What’s the current situation at PHL following the COVID-19 lockdown?
Philadelphia International Airport is currently in a stage that we’re calling a “runway to recovery,” meaning that we’re planting the seeds of regrowth through operational adjustments and innovations, driving demand by enabling success for our airline partners, and using data to make the case for why PHL is positioned to thrive in a post COVID-19 world.
We have suffered from reduced capacity and low passenger rates since mid-March, and we are projecting several years before we return to the passenger levels of 2019. At our lowest point in April 2020, PHL was operating at less than 5 percent volume compared to 2019. This summer will only see a small fraction of international flights as well as reduced domestic capacity from all of the carriers at PHL, which is why our runway to recovery strategy is so critical.
How is the drive to rebuild the route network going?
The process of recovering our route network is going slow but steady. Our forecasting proved to be successful in that June and July have regained 30 and 50 percent of what we lost respectively. The accuracy of our predictions has helped us plan appropriately while keeping an eye out for new opportunities and what we call “bright spots” wins.
How are the conversations with your airline partners proceeding?
This is a difficult time for the airline industry as a whole, but our conversations with partners have been overwhelmingly positive. Airlines are managing their cashflow and constantly adjusting their business plans, and we have made sure to be a great partner by being proactive, consistent and opportunistic about their needs.
Frontier recently added service, and American is coming back strongly; what’s behind this success?
PHL is blessed with a strong, large and diverse catchment area of more than 6 million people, which is attractive to a wide variety of business models. We thrive with both our hub and ultra low cost carrier partners because we work to prove that the demand is here and there is high potential for growth.
What is the next phase in the runway to recovery?
Our COVID-19 Air Service Recovery and Incentive Program is aimed at driving fast recovery wins while creating economic stability for the Philadelphia region. We believe that the program’s innovation is tied to its early introduction to the market, combined with its aligning of priorities to incumbent and new entrant airline partners.
The program consists of two core components tailored specifically to the COVID-19 crisis: waiving select airline operating expenses and incentivizing strategic air service routes that will aid in the region’s recovery. It is available to international, domestic and cargo airline partners.
The program has a finite start and end date to ensure that progress and success are measured carefully against dynamics like travel restrictions and federal funding changes. The program could potentially extend until 2022 for maximum flexibility, as carriers navigate changes in traffic flows and demand.
It is critical to regain the types of services that were lost in order to position PHL in the future for additional growth opportunities. In addition, because PHL is a transatlantic hub, regaining previous levels of international growth will ensure that domestic traffic rebounds quickly as well.
Is this based on airline feedback, or your own initiative?
We talk to our airline partners frequently, so it became clear when certain trends started to emerge in their recovery processes. Since we know that our success is tied to theirs, we took the initiative to extend this gesture proactively, and tangibly.
What impact do you think the new program will have?
We believe that this rapid injection of relief and growth will jumpstart the entire airport ecosystem. From concessions to ground transportation to tourism and commerce, the halo effect of increased air travel will create immediate wins for all airport stakeholders.
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