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Wet Leasing By Local/municipal Authorities?  
User currently offlinekaitak From Ireland, joined Aug 1999, 12593 posts, RR: 34
Posted (4 years 9 months 2 weeks 5 days 20 hours ago) and read 1344 times:

One idea for the development of air routes, to develop new markets in trade and tourism might be to arrange a wet-lease with specific airlines. Say, for example, City X is not getting links to major target markets, largely because airlines think it's much better to access it via a major hub; it makes sense from the airlines' viewpoint, BUT the city - and its economy - loses out. How do we rectify this?

1) Working with sectors of the economy which would benefit from a direct route, develop a package which could be put to airlines, with the aim of minimising the risk to the airline concerned. For example, one hotel might provide crew accommodation; another might (in co-operation with the local tourism authority) providing marketing and advertising assistance; exporters might guarantee to buy a certain % (or tonnage) of freight on the flight. When you put all these together, co-ordinated into one "package" - with a shelf company set up specifically to "operate" the package, it could help attract certain carriers.

2) The airline would provide the aircraft and the route; it would operate it as a normal, scheduled service, but the aircraft would, in effect, be wet-leased by the company. The cost - and risk - to the airline would be minimal; profits, if any, would be rolled back into the company, to help increase frequencies.

3) There would be a certain number of hubs identified, based on particular markets; say GRU for South America, MEX for Central America, DOH/DXB for M/E and SIN/BKK/HKG for SE Asia; each company would be established for a particular market; e.g. company 1 would focus on developing flights to Asia; company 2 for Africa etc, depending on what are seen as the most important markets.

4) By setting up a private company - without state involvement, it would avoid falling foul of EU competition rules, i.e. it would not be a subsidy as such; it is offered to all carriers (open competition), based on the extent of their reach to a particular market; the bigger the airline's hub, the more attractive.

Many economies, particularly in Europe, are facing economic problems; these countries - particularly (to use that beautiful acronym) "PIIGS" are having difficulty in attracting new business (although Italy is ok, so that just leaves PIGS!); a declining economy is a turnoff for most airlines, yet the need for these economies to have a direct link and visibility in major markets is arguably greater than ever, so something's got to give and if these economies want a direct link, they're going to need to co-ordinate their efforts to get them in place. It will take a risk, but it is worth it; initial plans may be problemmatic, BUT once it's honed and refined, it could be a useful template for developing routes in the future and maybe something of which airlines could take note. If there's a way to develop new markets with minimum risk on their parts, then surely that's something that will interest them.

2 replies: All unread, jump to last
 
User currently offlineLarshjort From Denmark, joined Dec 2007, 1524 posts, RR: 0
Reply 1, posted (4 years 9 months 2 weeks 5 days 20 hours ago) and read 1339 times:

http://www.wingsofeurope.com/mainmenu/the-formula.aspx

Wings of Europe provide a service where a local community can set up an airline easy withouthavingto invest in aircraft and everything else needed. AFAIK Wings of Bornholm works quite well.

/Lars



139, 306, 319, 320, 321, 332, 34A, AN2, AT4, AT5, AT7, 733, 735, 73G, 738, 739, 146, AR1, BH2, CN1, CR2, DH1, DH3, DH4,
User currently offlineCOSPN From Northern Mariana Islands, joined Oct 2001, 1651 posts, RR: 0
Reply 2, posted (4 years 9 months 2 weeks 4 days 22 hours ago) and read 1204 times:

someone has to put the money at risk ...and lots of it....

Its a good idea, but here are some of the problems...

Excessive airport charges...(Landing fees) not many airports willing to waive fees HNL did this a few years ago and it really helped tourism in Hawaii , but the airport is run by the State not the city..

Excessive Room or Hotel taxes hard to waive those...

Excessive Ground handling charges... If the airline is not from there someone will have to do the airport ground handling and it is expensive and hard to discount...

Its a great Idea but Airline Travel and Hotel stays are taxed at about 40% in the USA if you add up all the charges and fees...In Europe probally more, add in some Drinks and a smoke and its over 55%...

I think these are left over from the days that airline passergers were considered "Rich" so taxed much more than a train or bus PAX..."Fee fees and Tax Tax"


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