Adelaide Airport Update – New Arrivals And More Capacity Are Fruits Of Targeted International Marketing Campaign
Adelaide Airport managing director Mark Young highlights how a targeted international marketing campaign with other stakeholders is helping to deliver enhanced air connectivity, both through new flights and increased frequency and aircraft switches on existing routes. He highlights how the airport works as an inbound and outbound gateway to Adelaide, provides an update on the new airport hotel, notes how LCCs could play a key role in reducing customer leakage and acknowledges how technology is changing the airport experience.
Mark YoungI think there's opportunities mainly in increasing the frequency and also the product of some of the services that we have out of Adelaide. So recent examples of service capacity increases, we've seen [inaudible 00:00:25] go up to five a week to a daily. Sorry Qatar. We've got [inaudible 00:00:31] going up to 6 a week. We've got Singapore Airlines who've announced seasonal dailies, double dailies. So we're seeing capacity increases from our existing airlines and also we're seeing product enhancements.
So in New Zealand, for instance, who were flying an A320 are now flying a 787 on a five a week basis, which was up from three a week on A320s. So we're seeing both capacity increases, product increases, but also increasing the frequency of routes.
A lot of it has come down to, I think, the success of our targeted international marketing campaign, so we travel as a team with our tourism authority. We call ourselves Team Adelaide, and we promote the benefits that the visitor economy benefits in South Australia and also the business connections and the freight connections.
So it's a sustained marketing effort, really, at the end of the day with some targeted, focused analysis done for specific airlines. We try and target airlines that we think will strategically grow our business rather than cannibalize the existing business that's already there.
So it's all about trying to grow the market size. We do around about 1.4 million international passenger trips per annum out of Adelaide now and only a million of those, pleasingly a million of those, we just tipped over a million in June this year, but a million of those are directly in and out of Adelaide. So what that says is around 30% or 40% of our traffic, traveling internationally, but we can still go and get to see if we can lift them up and fly them directly in and out of Adelaide.
Medium to longer term for us, our real aspiration, is a direct West Coast U.S. service. There is an unstimulated market of about 140,000 passengers per annum on that route. It will be more once it's stimulated or once a direct service comes into play. So we're working hard on achieving that as our medium term aspiration.
In the shorter term, I think there's some real opportunities with looking at getting some low-cost direct services into Asia and also growing with our existing carriers. For instance, we have China Southern doing five a week now direct into Guangzhou. We think that can be beefed up to a daily and then look for other direct connections, Shanghai, for instance, out of Adelaide. So I think there's still plenty of opportunities there.
Airlines and people come to destinations; they don't come to airports. So an airport is a gateway to its market that it serves. So we operate at Adelaide Airport very much as the gateway to the state. We're the first thing that people see. We're the last thing that they often times will see. so we undertake, fit for purpose, infrastructure development to meet what we see as the reasonable growth demands coming up.
Just recently, we've announced a 165 million dollar expansion of our terminal, which is really all designed around enhancing and improving the international visitors outbound and inbound experiences. Because of the success of our growth, we need to invest to accommodate the future growth.
Our hotel is just about to open, first week of September. It's taken 15 months to complete the construction. It's Atura Hotel, which is out of the Event Group and very much looking forward to that opening up. It will provide 165 rooms of really good accommodation. It's directly connected into the terminal, the only one of its type in the country in terms of its connectivity to the terminal. We have a little saying, which is you can check out and check in, all at once.
Market size does grow. It also, in our view, can help stop leakage. In our case, as I said, there were 1.4 million international visitations in and out of ... international trips in and out of Adelaide in the year just gone. Only a million of those directly out of Adelaide.
So there's a market there and we think the low cost carrier has a large part to play in offering different product, different style of offering, and try and get into some of those 400,000 trips per annum that don't fly in directly internationally in and out of Adelaide. So they can help grow the market, but I think they can also help stop leakage through other ports.
Technology influences our business and the airlines' business at every single level, from digital engagement of our customers leading through to loyalty. But in terms of operations and in terms of the travel experience, I think one of the, hopefully better, regulatory changes that we can see because the technology is there would be to allow the reconciliation of the passenger internationally at the gate rather than go through a border process. I think that would make many terminals, particularly ours around the country, extremely even more efficient than what it currently is. So I think that's one area where technology could make a big difference to the passenger journey but we're already seeing ... We've seen a revolution in mobile technology. Everybody checks in using their phone these days.
We foresee, in the not too distant future, that there will be very few kiosks, for instance, in check in halls in the country because most people are checking in with their mobile phone. We only then have to get the bag tag side of things sorted out, propping into common use, self-service bag drops and really traditional check-in counters and even kiosks, I think, are on the wain rather than on the rise.
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