PowdAir commercial realities
Some commentary on the PowdAir commercial scenario.
It is challenging because of:
- the directional nature of demand (assuming little outbound demand from SION)
- the single market sector
- the flight dates not matching HOTAC availability in peak periods
- the potential for aggressive DOW pricing competition from OCs.
As a skier, I’m impressed by their marketing communications & see PowdAir as doing all they can to raise 'Destination Sion' awareness & create early demand & market buzz. I suspect most customers won’t be thinking about the operational / commercial elements raised in this thread. The airline hasn’t helped itself by publicly flip-flopping on their Ops plans nor by having their initial selling dates slip but once again most customers won’t be aware or care.... & it is normal in a pre-launch period that these issues crop up. Sion airport or the local authority may have put up a launch fund and I suspect they will be happy with the marketing comms to-date.
Re: Weather concerns - most skiers understand it goes with the territory (sorry) & higher-end i.e. less price-sensitive skiers will like the PowdAir / Sion proposition in the way its being presented with fixed fares, quick transfers, skis included, season-pass FF discount & overall niche, simple style. However, are there enough of this sub-set of customers across the listed catchment areas to achieve the (assumed) high SF needed to break-even on an ACMI deal? Difficult.
Another issue is lack of distribution. Are WT supporting GDS connectivity or any ticketing outside of the direct website booking engine? Is the strategy 100% B2C? There is no travel agent’s portal currently. The airline offers transfers * which is a pragmatic customer service & allows for extra revenue generation but overall I foresee PowdAir having to be much more sophisticated with both their Pricing & distribution. There are many good reasons why airlines have layered fare levels, multiple booking classes & significant resources focused on revenue, yield & channel management. One size does not fit all.
Lastly, I do not understand the ‘own-AOC’ announcement. Their entire proposition only works when focused on the ski season so apart from a whole raft of financial and operational requirements & responsibilities - what benefits does an AOC bring?
* Not sure as I write of the ATOL requirements when selling 2 components (albeit separately)?