Friday, November 17, 2017
Business

Tampa International playing its own version of 'Moneyball' to bring in new business

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TAMPA

Joe Lopano reels off airport statistics in much the same way Tampa Bay Rays manager Joe Maddon runs down batting averages. • Lopano, the CEO of Tampa International Airport, knows that 35 percent of Pinellas hotel guests rented cars in Orlando. He knows that the Tampa-St. Petersburg-Sarasota market has an effective buying income of $96 billion — more spending power than any other metro Florida market. And he knows that his airport serves a massive market: 3.5 million people are within a one-hour drive. • He has this in common with Maddon as well: Just as the Rays use statistical analysis to contend with the big-spending Yankees and Red Sox, Tampa International uses analytics to compete with busier airports in Orlando and Miami. • Lopano is playing his own version of Moneyball, the title of the 2003 Michael Lewis book that traced the rise of statistical analysis — sabermetrics — in helping small-market teams like the Oakland A's and Rays find good, affordable players to take on baseball's far richer teams.

The stakes for Tampa Bay are high. Every new daily nonstop international flight to a major city generates $154 million economic impact annually for the bay area — and 1,200 new jobs.

"The numbers say it all," Lopano said. "I'm old enough to remember the days when airlines flew to a place and sort of guessed they'd be successful. But jet fuel was 25 cents a gallon.

"Now the aircraft are $200 million units and you burn $100,000 every time you fly. Now it's all about analytics."

In Moneyball, the movie, Brad Pitt plays Oakland A's general manager Billy Beane, who transformed the team's traditional use of scouts to evaluate baseball talent to a data-driven approach.

Tampa International's vice president of business planning and IT Damian Brooke, his head shaved, his goatee turning white, knows Pitt is not going to play him in any movie.

"Maybe Jonah Hill," he said, referring to Pitt's Moneyball co-star. "He was the numbers guy."

Brooke is the numbers guy at Tampa International, just as he was at Dallas-Fort Worth International Airport, where he worked for Lopano.

Brooke was a runway rat-turned-airport consultant for Sabre Airline Solutions in Texas. Airport analytics was a growing field when he got this idea in 2005: There had to be a better way to drill down into the national data of airline flights, which the federal government released six months late, to identify patterns and trends.

So he hired two programmers at $20 an hour to build him a better, faster database. Three months later it was ready. The latest iteration of Sabre's Airport Data Intelligence software now sifts through more than 35 databases, provides instant figures and is used by more than 200 airports. The data show who bought tickets, where they live and what airports they used, their destinations, what connecting flights they took, and even where they rented their cars.

Brooke left Sabre, which still owns the product. Now he uses what he helped build.

"If it was owned by me," Brooke said, "I'd be in a different income bracket right now."

Tired of consulting and traveling, Brooke went to work for Lopano in Dallas in 2005.

In Lopano he found a boss ideally suited to understanding the importance of data. Lopano had spent seven years as a marketing director at Continental Airlines, scouting for new routes. In the 1990s, he was hired to do the same job for Dallas-Fort Worth International Airport, which wanted him to persuade airlines to fly more routes to DFW.

"I worked the airline side, so airports would come to me and say 'I want you to put an airplane in our market,' " Lopano said. "It's all about analytics and sustainability. When I came to the airport side, I didn't know any other way of doing it."

In 2010, the Hillsborough County Aviation Authority hired him to boost passenger traffic and lure international flights back to Tampa, routes that had been lost to other Florida airports.

According to airport data, Tampa now has 24 nonstop international flights a week. But Orlando and Orlando Sanford international airports have a combined 199 international flights.

One of the first things Lopano did was beef up Tampa's statistical capabilities, buying new databases and bringing in his old analytic and sales team from Dallas.

"We spend a lot of time on analytics and data-mining so we can understand if an airline can make money and why they can make money," Lopano said. "Then we go to them with data and information they may not have."

Tampa International's vice president of marketing, Chris Minner, also followed Lopano from Dallas. Together, he and Brooke spent their first three months at the airport working with just databases and spreadsheets.

"We're a culture that's completely data-driven," Minner said. "We were up every night until 1 a.m. burning through the airline data, trying to crunch the numbers and figure out where are the missed opportunities for Tampa International? What are the top underserved markets?"

That analysis has helped Tampa secure new daily routes to Cuba and Switzerland this year. British Airways also added two flights a week and now flies daily.

Thanks to those new routes, Tampa now has nine new international flights a week and has boosted international travel by 20 percent in the first seven months of this year.

That hasn't boosted overall passenger traffic, but airport officials are still pleased.

That's because international travelers spend more money.

Last year, Tampa International persuaded Edelweiss Air to scrap its Orlando-to-Zurich route for Tampa-to-Zurich. The airline started flying twice a week to Tampa in May.

Edelweiss Air business development manager Michael Trestl said the airline wasn't aware of the area's strengths. In fact, Edelweiss hadn't been pitched by Tampa before.

"Tampa International Airport used a wide spectrum of different numbers and statistics, analytics, to get the attention of Edelweiss to Tampa," he said. "We had not really been aware of the Tampa Bay market, and what it had to offer, its great diversity and potential. We actually have been very surprised by their presentation."

Edelweiss was especially interested in the size of the market: There were 3.5 million people within an hour's drive of the airport and 7.3 million within two hours.

The airport also showed them a list of more than 30 Tampa Bay companies that do business with Switzerland, and the 24 Swiss companies like Nestle SA, Credit Suisse Group AG and Zurich Financial Services that have subsidiaries here.

Lopano also pointed out how many European travelers fly to Orlando but end up in Tampa Bay: 35 percent of Pinellas beach-goers rented cars in Orlando.

"So what they really want to do is go to the beach," Lopano said. "That was a startling revelation to them."

Of course, it also helped that the airport and local tourism agencies provided Edelweiss with $700,000 in incentives. It was the first time Lopano put together an incentive package for Tampa, something he first used in Dallas a decade ago.

"We are actually very glad with the results so far," Trestl said. "We are very optimistic to achieve our expectations for the first business year."

So far, the route is paying off for both the airport and airline. The Zurich route is Tampa's first new daily nonstop to Europe in 15 years. Tampa's analysis is borne out by the numbers. In three months, the load factors (passengers and luggage) of Edelweiss flights out of Tampa was 71 percent. In Orlando, it was 44 percent.

"We were able to convince them to shift over there, partly because of the incentive program, but also because there was the opportunity for sustained profitmaking here," Lopano said. "That's what really drives these guys' decisionmaking.

"It's not because they like you. It's because they can make money."

Lopano's just getting started. Tampa International has identified several other new markets that it believes can sustain flights: Brazil, Germany, Mexico, Panama, Colombia and the Caribbean.

Tampa Mayor Bob Buckhorn, who sits on the airport board, got a taste of the Moneyball approach when he helped Lopano make a pitch to Copa Airlines in Panama.

"You cannot go to the CEO or an airline and make the case that we have great beaches or great amusement parks and expect them to add flights," Buckhorn said. "They're going to want to know how many bodies are going to be in the seats, and where they're coming from and how far they're going, and we can track all that through analytics."

Analytics also will determine the future of the Tampa-to-Zurich route. Whether the airline increases flights to Tampa or pulls back will be based solely on the numbers.

"We are looking at these metrics on a constant basis," Trestl said.

Analytics also showed how far Tampa's international business had fallen.

According to the airport's data, 76 percent of bay area fliers buying tickets to South America used another airport — that's more than 13,000 customers that the airport lost.

The number of fliers Tampa lost to other airports includes 65 percent who bought tickets to Central America, 58 percent bound for Mexico and 51 percent going to the Caribbean. Those are customers who live near Tampa International, and the airport is losing their business.

"I don't think there was a lot of focus on international flight development (before his arrival)," Lopano said. "I think the approach we're taking now is much more compelling.

"We've developed the story in a way, a much better way, that's more relevant to more people."

That's what it comes down to in the end: telling Tampa International's story.

Raw data isn't enough. So Lopano uses analytics to shape his sales pitch — to tell the airlines a story they're going to like to hear.

For example, to lure a new Virgin American route to Dallas, Lopano realized that the airline's customer base were technically advanced early-adopters. So in his pitch to Virgin, he pointed out that the area was already supporting three Apple retail stores.

"That engaged them, that there could be an audience for their product," he said, "and the way to prove we had that audience was to find a similar product.

"In this case, it was the Apple stores."

In the case of getting Edelweiss to come to Tampa, Lopano used the statistic that about 35 percent of all Pinellas hotel guests rent their cars in Orlando.

Those rental figures shaped how Lopano now tries to sell Tampa International to all airlines: as a centrally located, easy-to-access airport between Orlando's theme parks and Tampa Bay's beaches.

"The market is not just Tampa," he said. "It's Tampa, it's Sarasota, it's Orlando, it's St. Petersburg, it's Clearwater.

"That's how we want to position ourselves. We call ourselves the gateway to the west coast of Florida."

Correction: An earlier version of the story said the buying income of the Tampa-St. Petersburg-Sarasota market is $96 million. The correct figure is $96 billion.

Jamal Thalji can be reached at [email protected] or (813) 226-3404.

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