Hartford Business Journal

www.HartfordBusiness.com April 25, 2016 • Hartford Business Journal 15 JUNE 9TH 1 6 T H A N N U A L Media Partners: Produced By: Presented By: Platinum Sponsors: SYSTEMS Event Technology Solutions www.prosystems.tv Gold Sponsors: Event Partners: CT CONVENTION CENTER • HARTFORD CTBEXPO.COM LIKE US ON Supporting Partners: EVENT & TRAVEL PARTNERS BE A PART OF CONNECTICUT'S LARGEST LIVE BUSINESS EVENT OF THE YEAR! For exhibiting information please contact Jessica Baker at jbaker@HartfordBusiness.com or 860-236-9998 x122 from page 1 resolve, as well as the commitment of busi- ness and leisure travelers, to sustain over- seas flights that last flew from Bradley to Europe eight years earlier. Central to Aer Lingus' decision to acti- vate four-day-a-week 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 Con- necticut provided the airline. Such financial incentives, airline-indus- try 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 than travel gateways. Few appreciate that more than Kevin Dil- lon, 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 com- pete 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.'' With millions of dollars of capital sunk into aircraft, airport gate and land- ing fees and staffing, airlines want more tangible assurances of at least a minimal return on their invest- ments, Dillon said. That's why, said Aer Lingus Chief Com- mercial Officer Keith Butler, the $9 million revenue guarantee from the state Depart- ment of Economic and Community Develop- ment 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 eco- nomic-development ambitions. In recent years, Aer Lingus has invested mil- lions, Butler said, to reposition its Dublin base as a hub for its flights of Boeing 757 and Airbus A380 jet- liners from the U.S. and other overseas destinations to deposit passengers, who then board its short-haul, Boeing 737s to destina- tions throughout Europe. Bradley, meanwhile, has been slowly rebuild- ing 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 host - ed scheduled service to and from Amster- dam, Netherlands, through a joint ven- ture of former North- west Airlines in the U.S. and KLM Royal Dutch airlines. Expanded coast- to-coast and inter- national flights are particularly impor- tant to Connecticut's business commu- nity, which for years have lamented the pau- city 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 rev- enue 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/air- port 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 large- ly 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 gather- ing 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 Hart- ford-Dublin service among Emerald Isle air trav- elers, 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 fruit- ful, 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. In a further bid to make its Connecticut service more attractive vs. flights originating from Boston or New York, Aer Lingus is tout- ing its Dublin status as a pre-customs clear- ance 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 empha- sizing the easier customs-clearance feature to the companies and businesses that com- prise 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 Hart- ford region,'' Griebel said, which builds more passenger traffic and spurs more air routes. "It's in everybody's interest for this to succeed.'' n Airport, state incentives play a larger role Aer Lingus Fact Box • 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. • The smallest aircraft in its fleet is the Airbus A319. • The most common aircraft in its fleet is the Airbus A320. • It plans to fly Boeing 757s config- ured to carry 177 passengers to and from Bradley. Bradley Airport 2016 Traffic Stats (Jan.-Feb.) 2016 2015 % Change Enplanements 431,148 419,224 2.8% Deplanements 422,923 406,624 4.0% S O U R C E : B R A D L E Y I N T E R N A T I O N A L A I R P O R T Keith Butler, Aer Lingus Chief Commercial Officer Kevin Dillon, Bradley Airport's CEO; executive director of the Connecticut Airport Authority. P H O T O | C O N T R I B U T E D

• Cover