TURCS and CAICOS
John Smith
Chief Executive Officer
Turks and Caicos Islands Airport Authority
October 30, 2015
Connecting the world to Turks and Caicos
You have recently completed phase two of the redevelopment plan. Can you please briefly describe in your own words what was accomplished and how successful it has been in facilitating growth in Turks and Caicos?
There was a clear mandate from the government in 2007 to access or facilitate access to the European market through direct flights. The top priority was to extend the runway so we extended the runway from 7,600 feet to 9,400 feet. With that we were able to encourage other carriers to come. We were successful in that. With that we also extended the apron to accommodate the aircraft as well. We then moved into what we call an intermediate phase. We had a terminal building that quite frankly we had long outgrown. It did not present itself to the level of customer and service befitting of this nation.
We are mindful, however, of the master plan that we are leading up to and will include a building that I refer to as the all-singing all-dancing terminal. The Finance Minister Misick refers to it as the Rolls Royce. But we believe in taking things in steps from the Airport Authority perspective and we therefore facilitated it.
We did a $10 million extension of the existing terminal building to accommodate growth. Now we really are in the moment to see double-digit growth. New carriers are continuing to access the market, improving our connectivity and providing Turks and Caicos with much-needed airlift. We are now concerned about the number of rooms we have particularly at theBeaches Resort. It is a pleasant problem to have and we have made significant strides with the government’s help in working with investors to facilitate the new development.
What is the capacity for the airport to accommodate and increase the number of people?
At the moment the capacity for an airport varies. We tend to look at the peak hour capacity of the airport. We have over seven aircraft working during our four-hourpeak period. Concerning all of the aircraft arriving in the four-hour period, they are now operating outside of that four-hour window as much as possible. What that does is allow us to offer a better service, but in addition to that it improves our utilization, so it is a balancing act. British Airways now operates outside of that window. British Airways started a second flight but they are operating outside of that window. The flight from Ft. Lauderdale isalso now operating outside of that window.
In terms of connections, there are ten airlines now operating at this airport mostly dominated by U.S. carriers. What are the expectations for further airlines in connection to Providentiales both regionally and internationally?
Our strategic focus is to look at accepting markets. We are small enough to know that we do not have the system able to maintain a satisfactory load factor to sustain or attract countries with direct flights from a hub. If we look at Turkish Airlines, it is the fastest growing airline in Europe. We know what they are doing and what their plans are. They are flying to Boston, so that is another hub and we can have direct flights there. We are operating various areas now out of Texas. That is strategic to us. They also looked at it and wondered why they are operating out of Gatwick and not out of Heathrow. Operating out of Gatwickcan give them to other markets. Gatwick is quickly developing as one of the European hubs outside of Heathrow because the hits and the costs of operating out of Heathrow are really high. In addition to that, British Airways operates not through Nassau, to which we have two or three direct flights, but out of Antigua. This has given us the access to the Eastern Caribbean that we did not have before. Antigua is the main hub in the Caribbean. There are also working closely with Beaches. It is strategic to work with Beaches because they are looking to promote dual-island vacations. We have to align ourselves better with the strategy of Beaches in case you get married in Antigua and you have a honeymoon in Turks and Caicos. It makes it more sustainable for us and more cost effective. There is a significant market in Dallas and they are marketing it and we are marketing it. As a direct result of that, we are able to lobby British Airways to put on a backing flight; it used to be one flight. With the runway expansion, we were able to accommodate a 777 aircraft. It now allows us to accommodate a larger aircraft. British Airways is operating out of Gatwick, where the costs are lower. They are able then to yield manage it better and feed into the market because now we can integrate those who want to operate here and those who want to come here, the friends and family market. Now, we were at about 11 percent of the market share in the Caribbean, but where we were not able to access the Caribbean and the friends and family market, we are now able to do so. It also assists Turks and Caicos to capitalize on markets other than the United States because some people cannot fly through Miami because they cannot get visas. So now there are ways to fly directly to the Caribbean.
We have heard that the country might become a regional hub. Is that part of your strategic plan moving forward? What needs to be done? What would that mean to you, being a regional hub?
To be a regional hub is not an immediate focus of our strategic plan. The immediate focus needs to be growth, sustainable growth. We are working closely and doing what we need to do to facilitate that. Creating a hub has to be driven, for the most part, by local carriers in the Caribbean who can recognize the infrastructure that needs to be in place. It forces us to think about how we deal with that because we only go to the United States and they are not prepared to support tons of people. What we do from the airport’s perspective is to put into position the infrastructure that is necessary to facilitate it and that is what we are doing.
So far, from a connectivity point of view, we are rapidly bringing people in from other areas. That in itself is something that we need more of. We need more accommodations as part our initiative. There is nothing else that we want from the competing point of view except to overcome. What kind of hub, what kind of market do we want to accommodate? There is growth in Punta Cana, which has become a hub but it is more mass tourism. One has to be cautious as well and informed about what kind of a hub you are building. We are a high-end market. Do you want to try and come in with a group of individuals, 150 or 200? Is that what you want from your destination? One has to be very careful.
Another thing we aim to do while strategically considering growth in certain areas is to work very closely with the hotel association so we are aligned. The American concerns and the European concerns are different. Americans come to assure a fairer price and are more focused on equality. They lay on the beach and they are happy to do that because they have shorter vacations and they need to pack in as much comfort as they can. Europeans tend to have longer vacations. In Europe, they will fly in and stay longer, ten to fourteen days, but they are very activity driven. They do not mind getting down and dirty. Americans, because the vacation is shorter, want to regenerate themselves, to be pampered.
We are looking at the Brazilian market, which is the next big thing. Some people say that we are ready to go there at this moment, but I beg to differ. It is very strategic and it has to be very much a niche. Brazilians buy a lot. You have to be able to accommodate that. It is not a direct flight because you do not have the number of supporters on that flight, other than the passengers, but they want to be able to buy jewelry, cologne, etc. If they come here in droves and you cannot accommodate them because they are not yet there, they are going to damage the market. The other thing is that Europeans are less forgiving than Americans. If Americans have a bad experience, they will come back. If Europeans come and have a bad experience, they will explode. We have to be careful. With Brazilians, you cannot accommodate them with the shopping, so it requires a change of law. It is not always as straightforward as they would like it to be. When you look at certain analyses, at that time we did not have sufficient inter-land transportation or cargo to come and say we could do it.
We have a fairly sizable Canadian population. It makes sense to tap into that market. That is where our focus is. The challenges we have, their winter coincides with a big period for us and in the big period we do not have enough rooms—hence the importance and the significance of additional rooms. It is very difficult to yield manage a condo market so I have been lobbying the hotels.
So there are new developments that are happening?
Yes. The Marriott and something else will be coming on. One is a thirty-five-story hotel. The government now is trying to say that there will be people making noises at night. I have no objection to forty-eight stories. If you have the world’s number one beach or even number two, you have limited space. You cannot grow that quickly because you do not have the land. The only way is up. My focus would be more on the design to make sure that it is aesthetically pleasing and blends in.
You have recently mentioned that the airport is going to switch to an all-LED light system, which will decrease energy costs and make it more energy efficient. How important is it for the image, the brand of Turks and Caicos, for the government to support more companies and institutions going green?
It is very important. They have a beautiful slogan: Beautiful by Nature. If you are looking to preserve nature, you need to go green. Tourism is the mainstay of the economy. We find ourselves marketing and selling the beauty, which is why people come. We have to preserve it. If we don’t, why would they come?
We are in a global market where we are at all times competing. The main thing we compete on is that we have the world’s top two beaches with pristine waters. We have the little Iguana Island where endangered species are protected and you can get very close to them. It is beautiful. We cannot afford to destroy it. There is also a cost element to the Airport Authority from the perspective of the Airport Authority, and the industries we have here are very expensive. Arguably, it is one of the most stable and reliable in the Caribbean and one that comes with a price. Even so, I have an obligation, as we all do, to improve on what we have, like going green. From the perspective of the LEDs, it has reduced our costs, improved our image, and aligned us with our Beautiful by Nature product.
If you look at the design of the extension, it was done in the same image as Turks and Caicos. We selected wood as a material and when you look at it, it looks like a wave. The white tile ceilings are representative of the seashore. We are taking the other steps and are looking at the development of the South Caicos. We look seriously at recycling water and green water usage. For us, while we may not be fully approved or certified, we are following up and getting approved. There is much that goes into approval and that is what we are focused on.
The experience here at the airport is very important for the people coming here because it is the first and last thing they see during their time on the island. Many would say that the biggest asset to the islands is its people and they are professional and service oriented. Why do people want to work here at the airport? What is it that you tell them about the importance of their job?
We are the gateway not only to the Turks and Caicos but also to the economy of the Turks and Caicos. More than being the main industry, it represents more than 90 percent of the economy of the islands. The trickle-down or multiplier effect from an economic point of view is significant. In addition to that, we establish and continue to drive the establishment of the airport authority as a brand. For the Providenciales airport as a brand we have a separate website. It is important that the vendors recognize and acknowledge the assets of all individuals who work in the airport. We see it as, if you are working at an airport, you are part of a family, so you should spend more time here. We work very closely with the airlines. I spend most of my time walking around, and talking to people and interacting with them. I operate and manage on the basis that I am no more important to the organization than the cleaner, baggage handler, or anyone else. I only perform a different role. What I do impacts and affects them and what they do impacts and affects me and what we do impacts and affects the economy of the Turks and Caicos.
Against that background, we seem to be doing it and have to be doing it. I will never ask an individual to do something that I am not prepared to do. We are a small group. I say to the staff members that they have a right to question any decision I make. I, in return, have an obligation to explain it to them. That is how we operate. You are going to get criticism, but I do not see it as criticism at all. I see it as free, valuable, and right. It is wrong if you do not listen to it. You end up having to bring in a consultant. I have no consultants. When they make a comment, they bring it to my attention. It gives us the opportunity to make gains, not because we are small.
We ought not have the amenities and the facilities. It is not the largest job of work or project that I have had to manage, but it is by far the most significant in that, if that fails, the country’s economy will fail with it. It is a country that I am proud to be a part of and to have had an opportunity to affect and make a difference.
How important has it been for you, both personally and professionally, to take on this project?
I felt and still feel that I have been given an opportunity to make a contribution. I have been fortunate to stay. At the time, I was not prepared to return. I had an offer in Europe. They asked if I would consider returning to Turks and Caicos Islands because they needed me back. I did not know. If I had done so much for so many other places, was it not time to do something for my country? Knowing that it was always my intention to return and retire, I decided to.
My focus has always been to have a wonderful team, to work with them, and to grow capacity and determine how the system can develop local individuals. The trend in sustainability is in the capacity and you need to develop capacity internally. They thought about bringing people in from outside the country, but I decided to form an executive board. I recognize how important it was, me having the exposure, developing outside, having a mentor and someone to guide me. Otherwise I would not have been able to deliver what I have. I would have had neither the scope nor the tools. If I had not had the opportunity to work in pretty much all areas of aviation and to have a very strong international network, I would not be able to deliver. It is all about what you can deliver. I do not judge as much as humanly possible, but for those who do, judge me on my performance. I am only as good as my mark here.
Thank you very much.