International flight fight escalates over non-stop air service to Hawaii

YVR rolls out retail promotions and reduced parking rates in campaign aimed at luring back passengers opting for Bellingham airport
Flights to the Aloha State from Vancouver and Bellingham international airports have combined to rise 81% in the past four years

A substantial jump in the number of non-stop flights to Hawaii from Vancouver and Bellingham is driving an intense competition for passengers between those cities' airports.

Allegiant Air's November 14 launch of four new flights per week from Bellingham pushes the combined weekly non-stop flights to Hawaii from both Vancouver and Bellingham to 67, up from 37 in the 2008-09 winter season.

Vancouver International Airport (YVR) has 49 of those flights, up from 37 four years ago. Bellingham International Airport (BLI) started offering flights to Hawaii last year and has increased its offering to 18 flights per week to the Aloha State.

Because it's an American airport that has lower taxes and fees, BLI has lower prices.

YVR's selling points are:

•easy access to rapid transit;

•a wide variety of retail stores; and

•a shorter drive for B.C. passengers.

A Canadian Airports Council report earlier this year estimated that lower fares at U.S. airports result in YVR losing 950,000 passengers annually.

Tired of losing those passengers and the spinoff revenue they generate, YVR has been bolstering its offerings by slashing weekly parking rates and offering retail promotions.

Weekly parking will drop to $38.95 from $102 for those who download a coupon from the airport's website and park between December 15 and January 6.

Downloadable coupons will be available after January 6, though the discounted rate will be higher.

Another new promotional strategy is to get retailers to team up to offer discounts to travellers who fly to a specific destination.

Until December 12, for example, those who fly to Hawaii from YVR can show their boarding pass to various merchants and get everything from discounts at Starbucks to lower rates on pedicures at Absolute Spa and deals on flip-flops and suntan lotion from YVR retailer Indulgences.

This is the first time YVR has held such a campaign outside of similar promotions to celebrate the arrival of a new carrier.

"We tried a promotion like this when Air New Zealand launched service [in 2007] and then we did it when Virgin Atlantic started its flights in the summer," said Joel Tkach, who is YVR's manager of passenger marketing. "The response has been positive so each time we do it we try to update it, keep it current and add new elements."

YVR produced a short video on Hawaii to play on airport TVs. It also rented palm trees to create oasis displays and hung banners to mark the Get More Hawaii theme.

Simon Fraser University marketing professor Lindsay Meredith told Business in Vancouver that YVR should have initiated concerted efforts long ago to stem the flow of passengers to U.S. airports.

But he added that the real issue is the federal government, which he said should reduce taxes and fees to allow YVR to compete on a level playing field with its U.S. counterpart.

"Why are they driving people to Bellingham?" he asked.

"The government thought YVR had a captive audience and all this traffic and that the government could charge whatever it wanted in fees and taxes because flying passengers would have to pay the higher fares.

"That would mean businesses could pay exorbitant rents and the government could just collect one ton of money and go on their merry way. Finally competition reared its ugly head. It was strong enough competition that a lot of customers said 'You know what, you keep your damn product, we're heading to Bellingham.'" •

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