Best Practices for Airline Partnerships & Route Development
October 20, 2014
Insider Update from Peru’s Elisabeth Hakim
Most destination marketing organizations (DMOs) are aware of the vital role that accessibility – particularly airlift – plays in a destination’s ability to boost arrivals and sustain long-term growth. Yet with the rise of regional airports, low-cost carriers such as Air Transat and Porter, and the boon of international visitors beyond traditional cosmopolitan gateways, many DMOs are dipping their toes into route development for the first time.
As with many relationships, airline partnerships often commence withsparks of brilliance. DMOs are eager to leverage the airlines brand recognition and tap into the airline’s loyal database of travelers to boost arrivals and spending. Yet as the months lag and results take longer than expected, partners can become frustrated. Having worked many years for an airline and now working for a DMO, I have experienced this situation from both sides.
Before beginning new route negotiations, familiarize yourself with what route development entails. Conferences like World Routes offer seminars that discuss the role of aviation and tourism and provide an overview on how the airport / airline business relations truly work. Seminars at the conference will help participants learn how to identify target markets and prepare a market potential brief for the airline.
In addition, here are five key things to keep in mind to better understand the airline’s point of view:
- Profitability. While a DMO wants to increase growth in arrivals, visitor revenue and even brand recognition, an airline’s top priority is high-yield passengers. First class and business class passengers are their primary target for profitability. While a leading tour operator is a strategic co-op marketing partner for a DMO because of passenger volume, the passenger yield might not be attractive for the airline. Come to the table with third-party partner recommendations that make sense for the airline.
- In-kind Contributions. Airlines do not usually contribute extensive cash to a campaign – their contribution is in-kind. So DMOs should not expect an airline partnership to fully fund their advertising buy. Instead, focus on targeted efforts that leverage the airlines strengths — brand recognition and loyal customers – to boost the destination’s brand image.
- Limited Staff. Airlines generally lack manpower – due to staff costs – so they are often unwilling or unable to carry out intricate activities or events. Being able to do turn-key events on their behalf is integral to partnership success.
- Airline Incentive Trips. Be prepared for an airline’s request to partner on sales incentive trips for their top sales producers. While such trips can offer value for a DMO, DMOs should ensure that airlines agree to provide resulting sales figures that will justify the DMOs investment in ground costs for hosting the group.
- Airport Management & Compliance. The airport authority is an important third party partner for new route development. An airport authority will likely be conducting their own formal negotiations with airlines to maximize leasing arrangements for their gates and ensure that service being offered aligns with FAA regulations and regional needs. Formalize your relationship with the local airport authority prior to approaching airlines. A joint-approach will yield more effective and efficient results.