International Air Service Development at

Boston Logan
June 7, 2012
 Presentation Overview

 Logan Today

 How Massport Identifies Opportunities

 What Airlines Look For

 How Massport Won JAL Service to Tokyo

 Next International Targets

 How You Can Help

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Logan International Airport Today

 Record 28.9 Million Passengers in

2011 – Up 5.4% Y/Y
 Ranked as 3rd Fastest Growing
Airport in the United States –
Up 5.2% in 2012 YTD

 Served by 34 Air Carriers

 Including 18 Foreign Flag Carriers
and 6 Low-Fare Carriers
 High-Value Cargo Market

 Not Dominated by Any Carrier or

Any Airline Alliance
 Not a hub for a U.S. carrier
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Boston Logan Has Nonstop Domestic Service
to 72 Destinations

Note: Includes Seasonal Service, Source: OAG & Innovata Schedules 4

 Boston Logan has Nonstop International Service
to 31 Destinations

Reykjavik

Dublin
Amsterdam
Shannon London LHR
Frankfurt
Paris Munich
Ottawa Montreal Zurich
Toronto Halifax
YYZ & YTZ
Rome
BOS Terceira Madrid
Lisbon
Ponta
Tokyo Delgada
NRT Bermuda

Nassau Providenciales
Cancun Santiago Punta Cana
Montego Santo St. Maarten
Bay Domingo Praia
Aruba

Note: Includes Seasonal Service, Source: OAG & Innovata Schedules 5

Massport Has a Focused, Thorough and Proactive
Route Development Strategy

 Use Industry Data Sources, Analyze, Identify and Prioritize

Market Opportunities and the Airlines/Alliances Best
Suited to Succeed

 Monitor and Influence Federal International Regulatory

Matters Affecting Boston Air Service

 Connect Worldwide to Meet with Airlines and to

Participate in Industry Conferences

 Partner with Government, Businesses, and Educational

Institutions to Win New Airline Service

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In Selecting New Target Markets for International Service,
Massport Considers a Number of Factors Before
Approaching Airlines

Largest BOS International O&D Markets Without Nonstop Service

YE 2Q2011

O&D Average Global Airline Adequate

Rank Market Passengers Fare Connecting Hub Aircraft

1 Tokyo 69,187 $1,141  

2 Barcelona 60,321 $440

3 Shanghai 57,816 $937  *
4 Tel Aviv 56,949 $674 
5 Beijing 56,893 $778  *
6 Vancouver 54,387 $320  
7 Athens 50,984 $460
8 Hong Kong 50,741 $1,133 
9 San Jose 49,788 $248  
10 Guatemala City 47,627 $238 
11 Seoul 45,390 $908  *
12 Mexico City 42,613 $262  
13 Sao Paulo 39,202 $739 
14 Mumbai 38,510 $726  *
15 Delhi 34,028 $791  *
*Orders Pending 7
 Airlines Are Attracted to the Strength of the
Market Served by Logan

 7th Largest Metropolitan Area in the U.S.

 5th Highest Per-Capita Income in the U.S.
 Worldwide Leader in the Diverse, High-Value Industries
 Finance,
 Healthcare,
 Consulting,
 Higher Education,
 Biotechnology,
 Telecommunications,
 Technology

 Nation’s Center of Education and

Innovation Due to 270 Colleges and
Universities in New England
 Attractive Tourist Destination With
Over 20 Million Annual Visitors

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While Airports Are Able to Influence Airline Decision Making
About New Routes, the Final Say Rests with the Airline
– and It Is Almost Always Based on Profitability
 Competitive Profile
 Major origin and destination traffic (as opposed to connecting)
 Significant percentage of business and first class passengers
 Expected route profitability compared with other route choices
 Strategic fit with airline/alliance route network
 Presence of significant high-value cargo market
 Aircraft in fleet appropriate to serve the proposed route

 Comparison to Other Market Options

 Opportunity cost
 Willingness of airport/community to share risk at beginning of service
 Integration with economic and tourism development partners
to ensure success after service start
 Presence of relevant ethnic population
 Airport costs

International airlines are risk averse – In selecting new markets

they look for key market attributes and business model fit
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 How Do We Win in Such a Competitive
Environment?

The JAL Example

 An Unserved Market with No Existing
Carrier to Compete for Passengers

 The Right Aircraft

 An Airport Incentive Program

 The Asia Task Force Connected

the Customers to the Carrier

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 For JAL/AA, many other cities within the 787 range
of Tokyo were candidates for new service

Amsterdam
Munich
Vienna Seattle
Milan
Shenyang Toronto
Boston
Barcelona Rome Istanbul
Washington DC
Qingdao San Francisco
Jeju Tokyo

Fuzhou
JAL/AA Annual
Saipan
Rank Market Passengers

Cebu
1 San Francisco 431,000
2 Denpasar-Bali 247,057
3 Saipan 233,523
4 Rome 194,811
Denpasar-Bali
5 Mactan 163,681
Cairns
6 Milan 156,578
7 Istanbul 149,051
8 Jeju 139,432
9 Munich 134,994
10 Seattle 133,253
11 Cairns 132,678
12 Qingdao 118,632
13 Washington 116,989
14 Amsterdam 111,571
15 Vienna 102,898
16 Barcelona 100,736
17 Las Vegas 99,247
18 Shenyang 95,553
19 Fuzhou 88,075
20 Toronto 86,794 11
21 Boston 85,005
The New Generation Aircraft Made Boston a Competitive
Option for Nonstop Service to Asia, and the Economics of
the Tokyo Route Look Promising

B787 and A350

 Designed for Mid-Sized Markets
– 200-250 Seats

 Fuel-Efficient Aircraft

 Ability to Fly to Long-Distance Markets

Fully Loaded from Shorter Runways

 Boston is Now in the Running for Service to

New Regions of the World

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 Massport Created an International Air Service
Incentive Program to Help Attract and Support
New International Flights to Logan

Boston Logan International Air Service Incentive Program

 Targeted to New Destinations in:
 Asia/India
 Mideast/Africa
 Central America/South America and Mexico City

 Requires Nonstop, Year-Round Scheduled Air Service, Operated

at Least 4 Roundtrips/Week, Continuously, for at Least 1 Year

 Financial Incentives Include:

 Landing fee rebates
 Marketing support
Nearly every international airport in
the world offers financial incentives
for new/expanded air service

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 Massport Created the ‘Asia Task Force’ to Help
Attract and Support New Nonstop Service to Tokyo

 Members Include Top Executives from the 250+

Massachusetts and New England Companies and
Organizations Which Travel Extensively to Japan
and Asia

 Surveys and Discussions With Asia Task Force Members Provided

Key Information On Travel Demand to Japan and Asia
 Including members’ overwhelming support for nonstop service over
their existing frequent flier club benefits

 In Early 2011, Massport Arranged Separate Meetings Between the Asia

Task Force and Two Airlines Interested in Serving Boston from Their
Respective Tokyo Hubs
 Japan Airlines’ top executives were impressed to hear directly from their
‘future customers’

Massport plans to use this Asia Task Force

‘template’ for other new international targets
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 Massport is Focusing on These Top
International Opportunities

Beijing / BOS
Shanghai
Tel Aviv
Dubai / Delhi /
Abu Dhabi / Mumbai
Mexico City Qatar

Sao Paulo

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 Nonstop Service to China is Now Our Top Priority: Boston is the
Largest Unserved U.S. Market for Both Beijing and Shanghai – and the
4th and 7th Largest Unserved Global Market from These Cities
 Strategy
 Continue discussions with 4 Chinese carriers and CAAC
 Air China, China Eastern, China Southern, Hainan
 Educate Chinese carriers and CAAC about economic relationship between
Massachusetts and China
 Retained dedicated China market representative
 Demonstrate success of Boston–Tokyo

 Targeted Start Date – 1Q 2015

 Challenges
 787 Delivery Schedule
 U.S.–China Bilateral Agreement
 Difficulty in obtaining visas for
Chinese nationals
 Limited awareness of Massachusetts beyond
Harvard/MIT
 Cities around the world are aggressively pursuing
service to China
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 Other International Targets

 Mexico: Mexico City

 Carrier Targets: AeroMexico, Volaris
 Targeted Start Date: 2Q 2013

 Israel: Tel Aviv

 Carrier Target: El Al
 Targeted Start Date: 4Q 2014

 Middle East: Dubai, Abu Dhabi or Qatar

 Carrier Targets: Emirates, Etihad, Qatar
 Targeted Start Date: 2Q 2015

 Brazil: Sao Paolo

 Carrier Target: TAM
 Targeted Start Date: 4Q 2015

 India: Delhi/Mumbai
 Carrier Targets: Jet Airways, Air India
 Targeted Start Date: 2Q 2016
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 The Regional Economic Impact of New
International Service is Significant

Economic Impact of
New Intl Market New Intl Air Service
From BOS (millions)

Beijing $113

Delhi $98

Mexico City $57

Sao Paulo $94

Tel Aviv $46

Tokyo $187

Total New Markets $595

Source: ICF SH&E Analysis

Note: Annual numbers, steady state, may not add due to rounding
Economic Impact figure includes: Direct, Indirect, and Induced economic impacts, as well as Income and Sales Tax 18
 Working Together, Logan Can Secure Valuable
Air Service to New Destinations

 Broaden the Business Case Beyond the Standard Airline Data Sources

 Build Air Carrier Awareness of the Economic Relationship Between

New England and Our Target Markets

 Identify Top Business Customers and Strategically Connect Them to

the Air Carrier Through a Coordinated, Organized, Efficient Effort

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 Massport Contact Information

David Mackey Betty Desrosiers

Interim CEO and Executive Director Director of Aviation Planning and Strategy
DMackey@massport.com BDesrosiers@massport.com

Edward Freni Yil Surehan

Director of Aviation Director of Airline Route Development
EFreni@massport.com YSurehan@massport.com

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