Case Study 7 - Faro International Airport

transport accessibility by the large amount of urban and suburban services available at the Gare do Oriente station.

Since the initial hypothesis was not confirmed, no new services are needed and no change in the prevailing business models is necessary. As it was mentioned above, transport market regulated and balanced, so, passengers that need to travel to the small-city are using other transport (i.e. private car) and not train plus other mode.

In theory, because surveys were only done at the railway station, it is possible that there are several potential customers for those bus services feeding the intermediate railway stations that currently use another transport mode for their long distance trip, for example, private car. We believe this is not the case, because in any case the travel time by car or bus from those small cities to the Oriente station is rather short (always below 30 minutes) and so the advantages of using the rail for the long distance trip are already within reach.

lines. The offered bus service between airport and the city centre starts at 5 a.m. and ends at 11 p.m. more or less during the summer.

Private bus (shuttle) services are also available at the airport. These services can either be booked on-line directly to the transport providers, or as a transfer service in a hotel package. The private bus operators cannot directly sell tickets to the passengers at the airport.

There is a wide and permanent offer of taxi services. Besides normal taxi services there is a special taxi for tourist passengers that is more expensive. Taxis are one of the most common options to leave Faro Airport.

The agents with relevancy for the definition of the business models are:

• Passengers;

• Airport of Faro Manager (ANA);

• Rent-a-Car companies;

• Taxis;

• Public Transport;

• Private Shuttle Companies;

• Hotels.

8.8.2 Current Business Model

According to Osterwalder (2004) there are nine building blocks Customer Segments (CS), Value Propositions (VP), Channels (CH), Customer Relationships (CR), Revenue Streams (R$), Key Resources (KR), Key Activities (KA), Key Partnerships (KP) and Cost Structure (C$).

Figure 8.16 - Current Business Model of Faro Airport

The business model is defined from the perspective of the airport manager. In this sense, we may say that intermodal transport is not included in the current value proposition of the airport.

8.8.3 Current Level of Quality and Missing Links

There are several problems affecting the interconnectivity at the Airport of Faro.

These problems are visible at the various levels of decision. At strategic level, we could identify a lack of strategic alignment between stakeholders. Indeed, intermodal transport is not a priority for any of the stakeholders. They are only interested in providing their own transport service, and essentially consider all the others as competitors, in particular, in the land based transport providers.

At tactical and operational levels, we could identify the following barriers, such as:

- Information - there is no available aggregated information concerning the several transport solutions. Each mode of transport only offers information about its own services;

- Ticketing - there is no integrated fare system. The passenger needs to buy a ticket for each leg;

- Scheduling - there is no integration of schedules. This problem is somewhat reduced since the majority of the passenger use flexible land based transport services, such as: taxi, rented cars or private shuttle.

The airport is being negatively affected by the lack of intermodality, which is evidenced in the growing amount of negative reviews and references posted by the passengers on some major international travel websites. Therefore, the airport is in a key position to perform the role of facilitator and negotiator, between all transport providers. Finally, the airport plays a key role in the economical development of the region. It has therefore some degree of influence in many other agents, such as:

municipalities, hotels and similar, which can be fundamental for the viability of the proposed business model.

8.8.4 Changes for improved Interconnectivity

In order to overcome the current problem and to implement a truly intermodal service between the air and the land based transport services, we propose to include air-land intermodality into the value proposition of the airport. We propose to implement a flexible small-scale collective transport service integrated with the air transport, in terms of tariffs, scheduling and information. The collective transport service will provide transport to some destinations in the region of Algarve.

Passengers would be offered a seamless transport journey, since their airport of origin until their final destination in Algarve. By seamless we understand no (or short) waiting time at the airport and direct transport to final destination. In Figure 8.17 we present the canvas according to Osterwalder for the new business model.

Figure 8.17 – Proposed Business Model for Faro Airport

The FCTS operator will concentrate all the information about the new service, including schedules and tariffs. The basic sales channel must be a clearly marked counter on the arrivals hall, although it is possibly useful to consider from the beginning a web-based sales channel. Another channel is foreseen, which consists in selling tickets on board aircrafts. This will imply the establishment of a commercial agreement with the air transport companies.