Sunday, August 27, 2017

How Cleveland-Hopkins International Airport (KCLE) scored two routes to Iceland in one week

CLEVELAND, Ohio - Two weeks ago, executives from Iceland-based Wow Air came to town to finalize their plans to bring long-sought nonstop European service to Cleveland Hopkins International Airport.

Shortly after they left, another set of airline executives arrived: officials from Icelandair, also based in Reykjavik, and a fierce competitor of Wow.

Their visits set up an incredible week for the airport: back-to-back announcements from two European carriers, both eager to start flying across the pond from Cleveland.

"We wanted to make sure they weren't in the same hotel," joked Todd Payne, chief of air service development for Cleveland Hopkins.

Back-to-back visits from airline officials aren't that unusual, he said. "The fact that they were both from Iceland made it a little more interesting."

Shortly after their visit, officials with Wow and Hopkins started planning for a big Wednesday announcement at the airport, featuring Mayor Frank Jackson, Wow CEO Skuli Mogensen (via Skype) and others.

But 24 hours before that event occurred, Icelandair made an announcement of its own.

There were no balloons, no cake, just a press release on its website that announced the carrier's plans to start flying from Cleveland in May. No schedule was released; no tickets were on sale.

Industry analysts say it's likely Icelandair got wind of Wow's plans and sped up its timetable. A spokesman for Icelandair did not return a phone call last week.

"They wanted to get out there first, just so people would know they were there," speculated Mike Boyd, president and CEO of Boyd Group International, an aviation consulting firm in Denver.

He described Icelandair and Wow as fierce competitors: the young upstart (Wow) versus the established veteran (Icelandair). "I think we can assume that the two airlines don't exchange Christmas cards."

Though their business plans differ, both offer low fares and lots of connections to mainland Europe through Iceland's capital, Reykjavik.

Wow fares are very low, starting at $99, but with lots of extra fees; Icelandair offers somewhat higher prices that include checked bags and seat assignments, among other amenities.

Boyd said it's possible both airlines will be successful in Cleveland - the city sends hundreds of travelers to Europe every day, via numerous other airlines. Plus, he said, the two will stimulate tremendous new demand for travel to Europe from Cleveland, he said. "People who were going to go to Orlando or redo the bathroom are now going to take a trip to Europe."

It's possible, too, that one may dominate and one may falter, he said. Either way, said Boyd: "Cleveland wins. The more airlines go after each other's throats, the more consumers win."

Cleveland airport officials have been working to secure a nonstop flight to Europe since 2009, when Continental Airlines cancelled a route to London's Heathrow Airport.

Payne recalls that he first talked to Icelandair in 2011, at a World Routes meeting, an annual gathering of executives from nearly every airline in the world. He said Cleveland came close to landing Icelandair service several years ago, but the carrier chose Portland, Oregon, instead.

This past April, he pitched Cleveland again to Icelandair executives, at a Routes Europe meeting in Belfast, Northern Ireland. He was told Cleveland was high on the airline's list for expansion.

At that same meeting in Belfast, he met with officials from Wow, the ultra-low-cost carrier that started flying in 2012. Cleveland officials also had pitched the city to Wow several years before.

Last year, Wow announced it would start flying to Reykjavik from Pittsburgh International Airport in spring 2017. It was service Cleveland had hoped to land. A subsidy from the state of Pennsylvania may have tipped the scale for Pittsburgh.

Payne said he knew Cleveland's time would come. "We felt very good about the potential. When we didn't get Wow last year, we felt we would get somebody else - or they would get back to us."

And indeed, Wow did, asking Cleveland for additional supporting material and a package of incentives last spring.

Payne and new airport director Robert Kennedy made a trip to Iceland in June, continuing their pitch to Wow officials. Then in July, two representatives from the Greater Cleveland Partnership flew to Iceland, in an effort to determine whether the business community should offer financial support to land the service.

In the end, the airport offered Wow and Icelandair $500,000 each per year for two years to assist with marketing. The business community also pitched in, though Lee Thomas, with the Greater Cleveland Partnership, declined to say by how much.

Finally, two weeks ago, Wow executives came to Cleveland to see the city, tour the airport and make a final decision.

Shortly after, officials from Icelandair arrived in Northeast Ohio.

Kennedy and Payne had dinner with the Icelandair executives last Monday night at Michael Symon's Lola Bistro on East Fourth Street. At the meeting, Kennedy pitched the officials on the airport's increasing passenger numbers and improving customer service rankings.

"They told us that they had Cleveland as their primary selection and we could expect some news from them," said Kennedy.

That news came fast - faster even than airport officials expected. It came the very next morning.

Kennedy speculates that both airlines were motivated by Cleveland's strong numbers - airport traffic has been increasing steadily in the years since United Airlines pulled its hub from the city in 2014.

Importantly, the number of passengers who start or end their trip in Cleveland - so-called origin and destination traffic - now surpasses the number from the United hub days. In large part, that increase is due to stimulated demand from several new low-cost domestic carriers at Hopkins, including Spirit, Frontier, Allegiant and JetBlue.

International airlines, apparently, have taken notice.

Both Icelandair and Wow are rapidly growing carriers with an eye toward expansion in the U.S. market. Both are taking advantage of a new breed of airplane, small and efficient, that can fly longer distances.

Boyd, the analyst in Denver, said Cleveland will likely land additional flights to Europe in the coming years.

"There's certainly enough demand," said Boyd. "It's just a matter of time."

Meanwhile, airport officials will keep plugging away, pitching the city and the airport to any carrier that will listen. Kennedy expects additional air service announcements this year from existing domestic carriers, including Frontier and Southwest.

"It's a constant and continual effort," said Payne. One that paid off in a big way last week.

Original article can be found here ➤ http://www.cleveland.com

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