Friday, December 15, 2017

Lean Mean Luis Muñoz Marín Airport

By on August 13, 2017

Editor’s note: The following article originally appeared in the August 10 print edition of Caribbean Business.

SAN JUAN — Access for travelers is one of the key elements for achieving growth in the tourism sector. Given that Luis Muñoz Marín International Airport (LMMIA) is Puerto Rico’s biggest point of access for travelers from abroad, how the airport is functioning has a major impact on the economy at large.

“The airport today, this being an island, is the principal point of entry and departure. As a consequence, [we are] the first and last image tourists have of their visit,” said Agustín Arellano, CEO of Aerostar Puerto Rico, during a June 29 press conference.

The LLMIA has seen an increase of nearly 700,000 passengers, from 8,353,471 in 2013 to 9,037,322 at the end of 2016. Furthermore, at the same press conference, Arellano indicated the airport, where 10,000 people work, is receiving a daily influx of 30,000 passengers and has 10,000 employees. Those working in the airport include airline employees, services operators and workers from local and federal agencies.

(File Photo)

However, not all changes at the airport are evident through general numbers alone. One example is the airlines at the airport. While their number has remained about the same, there’s been a rotation of about a dozen airlines during that same period. The presence of airlines such as Dynamic Airways, Qatar, Lufthansa and IBC has been substituted by Florida West, Frontier, Allegiant and Air Canada.

The executive director of the Puerto Rico Tourism Co. (PRTC), José Izquierdo, pointed out that some of the new arrivals focus on the economy traveler. “I think it has never been so inexpensive to visit Puerto Rico as it is right now. We are seeing a proliferation of airlines with low-cost [services]. These low-cost carriers, such as Frontier and Southwest, have increased their presence on the island,” Izquierdo said.

Another element the PRTC director emphasized is not just how many new airlines are at the LMMIA, but whether they have expanded their presence on the island.

“There are other airlines that are a bit bigger that have also increased their seasonality, [meaning] the duration of their season. Iberia resumed direct flights between San Juan and Madrid during the summer of 2017. But the company made these adjustments a couple of months prior to the past [year]. This represented an added impact of about $2 million to the economy,” Izquierdo indicated.

Another notable expansion for the LMMIA has been an increase in the net number of routes, which went from 88 in 2016 to 112 in 2017. While 18 routes from 2016 are not operating, more than 40 new destinations were added to the airport in 2017. Most of the eliminated routes were from the continental United States and were substituted by routes to other airports in the area. In general, most new routes are for different destinations within the United States, including Los Angeles (LAX). Some of the new routes include Canadian destinations such as Ontario and Montreal, as well as Jamaica.

“This [the opening of new routes] is extremely positive because when an airline decides to open a route, it usually implies that they are moving planes from another [route]. So, there is an interest in looking at Puerto Rico. It’s a very elastic market. If a carrier leaves and there is a demand, another one will occupy it.”

The Aerostar administration at the LMMIA has also sought measures to reduce spending. Among those measures has been the reduction of water consumption by 43% since the company took over airport administration in 2009. Likewise, the airport has reduced its energy consumption by 15% during the same period. However, as for the LMMIA’s electricity bill, the reduction was larger. During the press conference, Arellano also explained that the airport did not have appropriate electricity meters. After a three-year process, to install the correct number of meters, the LMMIA was able to reduce its electricity bill by 50%, from $1.2 million to $600,000 monthly.

Between the modifications at the airport and programs Aerostar has established to engage with the surrounding communities, Arellano believes there is a “visible change” in people’s perception of the island since the company first took charge of operations at Luis Muñoz Marín International Airport.

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