Bristol Airport: Demonstrating Yield Premium to Low Cost Carriers – June 2017
Bristol Airport in the South West of England is the ninth busiest airport in the UK, handling 7.6 million passengers in 2016. The airport has an active and diligent aviation development team and, as such, has recognised that fully understanding their customers’ needs to be at the centre of their activities. Bristol Airport recently selected Network Grandstand to inform their account management and route development functions. Here we look at how our product has helped them perform their network development activities more efficiently.
Peter Downes, Head of Aviation at Bristol Airport explains:
Our aim was to demonstrate the ‘yield premium’ that we believed Bristol delivers over other markets. This, along with benchmarking to show where there is an un(der)served demand would give us the data to present compelling opportunities in sufficient detail.
Previously, carriers would often respond that, while traditional sources such as MIDT data might suggest that a route was viable, there was insufficient detail on yield.
We didn’t have a large team, so much of our work was reactive.
We asked Peter Downes what it was about Network Grandstand that impressed him:
Firstly, the way in which costs are allocated right down from company accounts to sector level is cutting edge. That, coupled with the high number of fare observations, gave us confidence that this is the best solution available on the market.
Secondly, we knew that there is no such thing as a typical yield curve. Fare observations at 10 points are critical for giving us insight into carriers’ pricing strategies.
Finally, being able to benchmark and measure consistently across our peer group has allowed us to see the bigger picture in a way that wouldn’t have been possible before.
Peter Downes describes the benefits of using Network Grandstand:
It has become increasingly important for us to be able to demonstrate internally the rationale behind our aviation strategy. The numbers don’t lie at the end of the day. Our shareholders recognise that this is a completely new way of looking at the market.
It has also helped in our discussions with carriers about new routes. There had been a perception that because we have a high number of LCCs that the market is low yield. We have been able to prove convincingly that this is not the case.
We also have plenty of forewarning about poorly performing routes. We are now on the front foot and have a firm handle on routes which require additional focus from our finite resources.
When carriers see that our data is consistent with theirs, that gives us increased impetus with new route discussions. We are no longer going off gut feel and instinct alone. Moreover, airlines appreciate the insight into the competitive environment in the Bristol area, which they don’t necessarily track themselves. If we give them a nugget of information then we have done our job.