New strategy to boost air arrivals
A fresh strategy for boosting the air service to the island should be in place by the end of the year, according to advisers who have spent this week surveying Bermuda’s market.
Experts from Ailevon Pacific Aviation Consulting have been hired for one year at $75,000, split between the Bermuda Airport Authority and the Bermuda Tourism Authority.
Brad DiFiore and Oliver Lamb, managing directors at Apac, said they were “in the fact finding mission”, including talking to Bermuda’s present carriers.
The job is strictly to build air capacity, rather than market Bermuda, and the strategy aims to cover all air-service needs rather than solely tourism.
Mr DiFiore explained: “We have had conversations with the majority of the incumbent carriers, solely about existing experience — where they’ve been, what their service looks like to them, what their general sentiment is about the Bermuda market.
“We’re going to take that and collate that with this week’s meetings, along with the analysis we’re doing independently, to come up with a strategy that we take back to each carrier. We’re early in that process.”
Ailevon, an international firm with a North American subsidiary based in Atlanta, Georgia, has built successes in comparable jurisdictions such as Hawaii, and the city resort of Palm Springs, California.
Mr DiFiore said the company had worked with Hawaii for more than a decade, during which time tourism had improved business.
He said: “Much like Bermuda, its entire economy depends on air service, in every aspect, not just tourism.”
Top challenges for Bermuda include the seasonal variations, and the island’s high-cost image.
Mr Lamb said: “Palm Springs is a market with a very high seasonality, much like this destination, and also has a perception of being expensive.
“There are methods we’ve used in markets like that to overcome the barriers that seasonality creates. There are a lot of levers you can pull to effect that, and ensure a destination is attractive on a year-round basis.”
One of Bermuda’s old tactics is off the table: minimum revenue guarantees — cash paid to airlines.
Kevin Dallas, the chief executive of the BTA, said the island had none in place at present.
He added: “Over the last couple of years, we’ve had some success with using marketing incentives rather than MRGs. In particular, we’ve weaned airlines off some MRGs that really didn’t look like what you think an MRG should, in that they became a permanent subsidy to a flight rather than something used to get to sustainable service.”
Mr Dallas said taking on Ailevon had not come as “a kneejerk reaction” to news this month that air visitor numbers had fallen 5 per cent year-on-year for the first half of 2019.
He said: “It’s the long-term challenge we have with air-service development. Over the last 20 years, we’ve been pretty good at starting new services and not necessarily great at keeping them.”
Mr Dallas conceded “‘consultant’ is sometimes a dirty word”, but said it was cheaper to hire outside expertise.
He added: “When we balance what tourism needs with international business and travelling residents, we should be able to get to a prioritised list of needs. We can make choices about where we invest — where we put our incentives as well as where we put our time.”
Bermuda’s national plan for tourism “de-prioritises Europe”, Mr Dallas said, because North American “focus and nurture cities” can deliver a higher return on investment and marketing.
He added: “But we don’t know how important a Zurich or a Dublin could be to the insurance industry, or how much having competition to British Airways on the London route could mean for outbound resident travel.
“When we have a good understanding of those, we can say London wouldn’t rise to the top from a tourism perspective, but might be a priority for the business community and resident community. Does that mean we should make it a tourism priority as well?”
Mr DiFiore said there would “for sure” be a plan in place before the year’s end.
He added: “But it’s constantly evolving, because the airline industry is constantly evolving. Right now, with Boston, there’s a strategic war between JetBlue and Delta, which impacts all the opportunities for Boston.
“Our strategy oftentimes is to piggyback off the strategies of the carriers.”
Mr Lamb said the consultants preferred to develop services already in place rather than try to bring in competitors.
Citing the London example, he said: “We have a good partnership with British Airways. We would first look to existing carriers to make them more successful, before looking to competition as a solution.”
•To read the BTA statement on this week’s meetings, click on the PDF below “Related Media.”
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