In today’s challenging operating environment, it is no secret that many of the world’s smaller airports face a constant battle to hang on to their airline customers. When you are a tiny island located 1,770 kilometres off the east coast of the US and are viewed by the world as a luxury holiday destination, that task surely becomes even more difficult, as holidays are usually one of the first things put on hold during times of recession.
The fact that the gateway hasn’t lost a single carrier and was down by only one route this summer, a second daily American Airlines flight to New York JFK, bears testimony to the hard work of the airport’s management team as much as to the appeal of Bermuda.
True, like most airports, LF Wade International (BDA) has experienced a dip in passenger numbers over the past year, but airport general manager, Aaron Adderley, insists that this was not unexpected.
“The writing was on the wall towards the back end of 2008 and things could have been a whole lot worse if we hadn’t made protecting our existing business our priority going into 2009. I think we’ve done well enough considering the economic situation,” he says.
“A number of carriers were cutting back on ‘sun and fun’ leisure destinations like Bermuda, so we made a point to maintain all our lines of communication with our airline partners and do what we had to do to ensure service was retained. Those discussions proved quite successful.”
Importantly, BDA managed to keep all of its airlines and its destinations, which included “every major [US] East Coast city” and two Canadian cities, reveals Adderley.
North American airlines serving Bermuda include Air Canada, Delta, JetBlue, Continental, US Airways and USA 3000, between them providing a combination of services to Atlanta, Baltimore, Boston, Charlotte, Halifax, Miami, New York (JFK and LaGuardia), Orlando, Philadelphia, Toronto and Washington DC.
Indeed, American recently announced that it was to increase its Miami–Bermuda service from five times a week to daily flights.
Adderley is also particularly proud that British Airways has continued to operate its four-to-five-times weekly B777 service to BDA from London Gatwick.
While he admits that “yields are not what they used to be”, a problem that he says is reflected throughout the travel industry, he has no qualms in telling Airport World that BDA expects to resume growth as soon as economic conditions stabilise.
A hopeful sign, according to Adderley, is the fact that BDA’s all-important US market has started showing encouraging economic signs.
“We’re quite optimistic going into 2010 and are actively pursuing new services, which we’re hoping to have in place by next spring and certainly by the peak [summer] season,” he says. “Our objective is to introduce competition on existing non-competitive routes, as well as service to new gateways.”
The airport has three strategic priorities. One is to see competition on several North American routes or to launch new ones; a second is to encourage new service from the UK or Europe; and the third is the recognition that “we need to strengthen ties to our neighbours in the south” in the Caribbean.
“Service, even limited, from the Caribbean would be helpful,” says Adderley, because Bermuda is active in the Caricom grouping of nations.
Signs exist that BDA could make progress on all three fronts when the economic climate permits, he believes. Although United Airlines dropped its three-year-old BDA service from Chicago in early 2008 because Bermuda couldn’t afford the financial assistance the airline sought as fuel prices soared, United was achieving a 70% average load factor and one day the Chicago service could resume, says Adderley.
Some time ago, low-cost Spirit Airlines served Bermuda from Detroit, via New York LaGuardia, and Adderley confesses that the gateway hasn’t given up on the possibility of winning the carrier back.
“They didn’t maintain the flight but we did keep in touch with them and both parties are interested in renewing, going forward,” claims Adderley. “I think we will reach a point where we will see Spirit back here.” Meanwhile, as far as Europe is concerned, “the biggest challenge is finding the right airline with the right-size equipment,” he says. Munich Airlines operated one season of charter service with a 48-seat, all-business-class widebody, but a different configuration may work better in the future. “I think the opportunity is there for a successful route out of Germany,” says Adderley.
One regret – particularly since Bermuda is hosting the ACI World Assembly in November 2010 – is that economic realities and competing national infrastructure needs have forced Bermuda’s government to slow development of the airport under a 20-year masterplan prepared by HNTB and accepted by the cabinet.
As a result, construction of the new terminal that BDA was hoping to showcase for the ACI World Assembly probably won’t begin before the event.
“We’ve had to take our foot off the accelerator,” admits Adderley. “It’s a tough task to be asked to address all [the infrastructure improvements] simultaneously. But so as not to lose all momentum, we’re moving forward on the planning stages for those enabling projects we would have to undertake as part of the first phase of the masterplan.”
These enabling projects include repositioning the existing airport access road to accommodate the eventual construction of a larger, nine-gate new terminal; improving the airport’s utility services; and building a new cargo facility, because the new passenger terminal will displace the current one.
Another step is building a new bridge to replace the 138-year-old causeway across Castle Harbour that brings the road from the main island of Bermuda to St David’s Island, where the airport is located. “That’s not being driven by our department, but it still affects us,” adds Adderley.
Completion of the airport’s development could also be affected by the outcome of the next general election in Bermuda in two or three years’ time. However, enlarging the airport would produce “a number of revenue streams” that could potentially entice private investment, allowing development to be accelerated – assuming the government agreed to the airport’s partial privatisation.
While masterplan progress is slow, Adderley claims that the gateway is “doing quite a bit of investment” in upgrading the airside infrastructure. BDA has, for example, invested in a new ILS approach to its single runway and replaced its runway lighting.
But the airport authority has to balance spending on maintaining its existing facilities with the investment needed for development of new ones. “We’re going to have to walk that tightrope until the new terminal is completed,” muses Adderley.
Bermuda may be a tropical paradise to some, but it seems unlikely that any of the airport’s management team will be getting in much ‘beach time’ until the world economy picks up and BDA is once again enjoying solid traffic growth.
Airport World 2009 - Issue 5