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The current pandemic of the novel coronavirus has disrupted the aviation business. In a time where most airports are facing dramatic traffic drops or even a cease of operations, the immediate focus of route development has naturally shifted from developing eager opportunities to retaining and recovering existing routes.
Concentrate on the right routes for a successful restart
In this phase of uncertainty and unparalleled economic pressure…
New BEONTRA feature enables airports to identify their focus routes
To support the activities of airports and their airline partners around a restart under the current circumstances, BEONTRA has released a cutting-edge feature to its B Route Development solution.
Take charge of the recovery and start making data-driven decisions on the appropriate route development actions! Contact us today for a demo!
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The aviation industry is globally struggling with the effects of the Coronavirus resulting in 90% decrease of aircraft movements in the amount of aircraft movements at certain parts of the world, most notably Europe. While it is crucial for airports to respond to this sudden drop in order not to endanger their financial stability, it is also of great importance to understand and plan for the recovery that will happen after the severity level of the pandemic has reduced. Having a sound plan for recovery can be a make or break for airports to come out of this crisis stronger and healthier. Therefore, BEONTRA compiled a few recommendations on how to plan for a successful recovery.
Create multiple what-if scenarios
Due to the unprecedented nature of the COVID-19 crisis, some of the airlines facing increased vulnerability might be on the verge of bankruptcy or having to significantly reduce their aircraft fleet. State aids might be given to some of these airlines, but it is still unknown whether all airlines, let alone all their routes, can be saved. Therefore, it is recommended that you create multiple what-if scenarios for your upcoming planning season on the expected amount of flights, especially if one or more of the endangered airlines serve a large percentage of your routes. It is of key importance to stay realistic about what portion of your traffic you can retain.
Expect aircraft changes
Airlines might choose not to fly parts of their fleet that are causing inefficient operations (both financially and in terms of emissions) such as the Boeing 747 or the Airbus A380. On the one hand, these might bring you lower passenger numbers and hence lower aeronautical revenues, simply because some of these routes might cease to exist or would be recovering over a long period of time. On the other hand, the overall sustainability of your airport would be increased since such routes will be served by different, modern and more efficient aircraft such as the Boeing 787 or Airbus A350. These aircraft types have lower noise and fuel emissions contributing to a more sustainable aviation industry.
Stay conservative
Different sources state different scenarios regarding the speed and magnitude of the recovery within the aviation industry. Since most of the airline fleets are grounded, it is worthwhile to stay conservative and include more route characteristics than usual in your approach to recovery. As an example, domestic air travel will probably be quicker to get back on its feet, with restrictions likely to remain in place on international air traffic for a longer period of time. Furthermore, business traffic is likely to re-start earlier than leisure traffic as the trust of the general public in safe air travel is expectedly slow to be restored. Hence, planning for a gradual and uneven recovery of air traffic is the safest approach. Create or update your seasonal aeronautical budget forecasts both with gradually increasing aircraft movements and also gradually increasing and segmented seat load factors to avoid overestimating your potential performance.
Conclusion
The short-term negative effects of the COVID-19 pandemic can be followed by more long-term negative effects, but with adequate planning, the path to recovery can be optimised. Being realistic and exploring all possibilities, and at the same time staying optimistic that your airline partners and passengers will begin to visit your airport is the key to managing the situation properly. By accounting for the above-mentioned recommendations, you and your airport can aim for a planned recovery. When working with the BEONTRA Scenario Planning Suite you will be able to easily apply these recommendations into your recovery plans, hopefully leading to a more prosperous and profitable future.
Contact us or request a free demo to find out more about how BEONTRA can support your airport.
The current pandemic of the novel coronavirus and the subsequent rapid spread of COVID-19 have disrupted the regular operations of all our businesses. We are no exception to that and have already taken steps in the past weeks to ensure the safety of our employees and continuity of our service to you, our customers.
We understand that this is an utmost exceptional time for both you as our customers and for us as a team. We are continuing to look at ways we can help you with the rapidly changing situation within the aviation industry.
Our operations are continuing and, at this time, we see no significant impact in our ability to support our customers during this critical time. We are available as you are used to and will be just as responsive as always to your needs.
You need further assistance? Please contact us via support@beontra.com.
Wishing you all a safe and healthy time over the coming weeks.
Your BEONTRA Team
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IATA recently revealed its “Impact Assessment of the Novel Coronavirus” where they analysed the potential impact of the health epidemic on the global and regional aviation markets through multiple what-if scenarios. The sharp decline in flight ticket bookings and the quick spreading the virus forced airlines to start cancelling flights in vast numbers that in turn significantly reduces the number of passengers and aircraft arriving to airports.
This in turn is expected to have a negative economic impact between $63 and $113 billion. As the virus is still spreading, we are yet to see its overall effect on the airports’ flight schedules and predicted passenger numbers. Therefore, just like IATA, airports also need to prepare multiple what-if scenarios to understand how much they would be disrupted.
As many of BEONTRA’s airport customers are affected by this situation, BEONTRA has activated its Cancellation Rate feature free of charge for the duration of this health epidemic. All community members using B Tactical for their Flight Schedule Management or Budget Forecasting tasks will benefit automatically. Hopefully, the feature will be of help to prepare for the highly unexpected and severe effects of the Coronavirus on their operations.
With this feature, the user can select for which set of flights which absolute number or percentage of flights need to be cancelled and for what period of time. Use it in combination with the standard bulk changes on expected aircraft types and seat load factors to create multiple scenarios within minutes and allow for aligned decision making.
BEONTRA hopes that even in these difficult times, airports can plan their business processes in a way that is efficient and will make most of the situation. We would like to encourage you to contact us at support@beontra.com in case you need further assistance with your planning tasks as we are here to help you wherever we can.
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Research conducted by BEONTRA reveals that more than half of all newly introduced routes have an origin-destination (OD) market size below 1,000 passengers prior to the opening. This finding proves that the common approach to use OD demand data to identify potential new routes, is not effective for a large number of markets. Following discussions with analysts from leading airlines, BEONTRA has developed a method which takes the bigger picture into account. It will be available as a new feature in the B Route Development solution in March 2020.
Unserved short-haul markets often lack substantial existing traffic
OD market data are widely accepted by airports and airlines and play to their strengths in the analysis of established markets or large unserved markets. However, especially for short-haul destinations and emerging markets, the current market size on unserved routes is often too small to be a meaningful indicator for the viability of a non-stop service.
Many point-to-point airlines rely on route benchmarking
Due to the limited significance of OD data, airlines specialized in point-to-point services, such as low-cost carriers, often take their decisions based on a benchmark of routes. From their revenue management system, they know which of their existing routes are most profitable and they look out for potential markets with similar characteristics. Besides traffic data, the most frequently examined criteria are competition and catchment demography.
New BEONTRA feature ranks opportunities and proposes potential carriers
To enable airport route development teams to objectively judge market opportunities, BEONTRA is introducing a new feature to its route development solution. The “Route Opportunity Finder” automates route benchmarking and creates a ranking of potential new air services. The algorithm analyzes more than 50,000 actual airlines routes, which have been introduced in the past 10 years, and compares them against the characteristics of potential new destinations for your airport. Criteria used include traffic structure and competition as well as demographic data, such as catchment population and GDP.
The resulting ranking of promising routes reflects the airlines’ preferences derived from their market activity. Also, a recommendation of potential carriers, which could serve the route is provided. This amazing feature does not only save you time, but also eliminates your blind spot and makes you aware of markets which you might not have thought of.
About B Route Development
With this new feature, BEONTRA’s B Route Development product covers the full scope from the discovery of route opportunities to the creation and presentation of fully-fledged airline business cases. More than 30 airports world-wide put their trust in B Route Development, which is built on industry standard data sources, such as Sabre Global Demand Data, flight schedules and airline unit cost information. Find out more about B Route Development.
Interested? Contact us today for a free demo
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