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Reporting from Terrapinns Regional Airports World Asia Pacific 2011

Better deals for airlines as airports battle it out

Ollie Quiniquini, Singapore (2011-01-27)

A BUYER'S market is emerging in the aviation industry as secondary airports woo legacy airlines and low-cost carriers (LCCs) with incentive schemes and enhanced operations.

Centre for Asia Pacific Aviation executive chairman Peter Harbison noted that airlines now have more clout when negotiating charges, as smaller airports “come up with deals because they are keen to get more clients”.

Steven Fitzgerald, Wellington Airport's chief executive, said: “Ten years ago, airlines assumed that airport charges were non-negotiable. Now, they ask for (discounts and incentives). They can shop around.”

LCCs are far more aggressive when it comes to negotiations, Fitzgerald revealed. “Legacy carriers move capacity to predetermined routes and seek good deals, while LCCs go where the better deal is. LCCs have an idea of where they want to fly, but where they land would depend on the economics.”

According to Fitzgerald, the winners tend to be airports that have a destination base, offer incentives to carriers, and bring down airlines' operating costs by reducing turnaround time, providing technology to facilitate work processes and assisting with marketing deals to promote some routes.

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