Article by Greg Lindsay
Advertising Age  |  September 2005

A Marketing Reporter’s Journey Into Airworld II

A three-week daily series.

Page 1  |  PAGE 2  |  Page 3

Airworld 2

PART 5: ROCKY MOUNTAIN HIGH

The Eerie Isolation of Denver International Airport
September 16, 2005

DENVER—“The tendency in airport gestalt is toward ever-greater autonomy,” architect Rem Koolhaas once wrote. “Sometimes, they’re even practically unrelated to a specific, generic city. Becoming bigger and bigger, equipped with more and more facilities unconnected to travel, they are on the way to replacing the city. The in-transit condition is becoming more universal. Together, airports contain populations of millions—plus the largest daily workforce.”

The words seemed to take on new meaning for me as my ATA flight lowered for its approach toward the incredible 53-square-mile expanse of the Colorado Piedmont, across which sprawls the Denver International Airport. Making the scene below all the more otherworldly were was the central cluster of enormous tent-like buildings that could well pass for the exotic encampment of some alien race in a George Lucas science fiction epic.

It’s easy to sound glib when describing airports as “invisible cities” on the edges of the ones we call home. But the vast, isolated facilities of DIA deserve the title—a decade after opening, it still sits well beyond city limits, protected by four miles of farmland in every direction to prevent Denver’s suburbs from creeping too close. DIA was the last American airport built from scratch (and had been the first since Dallas-Ft. Worth opened 22 years earlier) and may well be the last for another two decades. Just as the mega-airports of Asia—Hong Kong, Seoul and Osaka—were built on islands reclaimed from the ocean, DIA itself is an island reclaimed from the plains.

Although it serves Denver—and is in fact a city agency—the airport’s directors have realized that DIA’s future depends on self-sufficiency and less reliance on the entities it serves—those mercurial, endangered species known as airlines. During a tour of DIA’s concourses, Airport Property Officer Pete Gingras explained its economics to me. DIA breaks even on its revenue from the airlines -– landing fees, rent, etc.—while posting a substantial profit (technically “revenues in excess of expenses,” as DIA is a nonprofit) of $70 million on revenues of $166 million last year, including $31 million from concessions and advertising alone.

Revenues are expected to rise 10% this year, as the low-fare slugging match between Ted and Frontier boosts traffic and drives concessions. Thanks to that cash-flow, Gingras said, DIA is debt-free and able to finance future expansion without taxpayer dollars. (The airport cost $4 billion to build in the first place.) It’s also theoretically able to lower the airlines’ fees as an encouragement for them to stick around.

The facility has just issued new design guidelines for the retail marketers and restaurants in terminals (“We think good design can boost sales 15% to 30%, so it’s really about ROI [return on investment], not just a whim,” Gingras said) and the airport staff is constantly searching for ways to bring in new businesses and tap new revenue streams. DIA even farms the surrounding 16,000 acres with wheat, millet and a sunflower seed field that brought in $300,000 worth last year and drills for oil and natural gas on the property ($1.8 million in 2004, and the airport is planning to drill more wells).

The airport has its own full-sized post office and recruiting center. The concessionaires must constantly replace employees who burn out on the 30-minute commute from Denver, the shuttle buses from employee parking lots, the background checks (the FBI combs back through the last 10 years of each applicant’s past), and the daily crawl through the thick membrane of security. The joke here is that when an employee misses four days but shows up on the fifth, the managers high-five them and thank them for coming back.

But those who stick around—employees and concessionaires alike—are encouraged to experiment. When the franchiser Quizno’s Sandwiches took over its first and only (and now it’s highest-grossing) outlet here, the airport encouraged the chain to open a slightly higher-end bistro offering sit-down meals. “You can’t be everything to everyone in the restaurant business, but in airports, you have to,” said Pete Pflum, vice president of airport operations for Quizno’s.

When the snow begins falling in the winter, each week brings the possibility of being snowed in, forcing the airport to take the final step, if only for a few days, toward total self-reliance. In March 2003, when a blizzard dumped seven feet of snow on each square inch of the mylar-coated roof, the tent began to sag dangerously, forcing its evacuation. There was nowhere to go for 8,000 stranded passengers but deeper into the terminals (the highways leading to the airport were snowed shut). “It’s never 8-to-5 here, ever,” Pflum said.

The decision by DIA’s master planners to keep the airport separate from the city for at least another decade means there is nothing but Airworld for literally miles around. I chose to stay at the hotel closest to the airport, a Ramada tucked inside a pocket of urban sprawl that would not exist without the nearby airport.

This is Airworld’s suburb, which we commute to via shuttle buses that scoop up guests for a half dozen different hotels at a time—the Courtyard by Marriott, the La Quinta, the Days Inn—underscoring their essential interchangeability (or at the very least their common ownership by a local franchisee.) “Holiday Inn Express or Holiday Inn Airport?” my driver asked one passenger. “Which number did you call?” “I don’t remember,” the rider replied wearily. “That was so long ago.”

Out here, we’re reduced for the night to the sum of our brand preferences and loyalty programs. Hertz, Avis or Budget? The Embassy Suites or the Radisson? Dinner at Bennigan’s or the Village Inn? Which one are you? Does it matter? One night, lying in bed, I flipped through a booklet listing every Ramada in the world, and landed on the one at Narita, the international airport outside Tokyo. Narita was once farmland, too, before the Japanese government declared eminent domain and began building. That Ramada and mine must be sisters, I thought. (My stay at my Ramada was comped by the general manager after a few unsuccessful attempts to arrange an interview about his usual customers.)

I walked across the highway the first night for a drink at Bennigan’s. Sitting next to me at the bar was Pete Kourkoubes, a silver-haired salesman for Toromont, a manufacturer of gas compression equipment, who was on the road and eating dinner with a younger colleague. They were in town for a 12-hour meeting that had let out only a half hour before, “and this was the first thing we found,” he said. “This might be the only thing around, we thought.”

He lives in Houston (“I moved there so I wouldn’t fly as much—only 50 times a year now instead of 100.”), flies Continental, likes renting from Hertz (“There’s no paperwork, and I’m gone.”) and was staying at the La Quinta with a corporate rate.

“I have around 300,000 miles,” he said, “and I can’t use them fast enough. I probably have a few free hotel stays somewhere, but I’ll never get around to using those, either. When you’re home, you never really want to travel.”

PART 6: DIET OF A TERMINAL MAN

Navigating the Gastronomic Wasteland of Airport Food
September 19, 2005

DETROIT—I woke up Sunday with a sore throat. It was inevitable. After all, what are airliners if not giant flying thermos bottles that enable every passenger to efficiently share his microbial spew with every other passenger? Before I left,

Sophie had fretted endlessly about the super-germs I was sure to inhale or absorb over the course of my travels. Multiply Los Angeles International Airport’s 60 million passengers per year by the billions of microscopic life forms each one was carrying, and surely something was eventually going to slip by my immune system. To avoid contamination, I shouldn’t just wash my hands, she advised me, but instead wash all the way up to the elbows, the way a surgeon scrubs before entering the O.R. I, in turn, joked that I had a 50-50 chance of coming home early with a severe upper respiratory ailment.

But my weakened condition, I suspected, had less to do with what I was inhaling (although spending another night on the floor at O’Hare probably didn’t help) and more to do with what I’d been eating.

During my first week in Airworld, I’ve eaten a half dozen Clif Bars (for breakfast), in-flight almonds, peanuts, pretzels and trail mix, grazed my way through Presidents Clubs, Crown Room Clubs, Red Carpet Clubs, Admirals’ Clubs and Worldclubs, and eaten more turkey sandwiches that I could bear to count. I’d eaten “Wild Turkeys” in Orlando (because the pepperjack cheese apparently drives them wild), turkey paninis from Starbucks and a turkey on ciabatta from a Chili’s Too at O’Hare that was so stale the bread had the consistency of a Nerf football. I can’t complain about the airline food because in this day and age in coach class, there isn’t any (with the exception of the $8 jerk chicken sandwich I bought on my Song flight, which trumped the turkeys across the board). The best meals so far have been flank steak at Encounter, the ambitious, vaguely Trekkie-themed restaurant in the iconic Theme Building at LAX, and tuna steak Saturday night at DEMA, the restaurant in the Westin Hotel attached to the airport. (Westin PR was paying.)

While still at LAX, I smirked when I spotted Malibu Al’s Beach Bar in Terminal 5, which provided Alan Richman a jumping off point for a sweeping takedown of Airport cuisine (can that word even be used without sarcasm?) in the August issue of Condé Nast Traveler.

“At a time when air travel is expanding,” he wrote, “in-flight meals are disappearing, and time spent in airports is lengthening—a formula one might expect would herald a golden age of in-terminal dining—the food is certainly no better and probably worse than it has ever been: bland, formulaic, and in the case of establishments like Malibu Al’s, dispiriting.”

Richman wonders whether the majority of travelers are so desperate for distraction before boarding that they’re willing to eat just about anything—setting the bar pretty low for airport concessionaires. He’s right, but passengers have only themselves to blame. According to my new friends at the trade publication Airport Revenue News, the “primary dining style” of most airport visitors in 2004 was “indifference.”

When Denver International was still only on the drawing board back in 1991, the master plan called for no sit-down restaurants of any kind because prospective passengers indicated they didn’t want any. Instead, they got the food courts they deserved. When the Quiznos brain trust opened Chef Jimmy’s bistro as an experiment on one of the concourses a year ago, passengers practically fell to their knees to give thanks for the medley of cooked, rather than merely reheated, dishes on the menu. DIA executives told me this shift away from fast food and more toward fast-casual has been 10 years in the making, and that a new round of passenger surveys (the first since 1991) are in the works.

Not that Richman should hold his breath for a “renaissance” anytime soon. After indifference, most passengers care about “healthful” and “low-carb” food, which has translated to the packaged sandwiches I’ve been subsisting on for the past week. The supremacy of fast food has given way to “fast casual,” which would explain why Chili’s Too is seemingly everywhere –- from Orlando to O’Hare to Detroit –- and why Orlando’s latest showpiece restaurant is Romano’s Macaroni Grill.

Airworld is fertile ground for chains, possessing the double advantages of familiarity (with customer) and a reliable track record (appeasing airport operators) that freeze local favorites out. And once a chain has a beachhead in Airworld, it’s only a matter of time before its marketing department is studying timetables and plotting expansion at the most popular destinations. As one restaurant consultant put it in Airport Revenue News, “my recommendation to them if I were doing consulting is if it’s a hit in say, Dulles, then look at the major airports Dulles flies to and then open it up in those airports as well so you can get that brand recognition.”

But sometimes brand recognition blurs into brand mutation. What am I supposed to make of the Fox Sports Skybox bars and grills I’ve spotted in Orlando and O’Hare? What does a burger prepared by an also-ran cable channel taste like? What about the tacos at the Jose Cuervo Tequileria here in Detroit, or the “Caribbean specialties” at the Casa Bacardi in Tampa? (Richman confirmed that the former, at least, had drifted away from its core competency: “The tortillas appeared to have been made out of white flour and chewing gum,” he wrote.) And then there is the Expedia.com Cafe, which I haven’t seen, and which must possess brand synergies I can’t quite imagine (“low fare” has a different connotation in the restaurant business) but which apparently boasts an average customer check 54% higher “than a generic airport bar,” according to its creator, HMShost.

HMSHost (formerly Host Marriott Services) is to airport concessions what Clear Channel and JCDecaux are to their advertising. According to its Web site, HMShost has annual revenues of $1.6 billion and 71 airport locations. It doesn’t just install chains, but invents or imports those seemingly unviable local brands when the opportunity presents itself. When it won the $28 million contract for San Antonio’s airport in 2001, it promised to install a pair of Starbucks, a brew pub, a new sports bar brand created in partnership with former NBA star George “Iceman” Gervin and a Chelsea Sandwiches of Texas.

While passing through O’Hare last week, I decided to taste test the airport’s offered delicacies. I grew up south of Chicago, and so had a mental benchmark against which I could judge the local brands present in United’s wing –- especially the divey Billy Goat Tavern and The Berghoff, a German institution in the Loop. I couldn’t bear to actually eat the O’Hare Billy Goat’s greasy burgers (the same goes for the heat-lamped deep dish pizzas I spotted), but I did make it out to the Berghoff Cafe on United’s outer concourse in order to sample a corned beef sandwich and the Berghoff’s own beer. It only took about a minute for the cafe to deliver a body blow to my expectations when the carver announced my corned beef-on-rye would go without the rye. “We’re out. Whole wheat or a Kaiser.” I chose the Kaiser. He repeated this exchange with nearly every customer. “What do you mean, no rye?” one demanded. “I want to see the manager. I’m serious!”

The meat was cold, the cafe was packed, and despite the wood paneling and stained-glass chandelier, I remained unconvinced that I was anywhere but another outpost of Airworld. I’ll stick to the turkey sandwiches and start taking my vitamins.

PART 7: THE ‘DEMON CUSTOMERS’

Inside the ‘FlyerTalk’ Community
September 20, 2005

ATLANTA—When he coined the term in his 2001 novel Up In the Air, Walter Kirn wrote that Airworld “is a nation within a nation, with its own language, architecture, mood and even its own currency—the token economy of airline bonus miles that I’ve come to value more than dollars. Inflation doesn’t degrade them. They’re not taxed. They’re private property in its purest form.”

The details of this “private property” have changed somewhat since then; frequent-flier miles have been devalued by restrictions and the always-falling price of an economy-class ticket, but they continue to underpin a huge sub-economy and, indeed, a curiously elitest society within the framework of Airworld.

Let’s look at the demographics. Last summer, the media research firm Arbitron released its Airport Advertising Study, a thorough survey of the income and spending habits of American air travelers. Keep in mind that this study was conducted during 2002-03, and that air traffic has only risen, to pre-9/11 levels, since then.

Arbitron found that 92 million Americans had flown at least once in the past 12 months, and that there was a clear demarcation in income between those who fly and those who don’t. Eighteen percent of all passengers have a household income of $100,000 or more, compared to only 10% of the non-flying public. More than half of all passengers had incomes of $50,000 or more, compared to 37% of those who weren’t.

The difference between the “frequent flyers” in Arbitron’s study—someone who taken four or more round trips over the past year—and non-flyers was even more drastic. A third of all frequent flyers make $100,000 or more. They’re luxury consumers, more male (58%) than female, and although they comprised just 18% of all passengers, they absorb 60% of all airport advertising impressions thanks to frequency. There’s a reason Arbitron subtitled the report “Exploring an Undiscovered Upscale Medium.”

But Arbitron’s definition of the frequent flyer doesn’t shed much light on the “road warrior” we know to be at the apex of this demographic pyramid. Who are they? How many of them are there? What do they want? And, of course, what can we sell them?

The best place to start such an investigation is to mouse on over to that point in cyberspace where large numbers of frequent fliers regularly gather: FlyerTalk.com.

FlyerTalk is the community adjunct of the WebFlyer network of Web sites edited and published by Randy Petersen, the media’s go-to-guy on the subject of frequent-flyer miles. But that dry description doesn’t do justice to the impassioned FlyerTalkers who spend a healthy percentage of their non-billable waking life there.

These are, in effect, the airlines’ best customers, and I would argue that in five years or less, they won’t look much different from your best customers –- knowledgeable, permanently plugged-in, eager to be engaged directly by the brands they love (or at least are forced to put up with) and willing to do whatever it takes to arbitrage the opportunities offered to them as consumers into something much grander. FlyerTalkers burn up the message boards with grumpy dissections of bad service, the minutiae of their last trip in first class to Hong Kong and back (there’s at least one thread on FlyerTalk right now criticizing these Airworld dispatches as too bland) and fielding any travel-related question that might appear. “They’re my human-powered, travel-related Google,” one regular told me.

I don’t have FlyerTalk’s membership stats at my fingertips, but the site commands enough power and attention that Continental Airlines CEO Lawrence Kellner invited 274 FlyerTalkers to Houston in April to give their complaints and suggestions a hearing over dinner and drinks. The New York Times caught wind of this meeting a few months later and soberly concluded that “blogs may be grabbing all the media headlines, but online communities like FlyerTalk are wielding a different kind of influence in the corporate world, providing instant feedback from those critics who marketers have called influencers. Just by logging on, companies can study, learn from and even respond to the cacophony of opinions about what they are doing wrong and what they are doing right without spending a dime on focus groups or market research.”

A pack of Scandanavian FlyerTalkers repeated this experiment last month in Stockholm with executives from SAS, and considering the ongoing shift by the major domestic carriers away from highly competitive short-haul U.S. routes and more toward long-haul, international ones (American has shifted 10% to 15% of its capacity in this direction, and United 14%), these kinds of confabs and direct communication with customers will only become more commonplace. FlyerTalk and similarly-minded sites like FrequentFlier.com, MoreMiles.org, TripAdvisor.com and HotelChatter.com are testbeds for the idea proposed by blogging’s standard-bearers that markets and media are conversations, not dumb, one-way messages.

So who are these people who are so carefully watched by aviation CEOs? I met up with a trio of FlyerTalkers at Chicago O’Hare in American Airlines’ Admirals Club to drink on FlyerTalk’s dime and talk about marketers’ pursuit of them. Over the course of two hours, we whipped out our laptops to scour the Web for upcoming deals and surf FlyerTalk (of course!); determined how easy it is to print fake boarding passes at home good enough to bear the initial scrutiny of security screeners (they’re ideal for sneaking into Red Carpet Clubs, for example) and rolled our eyes at the exploits of the mileage runners –- those inveterate flyers who frequently take 24- or 48-hour trips to nowhere in order to pass their accounts or requalify for some lofty status again next year. “It’s like a drug addiction,” said Jennifer Moody, co-founder of the two-person health-care strategy firm AmeriMed Consulting (and FlyerTalk moderator). “Only you’re addicted to the perks and the status.”

“I’ve read that in recent years, Best Buy has tried to weed out what it calls its ‘demon customers.’” said Sameeer Bakhda, a doctor who lives in Chicago. “They’re the ones who clip every coupon, fight over every deal, and basically make themselves a nuisance. Well, we are the airlines demon customers.”

FlyerTalkers have successfully used their communal intelligence and ever-increasing access to formerly privileged information (such as the the airlines’ “fare buckets,” i.e. the pricing data, on each flight) to substitute better information for cash. Thanks to endless cycles of dirt-cheap mileage runs and employer-underwritten travel, they’re able to qualify for elite customer status at a half-dozen different institutions, which in turn pass around free upgrades, tickets, hotel stays, etc. that create the illusion of wealth and a willingness to flaunt it when the reality is often much difference.

While Arbitron’s airport survey might give the impression that the more you fly, the more you make (witness private jet owners), FlyerTalkers’ savviness has essentially decoupled frequent flying from its traditional demographics. They’re younger and more female than the stereotype of the middle-aged, upper-middle-class aerial commuter you’d expect to find in business class. Not that anyone in Airworld wants to hear it.

“A lot of the advertisers still see that same perception,” Moody said. “We had a long thread on FlyerTalk—actually I posted it in both the women traveler’s and American forum—and the reaction in each was 180 degrees different.” She had discovered a job posting on American’s site at American Way, the airline’s in-flight magazine. The posting described the magazine’s readers as “upper-middle class affluent MALES in their forties travelers.”

“Apparently they’ve made some determination that these are their readers. Not that I even flip through it. It gets boring looking at ads for matchmaking services, cigars and condos in Miami.” In any case, the reaction to her post on the women travelers forum was a lot of knowing virtual nodding. The reaction on the American thread by the men present was indignation. “I wouldn’t mind if marketers were targeting me,” she said, “but they’re not.”

PART 8: LOW FARE WARS

The Commodity Airlines That Wish They Weren’t
September 21, 2005

ATLANTA—Today was just another day in Airworld. As they say, if it’s Tuesday, is must be ... Atlanta, in my case. I rolled out of bed (next to gate E18), jumped in the shower (at the Delta Crown Room Club), checked e-mail and somehow still managed to set off late for the office (at gate C20), where I was due to meet AirTran’s director of marketing.

Actually, it was one of the busiest days I’ve spent in transit so far. I was lucky enough to be invited to a party—Song’s unveiling of a pink plane in honor of October’s Breast Cancer Awareness Month—held in one of Delta’s hangars. Several hundred Song employees grabbed sack lunches and milled about as the airline-within-an-airline’s president, Joanne Smith, introduced a video of cancer survivor testimonials. The tie-in makes perfect sense considering the airline’s target demographic, women.

Song was launched after Delta’s internal research demonstrated that 62% of leisure travelers were women, 75% booked their families’ travel plans, and 90% were making the decisions on when and where to travel. Ergo, Song would speak first and foremost as a brand to women.

But that’s a relatively narrow reading of the data, which revealed a broader sentiment among travelers that “uniformity was the enemy, and that travel was tiresome,” said Smith. “What if you could bring the glamour back to air travel? What the industry needs to deliver is a low fare and a better experience.”

The small galaxy of brands that surrounded Song at its birth and continue to do so today—the Dave Lieberman sandwiches, the Rande Gerber cocktails, the Spades’ uniforms, etc.—were designed to link Song with the brands its desired customers have already aligned themselves with, e.g. Whole Foods, the W Hotels, Kate Spade and Jack Spade. (Last month, when I breathlessly explained my premise to the architect David Rockwell, who is designing the interiors of rival JetBlue’s new terminal, he just shrugged. “Of course. People are interested in synergistic lifestyle experiences.” Duh.)

That was the theory. What I wanted to know form Smith and her chief of marketing, Tim Mapes, was whether it was working. The short answer is, Who knows? Its financial performance is buried deep inside Delta’s hemorrhaging balance sheet, and neither Smith nor Mapes is willing to reveal any useful numbers—load factors, costs or revenues per passenger seat mile, passenger yields, anything—“that will almost certainly be read by our competitors,” according to Mapes.

But they did offer a few vague pieces of evidence. Load factors hover around a respectable 80%, Smith said. (Southwest’s and JetBlue’s are stilll higher.) Yields and fares are both rising, and Song is hitting its internal benchmarks, said Smith, whatever they might be. Mapes said some fares have risen about $35 since Song’s inception two years ago, which just about covers the corresponding increase in oil prices during that span. They both vow that the airline’s blizzard of branded amenities—which its competitors view as needless, expensive frills—are profit centers.

“It’s an extremely attractive proposition, that’s all I’ll say,” Mapes said. “It’s more attractive than flying people ... which isn’t that much these days.” Smith was more measured in her answer: “It’s a small profit, and we ultimately have to fill the plane. ... The reality is that there is only a very thin margin from those customers willing to pay. But if [the flight] is priced the same as our competitors and we get the sale, then we’re happy with that. In this market, a thin margin ...” she trails off.

She believes the airline industry isn’t doomed to become a pure commodity business (“Brands will become more important”). And now that Delta is in chapter 11, looking to potentially shed its pension obligations and whatever other costs it can find, Delta is learning a lot from Song—faster turnaround times, greater productivity. It’s not much of a stretch to argue that at this point, if Song were a stand-alone entity, it’d be more valuable than Delta itself.

One of the reasons Delta landed in chapter 11 was because an old-school, low-cost carrier set up shop on its home turf, driving down fares. That was AirTran, the airline formerly known as ValueJet until the infamous 1996 Everglades crash and ValueJet’s subsequent purchase of the smaller (and untainted) AirTran. AirTran has low fares, a business class cabin (upgrades are just $35) and a fleet full of young “baby Boeing” 717s and workhorse 737s. The net result, according to Director of Marketing Tad Hutcheson, “looks like a legacy airline,” with lower fares (and a smaller route system, of course). It looks close enough to have increased its market share at Atlanta Hartsfield—Delta’s home and the busiest hub in the world—from 5% to around 14% during Hutcheson’s time there.

Out west in Denver, Frontier Airlines has pulled a similar trick on United. In July, the airport’s busiest month ever, Frontier increased its market share to a record high 18.5%, mostly at United’s expense. “They started Ted because of us,” said Diane Willmann, the Frontier’s director of advertising. United executives didn’t respond when I brought this assertion up in conversation last week in Chicago, but it is clear that United has spent the last two years trying to swat low-cost carriers popping up in its hubs at Denver (where Ted launched with a legendarily weird guerilla marketing campaign) and Washington Dulles, where Independence Air emerged last year to cannibalize the fares of its former partner. (In a previous life, it was one of United’s regional partners.)

My Independence flight Tuesday night would be the last U.S. leg of my journey before heading abroad Thursday, leaving the low-fare carriers—and the American pod of Airworld—behind.

PART 9: REMAKING NYC’S JFK AIRPORT

Ruminations on the Zen of Terminal Structures
September 22, 2005

NEW YORK—I’m home, sort of. By “home” I mean the terminals of John F. Kennedy International, New Yorkers’ airport of last resort; a place with a history of crime, grime and unmet expectations.

But even as it trails behind other New York metro airports JFK is finally experiencing some much needed gentrification.

When the original terminals were completed in the mid-1960s, they were unsarcastically referred to as the “Seven Wonders.” Between the soaring arch of the International Arrivals Building (IAB), the instantly iconic Eero Saarinen TWA terminal, the flying saucer of the Pan Am Worldport or the largest stained-glass window in the world on the front of American’s terminal, JFK was the last word in flashy, chic airport design. And then it gradually all fell apart, as passenger levels reached capacity and continued to climb, ultimately outstripping the infrastructure. The 220-acre Liberty Plaza in the middle of the infield was torn up for more parking. So were the chapels that overlooked their own grotto. Eastern and Pan Am went out of business. American finally abandoned Saarinen’s woefully underequipped terminal after completing the absorption of TWA in 2001.

But the airlines began to reverse JFK’s entropy in the late 1990s, tearing down Eastern’s deserted building with a new terminal for a consortium of foreign carriers, followed by the death and rebirth of the IAB as Terminal 4, a miniature version of Amsterdam’s much-admired Schipol airport.

And this summer, American finally opened its new $1.1 billion terminal to replace the crumbling Terminals 8 and 9. Nearly put into cryogenic suspension during American’s brush with chapter 11 a few years ago, the new terminal is the first one built for a single airline at JFK since the ‘60s.

Next up is JetBlue’s $875 million new home slated to be built behind Saarinen’s terminal, which will be preserved as a restaurant or a museum, or something along those lines. (An RFP is being prepared by JetBlue.) The groundbreaking is set for next month, and is due for completion in 2008. (Don’t expect any delays –- JetBlue has been forced to spend another $25 million on temporary gates at its current terminal just to tide over its swelling number of flights.)

Which is to say that JFK is once again the best-tested in the country for answering this question: What do we want from our airport? What we don’t want is a decrepit, overcrowded mall (Atlanta) or a sprawling amoeba with seemingly a dozen different limbs. But do we want a bigger, brighter mall with lots of breathing room (like the new international Terminal D at Dallas-Ft. Worth) or something else completely?

American’s new terminal might best be described as “reliably handsome.” It has the requisite soaring ceilings in the ticketing hall (rising to 65 feet high), an exposed steel skeleton and acres of terrazzo flooring. It isn’t claustrophobic, it certainly doesn’t look cheap, and if it isn’t as inspirational as Saarinen’s terminal across the infield, then so be it.

“Like in everything else, form follows function,” the terminal’s onetime project manager, architect David Brown, told me. “Because you have these flows of people, you need large spaces, and you have to put the ceilings high. It’s obvious in hindsight.” He added, “Airports and the design of terminals are sort of mini-urban design programs, like building a road or a high-rise. There are all these concepts at play, and all the airlines know them.” In other words, it may not be a classic, but it wasn’t obsolete by the time it opened, either.

But is there another way? Maybe David Rockwell will find one. “You’re so unaware when you go to an airport that you’re getting on these many-tonned metal machines when you take off,” he explained. “What are the emotional needs of passengers leaving New York, and arriving in New York?”

JetBlue has hired Rockwell to develop the master plan for its proposed terminal’s interiors (the overall design is by the architectural firm Gensler). Rockwelll and his firm are best known for their playful and theatrical designs of restaurants, theaters, baseball parks and even a children’s hospital, but never an airport. (As fate would have it, he is currently working on the theatrical staging of Catch Me If You Can, the Steven Spielberg film partially shot inside Saarinen’s building.)

As it happens, airports have been on Rockwell’s mind for years. He most recently chaired a discussion group at the Technology Entertainment Design conference in Monterey, Calif., in which one of the younger participants argued that the ideal terminal is a non-one: You should just be able to walk up, walk through security and get on the plane.

I met with Rockwell in his office last month to talk about the guiding principles he planned to bring to the terminal. His hiring, I believed, was symbolically significant –- it meant that airports were ready to move beyond being merely gargantuan people-processors efficiently spitting passengers onto planes after they’ve been sedated by greasy food and shopping. Perhaps they could assume a starring role again in the urban framework.

His approach would be guided by three ideas, he said: “New Yorkness,” i.e., creating a sense of place; “JetBlue-ness,” i.e., reflecting the brand; and “usefulness,” i.e., no frills or empty gestures. In practice, that meant no soaring ticket hall –- because passengers have less and less need for ticket counters thanks to kiosks and Internet check-in –- and toward a “great space” on the far side of security.

Within this great space, illumination will be provided by a giant ring of departure and arrival screens (“What if we can de-escalate the tension of not knowing as soon as they arrive?” he asked rhetorically) and viewing platforms placed in the center of the hall will divert departing passengers away from arriving ones even as they provide the sort of voyeuristic function that stoops and the steps at the Metropolitan Museum of Art perform in the city itself. If any of that sounds corny, don’t even ask about the choreographer he brought in to help discern the flow of traffic.

“What was romantic about that 1960 era was that it was sexy, it was glamorous, it was the Jet Set and you could go anywhere,” he said. “None of that matters anymore –- sex is already everywhere. Our sense of style in this terminal will come out of solving problems, and making an airport feel like a sedate mall. I don’t know that getting food quickly leads toward Taco Bell and McDonald’s. You could just as easily have sandwiches provided by Jean-Georges [Vongerichten]. When we did Vong [one of Vongerichten’s restaurants], we put in a cafe there which essentially serves fast-food, pre-packaged sandwiches.” (They will undoubtedly have turkey if this vision comes to pass.)

“And the retail, when it opens, will have roll-up garage doors, so it’s more analogous to a market. I look at Union Square Market from my window every day, and I see how it’s a multipurpose space. A terminal is like that—it’s a microcosm, a miniature version of a thing that exists somewhere else. And making it a mall is not the best solution. I don’t think it’s very vibrant.”

He’ll have his chance soon enough.

PART 10: BIRTH OF THE BOUTIQUE AIRLINE ERA

Three New Carriers Take ‘Lifestyle’ Marketing to the Next Level
September 23, 2005

LONDON—As my Virgin Atlantic flight delivered me into the European pod of Airworld, I couldn’t help but reflect on how the marketing of such international travel is being revolutionized.

In fact, I’ve been flying through some of the changes in real time this last week. Just days ago, I attended a plane’s debut in a Delta hanger in Atlanta with a few hundred Delta/Song employees. But today I wonder how many of those same people will be gone after Delta completes its chapter 11 restructuring. The plan calls for up to 9,000 layoffs as well, reducing domestic capacity by up to 20% in favor of boosting the number of international seats by 25%.

Delta is following American and United, which have already shifted 10% to 15% of their domestic fleets to international services. Why? Because there are fewer low-cost competitors and higher margins along those global routes. The legacy U.S. airline brands are now subsidizing their unprofitable domestic businesses with fat margins from their international operations. But even as Delta catches on to this established trend, the trend itself is about to change.

The “lifestyle” flight services popularized with the American masses by JetBlue and Song have laid the groundwork for a new niche of higher-level lifestyle international flight services. Just days ago a business-class start-up named Eos Airlines began booking fares for its inaugural flight between New York’s JFK International and London. Simultaneously, another business-class-only carrier called MaxJet also began service from JFK to London.

Three months from now, MiMa, a members-only luxury charter airline whose name is a MoMA-esque abbreviation of “Milano-Manhattan” will fly between Milan and New York.

Both Eos and MaxJet aim to undercut the fares offered by the heavyweights on the JFK/London Heathrow route, which is already served by 17 flights each day. Eos is promising the more luxurious service, having outfitted its three Boeing 757s with just 48 seats (a normal configuration has about 180) that offers more leg room than the square footage of most cubicles. And its full-fare price of $6,500 round trip is about 20% lower than comparable fares on British Airways or Virgin Atlantic.

MaxJet is offering a more traditional product on Boeing 767s configured entirely with business-class seats, but at the relatively rock-bottom base fare of $1,600 round trip. “We’re after the business fare traveler looking to book close in [to their departure date],” said MaxJet CEO Gary Rogliano. “We’ve taken the low-fare model and used it in the business cabin.”

MiMa is taking the unique approach of encouraging individuals and corporations to enroll as “members” in its (as yet unpriced) service, which may end up including concierges in both cities it serves, and a top-secret, high-speed transport to and from Milan’s airport. One of its professed goals is to promote “greater cultural understanding” between the financial elites of Wall Street and Italy. Unlike Eos or MaxJet, it won’t sell seats at a discount on its route. “We want to give a private jet experience priced at a little higher than normal business class,” said Armando Brunini, vice president and chief commercial officer of Eurofly, the company that will operate MiMa’s service.

They aren’t the first business class- or first class-only carriers to emerge against the Big Six domestic carriers. Kirk Kerkorian lost a bundle on his MGM Grand airline, and Legend Air once challenged American Airlines on its home turf in Dallas before disappearing into bankruptcy. And even if all three newcomers launch with full flights, their impact on their competitors’ earnings next year will still be negligible. Eos, for example, hopes to have 20 aircraft flying on a handful of routes after five years. (During the same span, JetBlue took possession of more than 80 aircraft and now serves 33 destinations.)

However, the important point is what their sudden collective appearance symbolizes—the beginnings of a wave of boutique brands made possible by the airline industry’s non-existent barriers to entry. Twenty-five years ago, Anouska Hempel and Ian Schrager ushered in the era of the boutique hotel; we now appear to be witnessing the birth of the same movement in the airline industry.

All three are deploying JetBlue’s successful variation on the low-cost-carrier model to business and first-class flights. All three are well-capitalized, all three are flying new planes, and all three plan to undercut the appeal of the establish carriers along their routes using the combination of lower fares and a level of product and service that’s the same or better than the competition.

With passengers gravitating toward flights that are either very inexpensive (the domain of the low cost/low fare carriers) or luxurious (especially on long-haul routes) and doing their best to avoid the middle—the usual hub-and-spoke flights, which Delta also plans to reduce while in bankruptcy—the airline industry may finally be bifurcating.

“Go into the terminals and watch the cross-section of people walking by,” Eos CEO David Spurlock commanded me when we spoke. “The world hasn’t seen that kind of cross-section of customers since Sears & Roebuck lost its relevance decades ago. Retail went through its bifurcation in the ‘70s and ‘80s, the auto manufacturing business went through its bifurcation in the ‘60s, and the PC business went through it in the ‘90s. And the airline industry is leaps and bounds behind them.”

Before launching Eos, Spurlock was the director of strategy at British Airways, in charge of developing the carrier’s route network. “The hub-and-spoke carriers try to be all things to all people. They serve short- and long-haul point-to-point passengers using giant hubs to navigate their journeys—typically in lowest cost fashion available. That structure doesn’t work, and the low-cost carriers have proven they can just sweep the domestic market away. We feel we’re Tiffany about to take on Sears in the jewelry market. They’ve got losses, and they’re hoping that jewelry will foot the bill for their other loss-generating product categories.”

That may be true, and the reason I’ve embarked on the international leg of this trip is to test a few of the luxurious long-haul carriers that Eos, MaxJet and increasingly desperate domestic carriers would rather compete with than Southwest. I’ll have a better idea of what they’re up against a week from now, when I’m stuffed with satay in Sinagpore Airlines’ Raffles (i.e. business) class en route over the North Pole.

PART 11: INSIDE THE AIRPORT ADVERTISING BUSINESS

JCDecaux’s Man in London Provides an Educational Tour of Heathrow
September 26, 2005

LONDON—Here at Heathrow I’ve hooked up with JCDecaux Airport’s managing director in the U.K., Don Sperring, who volunteered to help me better understand how to “read” the advertising landscape of an airport.

Puckish and passionate about airports –- “glass cathedrals,” as he describes them—Sperring’s domains included five in and around London (Heathrow, Gatwick, Stansted, Luton and Southampton) and three in Scotland. He and I were of like minds as far as Airworld was concerned. Before the tour, he loaded up his standard-issue deck of Powerpoint slides for pitches. “Imagine a city with a population over 128 million. ... A city that regenerates itself every day. ... A city with dynamic growth. ... A city with a population unlike anywhere on Earth. ... A city called Airport.”

That “city” is larger than Tokyo, New York, London and Paris combined, if you’re willing to accept the 128 million annual passengers who flow through the five London airports under contract with JCDecaux (a sixth, London City, isn’t) as full-fledged citizens of this city in the sky. Within this aeropolis, Heathrow is analogous to The City (i.e., London’s financial district), with 26 million business travelers per year; Stansted is a suburb of 20-somethings; and Luton (the home of easyJet) is evidently the airport equivalent of New York’s Williamsburg, a hub for cheap-thrills-seeking hipsters.

But, like in any city, there are good blocks and bad ones, hopelessly cluttered public plazas and tony addresses that command premium rates. Near the beginning of our tour, Sperring led me away from the pandemonium of Terminal 1’s general check-in area toward British Airway’s exclusive private reserve for elite passengers. Near the entrance, the floor-to-low-ceiling advertising light boxes were filled with blue-chip financial services, technology and consulting companies. Because of their proximity to British Airway, Sperring explained, these cost “four to five times more” than the lightboxes in the main hall. And inside the check-in lounge itself, Accenture had secured the exclusive presence of its ubiquitous Tiger Woods ads. “What they’re getting out of it is the direct association with this premium audience,” he said.

And how much does premium placement like this cost? Well, Sperring said, he doesn’t have a rate card. “It’s a bit like how you would value real estate,” he said. “You’re always constrained by the question of what is other advertising in that environment worth? You’re always benchmarking to X for that ad, or Y for that one, but how much else have you got for sale? There is an enormous amount of elasticity here in the airport, whether you’re talking about airline tickets or the media for sale. The prices are this wide,” he said, holding his arms apart, “and the market will more often than not decide for you. The equation might be something like, ‘We’re getting X for this ad, and Y for that one, and 67 million passengers come through here each year, and how much wow-factor does the space have, and who else is interested in the space?’ And then you say, ‘Right, that’ll be 160,000 pounds.’ Eighty percent of what we sell here is bespoke for our advertisers. It’s less of a science than an art.”

There aren’t many spaces with a “wow factor” inside Terminal 1, one of the oldest and most extended of Heathrow’s five terminals. (Terminal 5, which is still under construction, is the future home of British Air’s Heathrow operations and will begin life with 30 million passengers a year from the day it opens in 2008.) The low ceilings and narrow corridors make huge banners or vista impossible, and every square inch of the walls seems covered in JCDecaux’s advertising, plugs for the terminal’s duty-free shopping, signage or all of the above. “It’s like they’re afraid of white walls here,” Sperring said at one point.

Still, whether it’s JCDecaux, ClearChannel or one of the handful of smaller players in the market, airport advertisers have a knack for continually squeezing new inventory out of an overlooked wall, or out of the side of a parking garage that could bear to have a banner mounted it, or even from the ventilation ducts. The week before, during my tour of O’Hare with Clear Channel’s operations manager, William Hickok, he pointed out a ubiquitous Toyota campaign that had been themed to a recent convention in town. It had been an excuse to place ads in previously uncharted territory –- banners hanging from formerly blank hallways; wall mounts where there had been none before. Winning approval from the City of Chicago Department of Aviation had been a bear, as usual. “You have to go through 50 phone calls and 10 meetings” before they consider anything, Hickok said, and some advertisers will never be found in departure halls. “I got a call from a guy in Atlanta selling vodka who wanted to advertise,” Hickok told me. “I made a call, and O’Hare said ‘No thanks.’”

But as long as there’s demand, inventory will be found. Sperring also showed me the pitch for the “Lightwave” site, a complex billboard/optical illusion that will fill a traffic island in the center of Heathrow’s terminal complex after the latest fit of construction is finished. The initial asking price for the site is half a million pounds—about $887,000—although I was unclear on the duration of the deal. Even more amazing is the scale model of the Concorde British Airways had paid to place at the traffic entrance to Heathrow, which I heard on deep background cost the airline 850,000 pounds for a long-term deal. (Sperring had no comment on it.)

The workhorses of airport advertising, however, are the light boxes lining the walls (especially prevalent at O’Hare and elsewhere in the U.S.) and the stumpy, rotating kiosks throughout Heathrow. Sperring believes these will eventually give way to new technology: “They were built for older airports, really. And as airports start to change, and become more of a glass cathedral, things like this have fulfilled their usefulness and evolve into screens.” A few screens are already visible at Terminal 1, where ads share space with arrival and departure information, “but in Europe, we haven’t reached that tipping point yet. I don’t think you can say ‘no’ to them, however. I think it will be the future of small-form airport advertising.” Back in America, O’Hare has already received a few digital displays in the food court of American Airlines’ terminal (which had yet to display any ads), but a few are slated to hang in the vaulted ceiling of United’s terminal, and Accenture has been pressuring Clear Channel to install interactive touch screens for its ads in some O’Hare’s most prime real estate.

An ultimately more important trend, in Sperring’s opinion, is the underwriting and branding of airport services. To give you an idea of what that means, consider this: While waiting for my flight from Heathrow to Paris Charles de Gaulle to board, I watched CNN’s coverage of Hurricane Rita on a Samsung flat screen not 20 feet from a T-Mobile stand advertising its pan-airport Wi-fi coverage, while nearby, a row of Internet terminals sponsored by Spectrum.net offered pay-by-the-minute Internet access. And then there is the massive Vodafone display in the heart of Terminal 1 –- a semi-permanent theme park where “you can physically put brands into people’s hands without the fear that they’re going to run off with the stuff,” Sperring said. “They’re having a direct interaction with their clients at a time, perhaps, when their service is most valued. And, of course, those people have a lot of dwell time on their hands, so what else are they going to do?”

Vodafone’s stand also serves Sperring’s goal of moving away from static, pre-sized displays and more toward ads that morph to fit specific contexts. As new “glass cathedrals” have come into being in Europe (at Charles de Gaulle) in America (new terminals at JFK and Dallas-Ft. Worth) and especially Asia, the challenge has been to find a place for advertising within giant glass boxes or halls hundred of feet wide. “We try to borrow from the building’s structure,” he said, and one example with a high wow-factor is the elliptical Emporio Armani ad that covers one entire end of Terminal 2F at Charles de Gaulle.

As both the airports and airlines realize there is more and more essentially free money to be had by covering every available space in ads, the advertisers themselves have responded by marching through the airport, down through the jetways (which United has begun selling at O’Hare, and which Sperring sells to HSBC inside and out at Heathrow) onto the tray tables (a company called Skymedia already has deals with America West and US Airways) and eventually onto the planes themselves (Ryanair, the lowest of the lowest cost European carriers, has experimented with this).

Next up might be your cell phone. Considering that the airlines (and perhaps, by extension, the airport) know when you’re leaving and know where you’ll be leaving from, text messages paid for by duty free boutiques or local concessions could apprise travelers of their existence or offer them coupons. “But who owns that information?” asks Sperring. “I think the airport would argue that it owns the flight information, but the airline would argue that it owns the passenger.” And I argue that in the U.S. at least, the sharing of that information between those entities, no matter what the size of the cut involved, would be seen as an egregious breach in privacy.

The relationship between the airport, airlines and the advertising overseer is always a touchy matter. Sperring has it easy in London because Heathrow’s parent, BAA, unequivocally controls the airport, while at LAX, for example, all but a few of the terminals are leased to the airlines, and even at O’Hare, Clear Channel only controls the central corridors –- the carpeted gate areas are the airlines’ own. This leads to sticky situations like the one I stumbled into in Chicago. Clear Channel’s Hickok was under the impression that American Airlines will agree to lease it one of the choicest pieces of real estate in the entire complex –- a blank wall where American’s terminal splits in two. It’s Accenture’s ideal location for its touch screen, but American apparently isn’t having any of it. “They can’t have it,” the airline’s local rep told me, and she made it clear this was American’s last word on the subject.

And even the airport itself may have ideas that run counter to advertising. At Heathrow, which at times resembles a collection of luxury shopping malls with extremely tight security, Sperring and his team have made less headway placing ads in the main shopping corridors. “The lounges are the final frontier,” he said. “Here in the U.K., they want to keep passengers shopping and keep them eating.” His comment echoed what LAX’s Mark Miodovski had told me two weeks before about one of the airport’s historical objections to advertising: “If they’re looking at an ad, they aren’t busy buying things.”

Speaking of LAX, final bids are due today in the bake-off between JCDecaux and Clear Channel for the next 10 years of its advertising existence. Plasma screens, floor-to-ceiling displays, omnipresent billboards and temples to telecom companies—- do they know what they’re in for either way it goes?

Page 1  |  PAGE 2  |  Page 3

About Greg Lindsay

» Folllow me on Twitter.
» Friend me on Facebook.
» Email me.
» See upcoming events.

image
Greg Lindsay is a journalist, urbanist, futurist, and speaker. He is a senior fellow of the New Cities Foundation — where he leads the Connected Mobility Initiative  — and the director of strategy for LACoMotion, a new mobility festival coming to the Arts District of Los Angeles in November 2017.

He is also a non-resident senior fellow of The Atlantic Council’s Foresight, Strategy, and Risks Initiative, a visiting scholar at New York University’s Rudin Center for Transportation Policy & Management, a contributing writer for Fast Company and co-author of Aerotropolis: The Way We’ll Live Next.

» More about Greg Lindsay

Articles by Greg Lindsay

Medium  |  May 1, 2017

The Engine Room

Fast Company  |  January 19, 2017

The Collaboration Software That’s Rejuvenating The Young Global Leaders Of Davos

The Guardian  |  January 13, 2017

What If Uber Kills Public Transport Instead of Cars

Backchannel  |  January 4, 2017

The Office of the Future Is…an Office

New Cities Foundation  |  October 2016

Now Arriving: A Connected Mobility Roadmap for Public Transport

Inc.  |  October 2016

Why Every Business Should Start in a Co-Working Space

Popular Mechanics  |  May 11, 2016

Can the World’s Worst Traffic Problem Be Solved?

The New Republic  |  January/February 2016

Hacking The City

Fast Company  |  September 22, 2015

We Spent Two Weeks Wearing Employee Trackers: Here’s What We Learned

Fast Company  |  September 21, 2015

HR Meets Data: How Your Boss Will Monitor You To Create The Quantified Workplace

Inc.  |  March 2015

Which Contacts Should You Keep in Touch With? Let This Software Tell You

Inc.  |  March 2015

5 Global Cities of the Future

Global Solution Networks  |  December 2014

Cities on the Move

Medium  |  November 2014

Engineering Serendipity

New York University  |  October 2014

Sin City vs. SimCity

Harvard Business Review  |  October 2014

Workspaces That Move People

Inc.  |  April 2014

The Network Effect

Atlantic Cities  |  March 2014

How Las Vegas (Of All Places) May Be About to Reinvent Car Ownership

Wired (UK)  |  October 2013

How to Build a Serendipity Engine

Next American City  |  August 2013

IBM’s Department of Education

» See all articles

Blog

September 18, 2017

Here Comes The Flood: New York 2067, Sea-Level Rise, and the 4th Regional Plan

July 28, 2017

Songdo, City of the Future? Or of Our Hopes and Fears?

July 20, 2017

NewCities Summit 2017: Songdo Redux

July 17, 2017

Seedstars, Ananda Urban Tech, and “Cities as a Service”

» More blog posts