Monday, November 20, 2017

Tourism: Goal is Growth Long-Term & To Be Considered a Large Airport

By on September 11, 2017

Editor’s note: The following article originally appeared in the September 7 print edition of Caribbean Business.

SAN JUAN — Luis Muñoz Marín (LMM) International Airport has seen years of remodeling of its terminals and infrastructure, with projects expected to last until 2020. The work is much welcome and much needed, as indicators show an increase in passengers going through the airport in recent years, with the trend expected to continue.

Agustín Arrellano, CEO of Aerostar Puerto Rico, which manages the airport, said the long-term goal is for the facility to be considered a large airport by federal standards. Last year ended with an influx of 9 million airline passengers to Puerto Rico and 2017 is expected to close at 10 million passengers. To achieve the “large airport” classification, the LMM facility would need to reach the figure of 15 million passengers annually.

An aerial view of Luis Muñoz Marín International Airport is seen in this screenshot of http://aeropuertosju.com.

To achieve the growth envisioned for the island’s largest airport, Arellano pointed to reaching new markets in the air travel sector, which will require more diversification of the airport’s current market.

“About 83% of the traffic is still between Puerto Rico and the mainland United States, 13% of the traffic is between Puerto Rico and the Caribbean, which are all the islands, the Lesser Antilles and the Greater Antilles, and barely 2% are from Central and South America, 2% from Europe and 2% from Canada. With those numbers, you can see the potential to attract tourists from other markets. The potential to go and look for more trips in other areas is here,” he said to Caribbean Business.

The Aerostar CEO explained that part of the effort being made with the P.R. Ports Authority and the Tourism Co. is to show certain “markets that demand for Puerto Rico exists.” While increasing visitors to the island is one of the ways to increase the influx of passengers to LMM Airport, it is not the only strategy Arellano suggested.

San Juan was once a major hub in the Caribbean for carriers such as American Airlines, which used to have almost 100 daily flights to and from Puerto Rico, including those from American Eagle, its regional carrier. After almost 30 years, American Eagle flew its last Caribbean flight in April 2013. Since then, other airlines, such as JetBlue, Spirit, Seaborne Airlines and Cape Air, have tried to fill the gap by increasing flights to and from San Juan.

Bearing this in mind, Arellano said Puerto Rico certainly has space for growth as a hub for other areas of the Caribbean. For this particular strategy, the focus would be on bringing in larger commercial airplanes that would transfer cargo or passengers to smaller airplanes that would spread throughout the Antilles.

“The connectivity with all the Caribbean is very strong. There is no other airport in the Caribbean that has a larger number of connections to the Caribbean islands than San Juan. Everyone is linked to San Juan for a very simple reason; the infrastructure on the other islands does not allow for the operation of large commercial jets,” Arellano stated.

However, another element for the airport’s growth, according to Arellano, is for Puerto Rico to achieve economic growth.

“What we need at the same time is economic development on the island for passengers to go in both directions,” he said, arguing that new opportunities have been created during the fiscal crisis, whether by people advising or litigating matters related to the financial situation or from people who now see investment opportunities in Puerto Rico.

Arellano explained that the airport’s current facilities can sustain the projected growth because it is still not being used to its fullest capacity, even with the ongoing renovation projects.

A brief profile

While Arellano is now more focused on the administrative and economic aspects of LMM Airport, by profession he is an engineer in electronic communications and radar systems, and a pilot. He has dealt with airport administration from both the public and private sector.

“I think it has been an interesting career because I am a person who has dedicated my whole life to aviation. I’m a person of aviation,” he stated.

Arellano worked for the Mexican government for 26 years, and for 12 of those years, he oversaw 85 airports around that country. After leaving that public sector, he went on to Asur, which managed nine Mexican airports, and was part of Aerostar’s international expansion.

“My priority was in the responsibility of infrastructure development for the airports we had in Mexico as well as the international proposals,” he explained.

After failing to win the public-private partnership (P3) project for Guarulhos Airport in Sao Paolo, Brazil, Aerostar set its eyes on winning the P3 contract at LMM Airport, which it did in 2012.

—Caribbean Business Editor Rosario Fajardo contributed to this story.

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