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31 Jan 2017

BY Edward Robertson

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Florida: Getting a handle on the future

A new president offers potential for change and the US, Florida’s tourist board and some of its airports remain hopeful that Donald Trump will not impinge on their ongoing business of growth.

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Three big organisations in Florida talk about the future of the Sunshine State's travel business

1. Greater Orlando Aviation Authority

1. Greater Orlando Aviation Authority

Philip N Brown, executive director

 

What are the key issues facing Florida’s aviation market?

One of the major issues facing Florida’s airports is the population growth in the region and the ability to build to meet that demand.


The Passenger Facility Charge (PFC) funds building improvements and new facilities and is currently capped at $4.50. For airports to increase the pace of operations, we need the government to remove the cap, allowing airports to determine the charge.


Security is also key. We must continue to ensure safe and convenient travel for our customers by increasing staffing levels of the Transportation Security Administration and Customs and Border Protection.


We also need to secure reimbursement for airports that have bought explosive detection systems and allocate sufficient funding to deploy an adequate number of canine teams.


Other important issues include using fuel taxes to support general aviation operations and developing legislation requiring drone manufacturers to deploy technology to keep drone activity safely away from airports and out of the National Airspace System.

 

What is the most important thing president Trump can do to help US aviation?

The most impactful step the federal government can take is to provide sufficient appropriations to the Federal Aviation Administration for two key programs. The Airport Improvement Program needs to be fully funded at no less than $3.35 billion so Florida airports can maintain infrastructure development.


The Contract Tower Program also needs to be fully funded with a dedicated line item appropriation, as well as protected and maintained in the event of air traffic control privatisation.


Nationwide, aviation would benefit from a commitment from Washington DC to provide sustained funding for the technology and manpower that makes air travel safe and facilitates continued evolution in the industry.

 

What are your key opportunities for route development?

Orlando International Airport’s international route success has come predominantly from being a spoke of an international airline hub, like Lufthansa via Frankfurt, Air Canada and Westjet via Toronto, Emirates via Dubai, Copa via Panama City, Avianca via Bogota and TAM via Sao Paulo.


In addition jetBlue, Southwest and Delta offer some point-to-point international services from Orlando.


Routes on Orlando’s international unserved wish list include London Heathrow, Rio de Janeiro-Galeão International Airport, Narita International Airport, Amsterdam Airport Schiphol, Ezeiza International Airport, Shanghai Pudong International Airport and Beijing Capital International Airport.


Domestically, Sacramento International Airport, San José International Airport, Albuquerque International Sunport, Will Rogers World Airport and Oakland International Airport are all on our radar. We also work with all of our 38 scheduled airline partners to increase capacity and frequencies on existing Orlando routes.

2. Tampa International Airport

2. Tampa International Airport

Kenneth Strickland, director of air service development

 

What are the key issues facing Florida’s aviation market?

Through strong economic incentives spearheaded by our governor, Florida has successfully diversified its economy to ensure we are no longer as heavily reliant upon tourism.


Instead we have seen tremendous population growth driven by corporate investment and relocation – particularly in the Tampa Bay region, which hosts five of Florida’s 16 total Fortune 500 companies.


Corporate growth benefits Florida’s aviation market thanks to the ability to balance tourism traffic with an increasing share of local business passengers – particularly to Florida’s top international markets of Canada, the UK and Brazil, which have all experienced recent economic uncertainty. However, the state incentives that drive corporate growth are currently facing legislative challenges in the form of objections from state representatives who fail to understand the return on investment such incentives provide.


As such, supporting the funding of our regional economic development organisations is imperative to the future strength and diversification of Florida’s commercial aviation market.


What is the most important thing president Trump can do to help US aviation?

Two Tampa Bay area house representatives were instrumental in drafting the Restoring Local Control of Airports Act of 2016, which would allow US airports to seek passenger facility charge (PFC) rates in excess of the current federal cap of $4.50.


As PFCs are inherently user fees, rather than a tax, it is the hope of many airport executives throughout the country that the incoming administration will take up this issue to support airports in having a greater role in sourcing financing for capital development and other necessary facility improvements.


Airports are a vital component of the country’s infrastructure, particularly in an increasingly globalised world, and I am optimistic that the incoming administration’s expressed desire to support infrastructure development will bode well for our industry.


What are your key opportunities for route development?

Tampa International Airport has had tremendous success over the previous six years in recruiting international air services, more than doubling the number of international enplaned passengers.


However, Tampa Bay still maintains a comparative capacity to population deficit for international seats relative to other Florida markets. Scheduled service to Havana, which began in December, as well as Icelandair’s new service beginning in September 2017, will work to close that gap.


Additional opportunities for us include Mexico City and its beyond markets, where Tampa Bay maintains strong business ties, as well as additional European services, including to Manchester and Amsterdam.


On the domestic front we’re working to supplement United’s San Francisco service beginning in February with additional western capacity, including connectivity to San Diego, Portland and Salt Lake City and increased capacity into the Los Angeles market.

3. Visit Florida

3. Visit Florida

Alfredo Gonzalez, vice-president of international sales and global development

 

What is the most important thing president Trump can do to help US aviation?

This new president raises a lot of questions for people in the US and we certainly don’t know how a completely non-political person will address the position of president.


However, he’s a businessman that has made a lot of money in tourism from both hotels and airlines and he knows the incredible economic opportunity tourism provides to both the US and Florida.


We don’t exactly know what he’s planning to do in aviation but given who he is and what he has done in the past, we look forward to him continuing things that are in place like open skies agreements and not compromising them in any way.

 

Where do the opportunities lie for the development of Florida’s aviation market?

We have a lot of opportunities because we have major airports that are now expanding. Fort Lauderdale-Hollywood International Airport is about to finish its expansion of Terminal 4, which is a major international terminal.

 

They’re also building a brand new terminal at Orlando International Airport (which should be completed in 2019) and it is going to be huge for a market as big as Orlando’s.


Emirates started a new daily service in December from Dubai to Fort Lauderdale-Hollywood International Airport and we have got good growth there. The airline is also looking to upgrade to an Airbus A380 for Orlando International Airport, which would be the first one there.


We are looking at all the flights from Doha and Dubai and how they can help drive traffic, not just from Qatar and the UAE but from a far wider catchment area, using both of the destinations as golden funnels. That way we can get visitors in from as far afield as Thailand and Australia.


Passengers are channelling through to Dubai and Doha to get flights and we are going to make some effort to reach those markets. Orlando Sandford International Airport could also be a big player in the market thanks to its links with airlines such as Aer Lingus.

 

What is the split between international and domestic travellers coming to Florida and are you happy with it?

In 2016 the proportion of international travellers was 14.3% while the level of domestic travellers was 85.7%.


With 106 million visitors in the same period it is a very healthy split. Meanwhile, our Florida airports will have (further) capacity for international services so those percentage points will grow.


There were fears that after Brexit the number of visitors from the UK would drop. However, they have not materialised and we already notice that visitors from the UK are still very strong to the US and Florida will remain an attractive destination.


Nor are concerns that the strength of the dollar would diminish the number of tourists happening as we continue to add value to our product.

 

Given the number of new US routes going into Cuba, do you see it as a new competitor?

As far as being a tourism competitor it doesn’t have the infrastructure in place right now for Americans to inundate the market and it is not going to happen for a few yearsAmericans are not prepared for that product although in three to five years that could change dramatically, but right now we’re not concerned about it being a complication or a problem.

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