Why was the construction of the new Daular Airport postponed??

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A few days ago the media noise began that was seen coming a few months ago, the start of construction of the new airport was delayed, But why was the construction of the new Daular Airport postponed??

Possibly, remember that a few months ago I published a mega post about the story, present, airlines and the construction project they call «Mega Aeropuerto Daular«.

In that post and at least 6 years ago, the Guayaquil authorities with much fanfare had announced that for this year 2018 would begin the construction of such an emblematic project: www.nlarenas.com/2017/06/guayaquil-2018-mega-aeropuerto-daular/.

This project would be or will be the largest airport in the region, thought to have 3 landing strips in their final stage, adaptable and modal terminal so that in its first stage it can support a traffic of 10 million passengers per year and could easily increase to more than 25 millions.

In a land 2.020 acres the possibilities are almost limitless. In this space, the airport would have an enviable growth capacity throughout the region and with one of its 3 tracks with 4.100 meters long, would allow longer direct flights to connect Ecuador with the world.

Why was the construction of the new Daular Airport postponed??

the answer is very easy: both national and international passenger traffic does not justify such a large investment today.

The statistics speak for themselves. Guayaquil Airport in recent years has seen how the number of users does not grow at the rate or speed that a mega investment requires to be justified before investors and municipal authorities.

Despite this growth that exists, the numbers are still not favorable to be able to make an investment that could exceed the $900 million dollars in a construction period of 6 years.

The current terminal has a capacity to handle 7 million and a half passengers per year after the latest extension and improvement launched just last year 2014, and the almost 4 current millions still make it a comfortable terminal and far from collapsing, as it does happen in other airports in the region, such as Lima.

What factors have influenced?

• Quito airport: There are two points here that need to be clarified..
  • First, Tababela in its beginnings did affect domestic traffic in all airports in the country, generated exclusively by the lack of access roads at its inauguration, but in international traffic this airport continues to grow. Ecuadorians were not used to that distance and time, this landscape has been changing.
  • The second, and the most important, is due to the significant attraction of new airlines, frequencies and increased capacity generated thanks to the new facilities, like the runway. How does this affect Guayaquil?? It will be clarified below.
• Economy: It is known that Ecuador has not been in the best economic condition for several years, less income or mistrust, people consume less, therefore travel less, spending less to secure the future.
• fuel subsidy: the elimination of the jet fuel subsidy in the year 2015 brought a significant drop in passenger traffic throughout the country, especially on the Quito route – Guayaquil, which until then was the second most important in Latin America in terms of passengers and daily frequencies.
• distances: new roads have decreased ground travel times and is the main competition for airlines and airports.
• city ​​factor: as i said in the first point, Quito has managed to attract new airlines and frequencies (here I explain it), especially in the international, but this has to do with this aeronautical phrase that I love: «Airlines fly where the business is, where there are passengers.
  • Guayaquil is the most populous city in Ecuador, but this does not mean that people fly more than in Quito. The capital of Ecuador has fewer inhabitants, but its people fly more, both domestically and internationally. if people don't fly, the airlines will not arrive.
  • We are a very small country, despite the fact that both Quito and Guayaquil are important economically and populationally, airlines prefer to operate to a single airport, to the one that will leave the most profit and reach the other in agreement with social or local airlines. Let's say airline X arrives in Quito and connects to Guayaquil local Z, This way you do not spend on personnel and operations in two airports so close.
• Factor Tame: it's no secret to anyone, the Tame crisis affected all airports. They reduced frequencies, they canceled routes and moved others. In the case of Guayaquil, Tame canceled the route to Esmeraldas, Latacunga – Coca and recently to Cuenca, while it also reduced the frequencies to Loja. in the international, moved the most demanded route from Guayaquil, which is New York, to Quito. This year he opened the way to Bogota and keep flying to Fort Lauderdale, help numbers.
• Factor airlines: by the same city factor, Guayaquil has lost Iberia flights, Delta y United, which clearly reduces their numbers and projections. He has won those of Spirit Airlines and Air Europa, but they do not replace the ones that have already left. We hope they return with the numbers on the rise.
• Taxes and fees: the tax factor was discussed in this post and I recommend that you read it and see it in detail: www.nlarenas.com/2018/02/entrevista-costos-tasas-aeroportuarias-quito-guayaquil/
• Ticket costs: the tickets in Ecuador are expensive and you can read that analysis here: www.nlarenas.com/2017/09/por-que-son-tan-caros-los-pasajes-aereos-en-ecuador/. This affects the entire local industry, with more competition, all stakeholders will benefit.
• tourism promotion: Guayaquil has ceded land in a tourist way in front of Quito, where investment to be the gateway to Ecuador It has been superior and the results are evident.

Guayaquil Airport passenger statistics

The municipal authorities of Guayaquil have indicated that to begin construction of the new airport, international passenger traffic has to reach the 3.5 million annually, they are far away now. What is happening at the José Joaquín de Olmedo, is that the airport is growing, but not at the rate 2011 O 2014 and 2015, but growing as the statistics show:

	2014	2015	2016	2017
	3.458.854	3.716.926	3.820.669	3.884.068
Variation		7,5%	2,8%	1,7%

There is a brake on growth, Yes, but that is not why the airport has stopped growing, although globally, have 1 million passengers less than the Quito Airport and a mega investment such as Daular, it's excessive right now.

Domestic passenger statistics

In domestic flights we see a growth from the 2016, but that still has not reached the best year compared, which is the 2015:

	2014	2015	2016	2017
TOTAL	1,803,274	2,184,882	2,052,315	2,085,389

Passengers on domestic routes

The effect of Tame on the routes to Latacunga is clear, Esmeraldas, Loja and Cuenca, plus the noticeable drop in traffic between Quito and Guayaquil after the elimination of the fuel subsidy, although it has grown mainly thanks to the routes to Galapagos:

ROUTES	2014	2015	2016	2017
QUITO-GUAYAQUIL	833.366	739.009	693.950	693.872
GUAYAQUIL-QUITO	824.081	722.226	690.049	727.164
GUAYAQUIL-CUENCA	35.515	31.357	20.114	2.550
CUENCA-GUAYAQUIL	35.763	33.353	20.079	4129
QUITO-GUAYAQUIL-BALTRA		215.016	220.315	249608
BALTRA-GUAYAQUIL-QUITO		219.198	214.488	232653
QUITO-GUAYAQUIL-SAN CRISTOBAL		74.087	73.039	82295
SAN CRISTOBAL-GUAYAQUIL-QUITO		66.908	68.469	74915
GUAYAQUIL-LATACUNGA	7.617	12.027	3.395	304
LATACUNGA-GUAYAQUIL	6.209	11.139	3.382	235
GUAYAQUIL-LOJA	17.730	16.973	11.410	8063
LOJA-GUAYAQUIL	16.966	16.604	11.599	7584
GUAYAQUIL-ESMERALDAS	13.843	14.259	10.943	0
EMERALDS-GUAYAQUIL	12.184	12.726	9.067	0
TOTAL	1.803.274	2.184.882	2.052.315	2.085.389

International passenger statistics

Year 2017, It was the best year for the Guayaquil Airport in recent years. 4 years, a major boost, but very far from 3 million and a half that the authorities seek to start construction:

	2014	2015	2016	2017
TOTAL	1,655,580	1,532,044	1,768,354	1,798,679

Passengers on international routes

The 2017 It was also the best year internationally and far exceeds the 2014. The route to Panama is the one that grows the most and the one that moves the most passengers in Guayaquil, followed by Bogota and Miami, although the latter shows a decrease in passengers transported in the 2017. New York also lowers its number of passengers, once again for the Tame effect:

ROUTES	2014	2015	2016	2017
AMSTERDAM	92.914	96.359	99.601	99.111
ARUBA	N/A	N/A	326	594
BARCELONA (VENEZUELA)	N/A	5.056	40.817	43.994
BOGOTA	204.235	201.762	199.995	237.534
GOOD AIR	54.847	13.230	N/A	N/A
CALI	30.942	32.882	32.616	41.347
CARACAS	39	N/A	335	N/A
THE SAVIOR	55.529	61.032	49.547	50.657
FOR LAUDERDALE	3.795	25.936	41.174	51.251
PEACE	N/A	N/A	3.034	4.270
LIMA	179.470	154.954	182.691	192.709
MADRID	108.176	107.786	118.092	166.700
MIAMI	252.455	256.745	242.562	229.414
NEW YORK	261.919	156.915	267.583	185.949
PANAMA	324.383	342.874	392.997	398.240
SANTIAGO	86.876	76.513	96.984	96.909
TOTAL	1,655,580	1,532,044	1,768,354	1,798,679

Passenger statistics Quito Airport

As a reference and to understand that traffic has also been affected throughout Ecuador, It is good to know the data of the main Ecuadorian airport in domestic and international.

Quito's statistics show, unlike Guayaquil, a decrease the years 2015 and 2016, generated exclusively by domestic flights, since international growth is maintained every year. just the 2017 global growth returned, although driven by the international with 1.5% and -0.9% in the domestic:

	2013	2014	2015	2016	2017
	5.421.106	5.574.019	5.376.544	4.852.530	4.875.166
Variation	2.4%	2.8%	-3.5%	-9.7%	0.5%

*Average variation corresponds to national and international traffic.

Until May 2018, Quito Airport has seen a increase of 4.6% compared to the year 2017, having served in 5 months to 2,058,554 passenger.

** DGAC Statistics, Municipality of Quito and others.

Passenger projections Guayaquil Airport

With current data and based on the growth of the last 4 years, just for the year 2031 Guayaquil Airport would pass the 3 million and a half passengers, taking into account the averages and a projection model:

For that same year 2031, Guayaquil Airport would arrive at 6 million one hundred thousand passengers between domestic and international based on current growth averages. with this number, the airport would still have capacity for 1 million and a half more passengers before reaching its peak:

An additional exercise playing with numbers, if the average annual growth were 8% (varying between the 9% and 7 %), the goal of 3.5 million passengers would be fulfilled before the year 2026:

What can be done?

Guayaquil Airport already has incentives for new airlines, they are doing all this, it is very positive, you have to keep it and push it. The image of the city must be improved as an attractive and profitable destination for these companies, that does not depend on the airport directly.

The Airport cannot do anything about the country's economy, does not correspond to him and is oblivious to his activities. Either, can compete with ground transportation, nor with the city factor, but it can help, ask for help or support for the generation of attraction campaigns, as general ideas being part of tourism fairs, aviation like Routes and others.

Guayaquil as a city, must improve its tourist image worldwide, this corresponds to both the Municipality and the Ecuadorian Government. It depends on this that more foreigners want to fly to Ecuador, therefore more airlines, without forgetting that the people of Guayaquil must also fly abroad, and there, the elimination of the Eco Delta Tax would be very good to reduce the cost of tickets and for more Ecuadorians to fly (help the whole country).

Carrying out market studies for potential new domestic routes is also necessary and that is mainly the job of the airlines., but you must work together and in alliances to generate these documents that will generate benefits for the airport, City and country. For example, a direct route from Guayaquil to El Coca or Lago Agrio could be very attractive., studies will tell.

A differentiating factor must be sought and exploited. Guayaquil is the main economic city of the country, this should be a plus and search for example, the business passenger as a source of growth and attraction of airlines whose business is in that niche.

there's so much more to do, but mainly in a personal way, it's on how to promote, both airport and city. Both must work for a single purpose., not thinking only about the construction of the Daular, but also, in the socio-economic development of the city, that as a benefit it will have to reach the 8 million passengers that allow to start or think about the construction of the Mega Airport.

the only way to grow, is that frequencies are increased, new airlines arrive, destinations that are not currently flown are exploited, those that have left will resume and a great boost will be domestic flights, Much depends on local policies such as the revision of taxes that make tickets more expensive and slow down the air market., that throughout the world is the fundamental axis of development and economy.

short term challenge

The main challenge, given the indefinite postponement of the construction of Daular, It is on the runway at the Guayaquil Airport. The useful life of the last general asphalting ends quickly given the climatic conditions and normal use of the operations.

the track of 2.790 meters, already requires several closures where emergent works are carried out several times, during the year, for patching of the asphalt layer that is worn and affected by the continuous use and normal wear and tear of the operation of the more than 120 daily operations carried out there.

The authorities will now have to locate a specific budget to extend the useful life of the track, possibly requiring a full intervention, with its operational closures for several days to weeks, all depending on how this job is done.

This general and complete maintenance of the track will have to be carried out sooner or later, with the consequent inconvenience for airlines and users due to the closures that will have to be carried out.

In this years, you can seek to continue improving current operations, update procedures and systems to keep the airport current and on par with the rest of the airports in the region, that until today, is over the vast majority.

When will Daular be built? There is no exact date and it will be now, very difficult to know exactly until the authorities in a few years, announce it again.

*** The reason for this post is to show a different vision of what is happening with the Guayaquil Airport and to propose some ideas, that are surely being worked on or have been thought of before.

What should be done to boost the growth of this airport?

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