ongoing and the implementation of Alcumus Info Exchange’s software will provide LCY with an exact overview of which contractors are on site, where they are and will be working, the type of work taking place, how long the projects will take and the risks that are associated with the tasks and the areas that they are in.

Commenting on the partnership Caroline Maltby, Interface and Process Manager at London City Airport said: “This enabled us to work across a range of our teams and display the information they need in order to keep all our staff, contractors and stakeholders safe while on site.”

realterm

$150m raised for airport logistics fund

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Realterm, a value-added real estate operator in the US, has raised $150 million in capital commitments, through its wholly owned subsidiary Aeroterm, for its Realterm Airport Logistics Properties, L.P. (RALP) fund. RALP has raised close to $750 million in external commitments to capitalise its investment activities.

Realterm currently manages more than $5 billlion in assets through five logistics-oriented private equity fund series. This includes RALP, which is comprised of 133 properties at 36 airports and serves as the investment platform for Aeroterm’s development, acquisition, financing and long-term management activities in North America. Aeroterm focuses on the development, redevelopment and acquisition of on-airport air cargo and aviation-related support facilities, including cargo buildings, hangars and flight kitchens. The new capital commitments will contribute to around $300 million of projects currently in design or construction across RALP’s North American portfolio.

“Almost five years after our formation of RALP, we are pleased to have provided top quartile returns to our limited partner’s while servicing our airport and tenant customers with premier sustainable facilities built for the rapidly growing aviation industry,” said David Rose, Managing Director and Senior Fund Manager.

“Our ability to help foster job growth, sustainability and efficiency across North American airports continues to have a tangible positive impact on both our LP’s missions and the airports and surrounding communities who partner with us,” added Rose. “We are set to deliver five new LEED-certified industrial buildings that will transform each airport’s ability to grow both cargo and passenger volumes for many years,” he concluded.

realterm

Bromma Stockholm Airport “Most Improved..

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Sweden’s Bromma Stockholm Airport has been named Europe’s Most Improved Airport in the Airports Council International’s (ACI’s) 2019 annual ranking of global airports that provide the best customer experience for passengers.

Last year the airport welcomed some 2.4 million passengers, the majority of which were domestic passengers. The award is as a direct result of Swedavia’s efforts to modernise airport facilities and improve customer experience in recent years said Mona Glans, Airport Director at Bromma Stockholm Airport. These improvements have included five new gates, a new arrival hall, which was inaugurated in 2018, a renovated security checkpoint for more efficient passenger flow and an overall refurbishment of airport facilities.

“Naturally we are proud and pleased  that our work to improve the customer experience is appreciated by our passengers and that the airport has now been honoured with this award,” said Glans. “This is the result of great effort and teamwork and something the whole airport has contributed to,” she continued.

Mona Glans, Airport Director at Bromma Stockholm Airport highlighted that Swedavia has been working on modernising airport facilities and improving customer experience over recent years. This has included implementing five new gates, an arrival hall, a renovated security checkpoint for higher efficiency and an overall refurbishment.

“Naturally we are proud and pleased that our work to improve the customer experience is appreciated by our passengers and that the airport has now been honoured with this award,” commented Glans. “This is the result of great effort and teamwork and something the whole airport has contributed to.”

Alongside its effort increase passenger satisfaction, Swedavia is working hard to achieve sustainable growth. The airport operator is aiming for all ten of its airports to have zero carbon emissions from their own operations by the end of 2020. It has also been actively promoting the industry’s transition to sustainable aviation fuel, with the expectation that 5% of all fuel supplied to aircraft at Swedish airports will be fossil-free within the next five years.

Quebec City Airport takes ASQ win

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Québec City Jean Lesage International Airport (YQB) has been called the best airport in North America in the 0-2 million passenger category in the Airports Council International (ACI) Airport Service Quality (ASQ) survey.

It’s the fourth time the airport has been named ’best in its class in North America’, having previously received the prestigious award in 2010, 2011 and 2013. But this year is the first time the airport has won the award since opening its new terminal building. The ASQ survey is based on passenger satisfaction levels, which are closely linked to the improvement of the airport and enhancement of the passenger experience since the terminal building’s expansion and reorganisation. There have been upgrades in the stores, restaurants, waiting areas and accessibility of the airport, which has also enhanced the overall passenger experience by improving the process at check-in, security checkpoints and customs.

“Caring for our passengers is one of our guiding principles. We work hard to make YQB an airport of choice by fostering a human element that is as ambitious as its region and connected to the needs of its passengers,” commented Stephane Poirier, President and CEO of YQB. “The ASQ survey results are important performance indicators for our organisation. They allow us to prioritise our actions and ensure that we are investing our efforts where it counts so that we can work towards our goal of being an airport that makes people in the greater Quebec City area proud.”

San Diego County Regional Airport Authority c..

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The San Diego County Regional Airport Authority has received a 2020 Climate Leadership Award for its Excellence in Greenhouse Gas Management.

The Airport Authority obtained the award during the Climate Leadership Conference in Washington on 6 March for its efforts in reducing direct and indirect emissions by 80% from 2015 to 2035. By 2018, it had already achieved a decrease of 44%. It is developing strategies to reduce its carbon footprint by using cleaner fuels, using cars with a higher mile per gallon rating and utilising more ridesharing, also replacing individual rental car company shuttles. In addition, 15% of electricity demand is now supplied by solar power with plans for a 2 megawatt battery storage system in 2020. The authority is also committed to converting around 80% of ground support equipment to alternative fuels by 2024, opting for electric vehicles where possible.

“It’s an honour to have to have the Airport Authority as well as our leadership recognised at this year’s Climate Leadership Conference and Awards,” said Kim Becker, President and CEO of the Airport Authority. “The Airport Authority is committed to sustainable business practices and works closely with our community, stakeholders and employees to address and limit environmental concerns at the airport.”

The Climate Leadership Conference aims to gather innovative leaders from business, government, academia and non-profit communities to address solutions concerning climate change. Awards are presented to those who have aided movements in reducing carbon pollution and addressing global warming.

Bob Perciasepe, President of the Center for Climate and Energy Solutions (C2ES) highlighted that long-term success means working towards climate impacts and a decarbonised economy. He stated, “The only way to take advantage of the clean energy transition is to be clear-eyed about climate challenges. San Diego County Regional Airport Authority has demonstrated outstanding leadership in this and will be ahead of the game in the clean energy economy.”

Brendan Reed, the Airport Authority Director of Planning and Environmental Affairs, was also presented with an Individual Leadership award for his efforts in environmental operations and strategies. He led the Good Traveller Program which allows passengers to purchase offsets that go towards carbon reduction projects, assisting in the funding and development of a Climate Resilience Plan to secure business in future climate conditions, as well as leading an initiative to build stormwater systems to capture, store and reuse up to 39 million gallons of rain per year.

“Planning for long-term prosperity means accounting for climate impacts and a decarbonised economy,” said Bob Perciasepe, President of the Center for Climate and Energy Solutions (C2ES). “The only way to take advantage of the clean energy transition is to be clear-eyed about climate challenges. San Diego County Regional Airport Authority has demonstrated outstanding leadership in this and will be ahead of the game in the clean energy economy.”

Allegiant Air announce new base in Concord

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Allegiant Air has announced its plans to open an operations base at Concord-Padgett Regional Airport in North Carolina. The airport will become the airline’s 21st base.

The company is investing $50 million in the project, expecting to create at least 66 high-wage jobs and house two Airbus aircraft. Allegiant commented that it will focus on linking its customers to small-to-medium cities to provide more travel opportunities and aims to launch its North Carolina base on 7 October 2020.

Since establishing its service Allegiant has flown more than one million passengers through Concord including 353,000 in 2019 alone.”

“With a growing and diverse population seeking affordable vacation travel, and as a regional destination for race enthusiasts, arts fans and more, Concord is an ideal location for an Allegiant base,” said Keith Hansen, Allegiants VP of Government Affairs. “Having locally-based operations will mean opportunities for expanded hours, as well as more – and more frequent – flight offerings for residents and visitors alike.”

The partnership involved voices within Concord City Council and Cabarrus County Commissioners.

Allegiant successfully improved the tourism industry in Cabarrus County, accumulating $469 million in visitor spending in 2018, “positively impacting the local economy and quality of life in our community.” It is hoped that the company will have the same impact in Concord.

The company has announced plans to begin hiring pilots, flight attendants, mechanics and ground personnel to support the operations.

World Fuel Services

World Fuel Services takes on UVair Fuel Divis..

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World Fuel Services

Miami-based World Fuel Services has fully acquired the UVair Fuel Division from Universal Weather and Aviation for $170 million.

The deal makes World Fuel the exclusive contract fuel provider for Universal Weather and Aviation. Fuelling arrangements will be managed as they were previously but now with the access to World Fuel’s global fuel supply network, adding to UVair’s existing 5,000 worldwide locations.

Fixed-base operators (FBOs) will be able to use World Fuel Network’s marketing tools and World Fuel Rewards to reach a larger audience, providing customers with World Fuel Rewards, more contract fuel locations and the addition of Avcard, an aviation retail credit card, to their portfolio.

“Universal has the industry’s most comprehensive end-to-end mission management infrastructure, integrating more phases of the mission, and supporting more global trip legs, than anyone else,” added Evans. “With this new agreement, our customers will continue to benefit from having Universal seamlessly manage their trips, while at the same time enjoying the advantages of World Fuel’s global fuel supply network to better support their evolving needs.”

As well as working with World Fuel Services to provide fuel supply to customers, Universal intends to continue its international planning services. The company now aims to invest in areas that are receiving high demand in growth including FBO ground service locations, digital platforms, Trip Support Services, group transportation division and catering networks.

Universal Chairman, Greg Evans said that the company has “big plans moving forward” and that the sale will allow his company to focus on growth and expanding digital offerings.

“We are pleased to welcome the UVair team to the World Fuel Services organisation,” stated Michael J. Kasbar, Chairman and Chief Executive Officer of World Fuel Services. “This strategic acquisition will further enhance our global business and general aviation fuel platform.”

Flybe passengers told not to travel to airpor..

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As concern over the current coronavirus outbreak continues to escalate around the world, Exeter-based airline Flybe has gone into administration on Thursday 5 March. The impact of the coronavirus outbreak on demand for travel has been partly to blame.

A statement on Flybe’s website reads: “All flights have been grounded and the UK business has ceased trading with immediate effect… If you are due to fly with Flybe, please  do not travel to the airport unless you have arranged an alternative flight with another airline. Please note that Flybe is unfortunately not able to arrange alternative flights for passengers.”

The struggling carrier narrowly avoided going bust in January after a rescue package was announced by the UK government. But the airline came under fire from competitors who felt that the so called “tax holiday” – which involved deferring Flybe’s Air Passenger Duty (APD) bill – was unfair. Ryanair boss Michael O’Leary accused the UK government of covering up the true terms of the deal to rescue Flybe and threatened to launch legal action at home and in Brussels over what he claims is illegal state aid.

The collapse of Flybe will have a significant impact on airports across the UK, many of which had Flybe as their main or sole carrier. The airline served destinations from the Channel Islands to Aberdeen. For airports such as Exeter, Belfast City and Newquay it was one of a handful of airline choices and at Southampton it accounted for around 95% of the activity.

“We are extremely disappointed at this news and our first thoughts go to the Flybe employees and passengers affected” said Brian Ambrose, CEO of Belfast City Airport commenting on the news this morning.

“From Belfast City Airport, Flybe had operated a strong and profitable base of 14 routes to key regional destinations across the UK. The airline was a significant economic driver for the region, carrying 1.6 million passengers to and from Belfast in 2019,” he added.

“I am confident that these well-established routes, coupled with our city centre location and recent £15m investment in terminal facilities, will prove an attractive option to airlines. Negotiations with a number of carriers are already underway.”

Meanwhile Birmingham Airport issued a statement saying: “A number of routes operated by Flybe are served by other carriers from Birmingham, and we already have arrangements for two airlines to replace five of its routes in the next few weeks. We will continue to engage with other airlines to replace the remaining capacity for our region and customers.”