April 25, 2016

Why Bradley won its airport tug-of-war for Aer Lingus

PHOTO | Contributed
PHOTO | Contributed
Connecticut's largest airport emerged the victor to land Irish flag carrier Aer Lingus, which begins trans-Atlantic service from Bradley Airport this fall.
Keith Butler, Aer Lingus Chief Commercial Officer
PHOTO | Contributed
Kevin Dillon, Bradley Airport’s CEO; executive director of the Connecticut Airport Authority.

Facts About Aer Lingus

  • Aer Lingus is owned by London's International Airlines Group, also parent to British Airways, Iberia, and Vueling.

  • The largest aircraft in its fleet is the Airbus A330-300, which seats 24 in business class and 298 in economy.

  • The smallest aircraft in its fleet is the Airbus A319, which seats 144.

  • The most common aircraft in its fleet is the Airbus A320, which seats 166.

  • It plans to fly Boeing 757s configured to carry 177 passengers to and from Bradley International Airport.

When Aer Lingus launches trans-Atlantic service from Connecticut's Bradley International Airport to its Irish home turf in September, more will be at stake than trying regularly to fill seats for its nonstop, seven-hour flights.

It, too, will be a further test, observers say, of Connecticut's resolve, as well as the commitment of business and leisure travelers, to sustain overseas flights that last flew from Bradley to Europe eight years earlier.

Central to Aer Lingus' decision to activate daily flights to-and-from its main Dublin, Ireland, hub to Bradley, one of its senior executives says, was the two-year, $9 million revenue stop-loss guarantee Connecticut provided the airline.

Such financial incentives, airline-industry observers say, have gained momentum in recent years, particularly among second-tier air hubs like Bradley. Its use also reflects the reality that airports, both domestic and abroad, are as much catalysts for economic development as travel gateways.

Few appreciate that more than Kevin Dillon, who is Bradley's CEO as well as executive director of the Connecticut Airport Authority that oversees the Windsor Locks airfield.

"We are in a very competitive business. I've often tried to explain to folks that we compete with other airports in the [New England] region for passengers," Dillon said, referring to Boston's Logan International and New York's Kennedy International and LaGuardia airports. "We're also competing with other airports in the country for a limited number of aircraft.''

Capital cost of airline expansion

With millions of dollars of capital sunk into aircraft, airport gate and landing fees and staffing, airlines want more tangible assurances of at least a minimal return on their investments, Dillon said.

That's why, said Aer Lingus Chief Commercial Officer Keith Butler, the $9 million revenue guarantee from the state Department of Economic and Community Development was vital to the carrier's decision to serve Bradley.

"We have so many options, so we try to position those aircraft in places where we think we can make money,'' Butler said during a recent Hartford stopover. "Anything that can be factored in to de-risk that decision is welcomed.''

Both Bradley and Aer Lingus have economic-development ambitions. In recent years, Aer Lingus has invested millions, Butler said, to reposition its Dublin base as a hub for its flights of Boeing 757 and Airbus A380 jetliners from the U.S. and other overseas destinations to deposit passengers, who then board its short-haul, Airbus A320 and A321 planes to destinations throughout Europe.

Fighting paucity of BDL destinations

Bradley, meanwhile, has been slowly rebuilding its roster of flight destinations to include not only Ireland, but more recently the re-launch of service to Los Angeles. Until 2008, Connecticut's flagship airport hosted scheduled service to and from Amsterdam, Netherlands, through a joint venture of former Northwest Airlines in the U.S. and KLM Royal Dutch airlines.

Expanded coast-to-coast and international flights are particularly important to Connecticut's business community, which for years has lamented the paucity of such service at a time when so much of this state's commerce occurs on a global scale, industry observers say.

But airline consultants and others say so-called "second-tier'' airports, such as Bradley, must pony up incentives like the revenue stop-loss guarantee, and/or be willing to temporarily waive the landing-rights and gate fees they charge airlines, to compete with first-tier airfields whose locations and high passenger counts make them preferential.

Incentives have been effective. Airline/airport consultant Dean Hill, who has been a paid adviser to Bradley the past two decades, points to Pittsburgh's airport, which offered Delta Air a revenue stop-loss guarantee in exchange for launching service to Paris, France. In 2009, Hill said, with the U.S. economy deep in recession and Paris passenger traffic dwindling, Delta tapped the guarantee to cover a small loss on its Paris service, which remained intact.

By the third year of service, with the economy in recovery, the Paris route was profitable for Delta. Had Delta not had the route-revenue guarantee, Hill said, the airline "most likely would have cancelled that flight very quickly and never come back."

"That's a huge victory for a community,'' said Hill, president of Campbell-Hill Aviation Group LLC, of Alexandria, Va.

Second chance

Success this time around for Connecticut's trans-Atlantic airline service will hinge largely on support and engagement from the state's and the New England region's business and corporate community, Hill and others say.

To that end, Aer Lingus has made outreach to them a priority, beginning with a corporate meet-and-greet event with the Springfield business community earlier this year. In early April, the Irish carrier held a similar gathering in downtown Hartford, serving up hors d' oeuvres, wine, beer and face time with Butler that drew some 200 to The Society Room.

Aer Lingus, too, brings some meaningful assets to its partnership with Bradley and Connecticut, Butler said.

For instance, the carrier is touting its Hartford-Dublin service among Emerald Isle air travelers, particularly with tourists and those with friends and relatives among the 4 million or so Northeast residents who claim Irish ancestry, he said. Aer Lingus is offering free roundtrip flights to and from Bradley as part of its promotion.

In its first 12 months serving Bradley, the airline expects to fill 105,000 seats on flights between Connecticut and Ireland, Butler said. The airline will operate Boeing 757s configured to carry 177 passengers; he declined to reveal how many seats it must fill to be profitable.

The possibility also exists, Butler said, that if its Connecticut service proves fruitful, Aer Lingus could increase its frequency of Hartford-Dublin flights, or ply the route with larger aircraft, such as the Airbus A380 wide-body that can carry 250 to 320 passengers.

Pre-customs clearance

In a further bid to make its Connecticut service more attractive vs. flights originating from Boston or New York, Aer Lingus is touting its Dublin status as a pre-customs clearance site. That means passengers returning to the U.S. via Bradley won't encounter the lengthy line and wait times that often exist to clear customs at larger airports.

MetroHartford Alliance CEO Oz Griebel said the regional chamber has been emphasizing the easier customs-clearance feature to the companies and businesses that comprise its membership. That alone, Griebel said, could make Bradley more attractive to international travelers.

However, it will require engagement from the business community as regular flyers on Aer Lingus and the new Los Angeles-direct service that will make them sustainable.

"You want that international service to attract companies to Connecticut and the Hartford region,'' Griebel said, which builds more passenger traffic and spurs more air routes. "It's in everybody's interest for this to succeed.''

CORRECTIONS: Aer Lingus will initially launch with daily service to Dublin, with the option to reduce to four days a week. The carrier plies its European short-haul routes with Airbus planes, not Boeing 737s.

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