Asia-Pacific, however, will be the biggest driver of passenger demand between 2015 and 2035, according to IATA’s 20-Year Air Passenger Forecast. The association expects that more than half of all new passenger traffic will come from the region and that by 2035, 1.8 billion more passengers per year will travel to, from, and within Asia-Pacific for an overall market size of 3.1 billion. Of the five fastest-growing markets in terms of additional passengers per year over the forecast period, four will be from Asia, including China, India, Indonesia, and Vietnam (in addition to the U.S.).
IATA expects that China will become the world’s largest aviation market, as defined by traffic to, from, and within the country, in about 2024, displacing the U.S. India is set to knock out the UK for third place in 2025, while Indonesia is expected to displace Italy out of the Top 10 the same year.
The strong emergence of low-cost carriers—a number of which now offer long-haul flights—is driving the bulk of this passenger growth. As recently as 2013, only about 29 percent of the U.S. domestic market had access to ultra-low-cost carriers. In 2018, that number almost doubled to 56 percent. Some ultra-low-cost carriers, such as Allegiant, Frontier, and Spirit, have increased their number of flights by 91 percent.
Low-cost carriers have shifted the landscape for air travel in the Asia-Pacific region as well. According to the Centre for Aviation, low-cost carriers now account for more than 50 percent of domestic capacity in India, Indonesia, Malaysia, the Philippines, South Korea, Thailand, and Vietnam and more than 30 percent of international capacity in Malaysia, Indonesia, Macau, Singapore, South Korea, and Thailand.
The rise in the number of secondary airports outside of major hubs is also contributing to accessibility. For example, New York Stewart International Airport, Oakland International Airport in California, and Fort Lauderdale-Hollywood International Airport in Florida are now rising competitors to their larger primary airport counterparts.
Secondary airports tend to experience fewer delays and schedule disruptions, are easier for travelers to navigate, and have more room for expansion. As passengers grow increasingly frustrated with the congestion problems and delays that major airports deal with, many are seeing the appeal. Airlines are getting on board as well since secondary airports are also less costly to serve, expanding the options available at these smaller airports.
Solving the Competition Conundrum
The rise in low-cost airlines combined with the growth of secondary airports has created the perfect storm for “swing travelers”—or people who choose to fly from an airport other than the one in their local town or city. This causes what’s often called “airport leakage.”
These travelers may drive two hours to a different airport to save some money on airfare, have an easier check-in process, or experience better airport dining opportunities. Whatever the impetus, they’re not worried about staying loyal to their local airport if they find better selling points at an airport further out.
The more options there are for lower fares and convenient airport services elsewhere, the more airport leakage there is. But this isn’t necessarily a bad thing for airports if they get their marketing strategy right. Whether large or small, airlines, airports, and other players in the sector should look to partner with groups offering access to qualified audiences at scale.
For example, first-party data from Expedia Group indicates that “airports listed on Expedia Group’s point-of-sales saw significantly more ticket purchases from swing travelers. In fact, swing travelers transiting through small hub primary or non-hub primary airports purchase, on average, seven times more than the number of tickets purchased by travelers loyal to their airport.”
For instance, Lincoln Airport, Nebraska’s second-largest airport, worked with Expedia Group Media Solutions to create a custom landing page to stand out among competitors, which offered an inside look at the airport’s comprehensive offerings, ranging from its travel routes, parking options, and dining options.
Appleton International Airport (ATW), located in Outagamie County, Wisconsin, also worked with Expedia Group Media Solutions to create a campaign consisting of ads spanning multiple pages across chosen sites, from the homepage to the search results page. The campaign successfully engaged with swing travelers, achieving a 40 percent year-over-year increase in demand for air tickets, click-through-rates for marquee ads that performed at twice the benchmarked goal, and higher awareness of the airport as a viable and cost-effective alternative to other airports in the surrounding area.
In a partnership with Auckland Airport and Mastercard, Hawaiian Airlines — the tenth largest commercial airline in the United States — also turned to Expedia Group Media Solutions to promote their route between Honolulu, Hawaii and Auckland, New Zealand in late 2017 and early 2018. By analyzing Expedia Group’s first-party data and Hawaiian Airlines’ data, an integrated advertising campaign targeting U.S. travel buyers across all U.S. Expedia Group points of sale was created. The campaign ran on-site display ads targeted to travelers searching for specific airline routes based on first- and third-party customer data, incorporated email marketing to reach potential travelers, and a special Mastercard promotion offered shoppers a $200 Mastercard gift card with their Hawaiian Airlines-via Auckland Airport route purchase as an incentive.
The campaign was a success, garnering a 40 percent increase in passenger demand between U.S. mainland hubs and Auckland between August 2017 and March 2018, and Hawaiian Airlines saw passenger demand rise 20 percent for routes between Hawaii and Auckland.
According to Expedia Group, billions of flight searches occur across its platform annually. Airports, airlines, and other providers in air travel that are intent on attracting these travelers can take advantage of Expedia Group’s billions of data points based on traveler behaviors and powerful, custom audience segments. Advertisers can use these insights and targeting capabilities to reach the right travelers at the right place and time at scale. about how aviation marketers can leverage custom digital marketing strategies.