Commercial Air Service: Market Analysis

By james

May 1, 2018

Building the Case

Attracting commercial air service requires a rigourous understanding of the market’s air service market potential. Explorers’ Edge, Ontario’s regional tourism organization for Algonquin Park, the Almaguin Highlands, Loring-Restoule, Muskoka and Parry Sound, has retained InterVISTAS Consulting to analyze the air service market potential of the region, to be served from Muskoka Airport (“YQA”).

The process of attracting commercial airline service to the market area begins with understanding the air service market potential of the market. Typically, commercial airlines rely on publicly available industry data sources to understand passenger demand for air service trends between any two cities worldwide. However, in the case of markets without previous commercial activity, airlines themselves have little available sources at their fingertips to truly understand the market potential; airline network planners will need to rely on other data sources that are not typically easily accessible to them.

The objective of this study is to devise the true air service market potential of the Muskoka region to be served from YQA. The study will utilize available visitor data sources from government agencies, tourism organizations, as well as passenger surveys to understand market demand behaviour. As there is already robust demand for travel to/from the Muskoka region by ground transportation, a key component of this study will be to determine the propensity for air travel should a commercial air service be introduced at YQA.

To achieve the study’s objectives, this report will cover the following areas:

The Airline Decision Making Process – Overview of the airline decision making process.
Muskoka Air Service Market Potential at YQA – A rigourous, defensible, conservative approach to determine the air service market size potential of the Muskoka region at YQA using significant new and current qualitative research.
Risk-Sharing and Incentive Frameworks – Review of airline risk-sharing and incentive structures and its applicability in attracting air service to the Muskoka region.

CLICK HERE to access the full (PDF) report

SURVEY RESULTS

YTZ Billy Bishop Inbound Survey Results
(Please contact [email protected] to request complete research deck)

A survey of people in the GTA, in order to gauge market receptiveness to flight service between Toronto Island City Centre Airport (YTZ) and Muskoka Airport (YQA). The survey was conducted by Environics using their proprietary survey panel with a sample size of 311.

Results Summary: Overall, the results are very encouraging and suggest there is an opportunity to be exploited:

26% of respondents said “Yes”
38% said “Maybe”
Total “Would Consider” is 64% (26% “Yes” + 38% “Maybe”)

Receptiveness to flying from TIA to MA is highest among:

Toronto residents
Cottage owners
Frequent visitors (5 times or more per year)
High household income ($200K+)
25 to 49 year olds
Singles

Overwhelmingly, respondents say avoiding traffic is the number one reason for choosing the flight option. Most respondents predisposed to flying say they would be willing to pay $200 to $300 for the return fare.

YQA Muskoka Outbound Survey Results
(Please contact [email protected] to request complete research deck)

A survey of people in the Muskoka, Barrie and Orillia subregions, in order to gauge market receptiveness to flight service between Muskoka Airport (YQA) and Pearson International Airport (YYZ) amongst travelers in the these subregions. The survey was conducted by Environics using their proprietary survey panel with a Sample size – 203.

Results Summary: Overall, the results are very encouraging and suggest there is an opportunity to be exploited:

58% of respondents said “Yes”
23% said “Maybe”
Total “Would Consider” is 81% (58% “Yes” + 23% “Maybe”

Receptiveness to flying from YYZ to YQA is highest among:

Orillia residents
Cottage owners
25 to 49 year olds

UK Inbound Survey Results
(Please contact [email protected] to request complete research deck)

A survey of people in the UK, in order to estimate a willingness to visit RTO 12 and receptiveness to accessing the region via flight service between Pearson International Airport (YYZ) and Muskoka Airport (YQA). The survey was conducted by Environics using their proprietary survey panel with a sample size – 250.

Overall, the results are very encouraging for Muskoka Airport and suggest there is an opportunity to be exploited:

17% of people surveyed in the UK are interested in visiting Canada (comparable to a market size of 11 million ppl)
Of those 72% say they have visited, or would be interesting in visiting, Ontario
Of those interested in visiting Canada, almost all would be interested in visiting the Algonquin-Muskoka region:
81% said they would consider it as a primary destination

Receptiveness to flying from Pearson International to Muskoka Airport is high:

91% of respondents interested in visiting Algonquin-Muskoka would choose, or might choose to fly, to the region from Toronto
Convenience is cited as the most likely reason to choose flying over driving
46% of respondents would be interested in paying £200 or more to fly to Algonquin-Muskoka
95% say that inclusion in a package would make, or might make, the trip to the region more appealing

YYZ Pearson Southern Ontario Inbound Survey Results
(Please contact [email protected] to request complete research deck)

A survey of people in southern Ontario, in order to gauge market receptiveness to flight service between Pearson International Airport (YYZ) and Muskoka Airport (YQA). The survey was conducted by Environics using their proprietary survey panel with a sample size – 500.

USA Inbound Survey Results

Overall, the results are very encouraging and suggest there is an opportunity to be exploited:

27% of respondents said “Yes”
44% said “Maybe”
Total “Would Consider” is 71% (27% “Yes” + 44% “Maybe”)

Receptiveness to flying from TIA to MA is highest among:

Toronto residents
Cottage owners
Frequent visitors (5 times or more per year)
High household income ($200K+)
25 to 49 year olds

Inbound – Survey Amalgamation
(Please contact [email protected] to request complete research deck)

Results Summary, all surveys willingness to visit the region:

18% of USA survey respondents, and 17% of UK respondents, are willing to consider Canada as a travel destination:
Of those, willingness to visit Algonquin Park-Muskoka is high, with 96% of USA respondents and 97% of UK respondents expressing a willingness to consider it as a vacation destination
85% of USA respondents and 81% of UK respondents said they would consider it as a primary destination
17% of Ontario respondents have already visited the region, or would be willing to visit the region

Receptiveness to flying from Toronto to Muskoka Airport is higher amongst international travelers than amongst ones from Ontario. Familiarity with the region likely plays a role here – the more familiar one is with the region, the less likely they would be interested in flying:

85% of USA respondents interested in visiting Algonquin-Muskoka would choose, or might choose to fly, to the region from Toronto. For UK respondents, the proportion is higher at 91%.
For Southern Ontario respondents, 66% or respondents expressed a willingness to fly. Receptiveness to flying is highest among Toronto residents, cottage owners and frequent visitors to the region
Convenience is cited as the most likely reason to choose flying over driving for USA and UK respondents. For Ontario respondents, avoidance of traffic is the most oft cited reason