Lyon to the Big Apple: A larger than Expected Aviation Opportunity
Skyscanner Industry Trends and Analysis series study shows there is ample market demand for a New York City route from France’s second largest city
As France’s second largest city – a powerhouse of cultural, commercial and banking – Lyon has much in common with New York City. Yet a link between the two cities is lacking. The latest in our Industry Trends and Analysis series examines the opportunity for this currently unserved route and exposes the significant opportunity for a new non-stop route between the two destinations.
A look at the top-line stats
· According to industry sources*, 56,000 passengers travelled between LYS and NYC in 2016, or 77 passengers per day each way
· Based on travellers’ online purchasing behaviour captured by Skyscanner’s Travel Insight tool, we believe the true market potential between the Lyon area and New York City is actually closer to 204,200 passengers (or 279 passengers per day each way). This data was based on attributing searches and booking to the departure airport instead of the user location
Current Origin & Destination market size
According to traditional market data sources there were 56,000* passengers traveling between LYS and NYC airports in 2016. This already represents 77 passengers per day each way without a direct service between the two cities. With these 56,000 return passengers, NYC is LYS’ top unserved destination and the other way around, LYS to NYC is the fifth most unserved destination in Europe after BUD, FLR, GOT and TIA. However, this is without accounting for the true potential of LYS hidden by airline traffic leakage which is due to the extensive train services offered in the area (see Appendix 2 for more info on this).
Traffic leakage analysis
Our two pie charts below show user interest from the Lyon catchment area (appendix 3) for their search for flights to NYC, broken down by the origin airport they select:
- The breakdown by origin airport highlights the leakage to ground transport (CDG, MRS) but also the leakage via self-connections (people travelling on two separate tickets and connecting in LHR, MAD and LGW)
- The airport receiving the most interest is currently CDG which is not surprising given the number of direct options from the airport to NYC and the easy ground transport with a high speed train available. Lyon to Paris CDG can be reached in less than two hours.
- Only 25% of the travel searches from the catchment area to NYC start in LYS; this indicates that the potential outbound traffic measured by traditional databases actually underestimates the true potential by a factor of four!
Top origin airports chosen by users in LYS catchment area
Inbound to LYS, the traffic leakage is less pronounced as shown on the graph below and the correction comes mostly from the self-connections in Europe, so traditional databases actually underestimate the potential by as much 80%.
Top origin airports chosen by users in JFK/EWR catchment area
The catchment area on the NYC side is concentrated in New York and the immediate suburbs for more than 90% of the passenger’s intent to travel to the area.
Given the 56,000 passengers between the two airports with the 47,000 passengers travelling from LYS and 9,000 from NYC, the true potential we identified is over four times that 47,000 total equating to as many as 188,000 from LYS and up to 16,200 for the return leg. This means based on our data analysis, we estimate that there is a demand for over 204,200 journeys, equivalent to 279 passenger per day each way!
Because the true potential is based on actual searches, this route can be addressed by a new non-stop service with low marketing spend, as people are searching for this flight already!
In addition to this immediate potential, additional traffic could be generated through marketing campaigns to:
- extend the catchment area
- increase frequency of travel from the Lyon region to NYC
- Increase interest of US based travellers to travel to the Lyon region.
Of course, on top of the point-to-point potential, JFK or EWR will also serve as a connecting point to/from the US since LYS has only one year-round service to North America.
Lyon to New York City: Some further Insight
Five Key Facts:
- France is the USA’s 3rd biggest market for untapped Origin and Destination potential, but is clearly underserved from the US with only two airports (CDG & NCE) addressing the current demand, and restraining the growing potential of the market !
- New York city (NYC) is LYS’ top unserved destination, with 56,000 passengers each year! And even this figure does not account for the traffic leakages (see below)
- LYS ranks n°5 among the top European markets unserved from NYC. And once again, this figure only includes Origin and Destination and does not account for the leakages. LYS is in fact the top unserved market in France!
- As far as leakages are concerned, bookings from the catchment area to NYC start in LYS which indicates that the potential outbound traffic measured by traditional database underestimate the true potential by a factor of four!
LYS is the best year-round opportunity in France featuring:
- The highest existing Origin &Destination potential in France
- The strongest economic and demographic region in France after Paris … and even the first industrial region in France, before Paris!
- A catchment area which is a top economic partner for the US
- An important share of business travellers
- An opportunity for cargo to support the bottom line
Background Info on traffic leakage & ground transportation
The situation at LYS airport with traffic leakage and competing airports is indeed very unique in France. A passenger living in Lyon can indeed reach Paris-CDG airport in 2 hours thanks to:
§ 9 direct high-speed trains (TGV) each day from Lyon (Part-Dieu) city center to CDG train station (terminal 2)
§ 1 direct low-cost high-speed train (Ouigo) each day from Lyon (Perrache) city center to CDG train station (terminal 2)
§ 22 direct trains each day from Lyon city center to Paris city center (and then surburban trains to CDG): a 3-hour journey in total
This is the main reason why the leakages from Lyon’s region are so important. The situation at the other French airports towards competing airports is very different since it takes:
§ 3h50 to travel from Marseille downtown to CDG train station (terminal 2)
§ 5h30 (minimum) to travel from Toulouse downtown to Paris downtown and then surburban trains to CDG)
§ 5h40 (minimum) to travel from Nice downtown to Paris downtown and then surburban trains to CDG)
Catchment area analysis
In addition to the existing Origin and Destination potential and the leakages presented above, a new LYS-NYC direct service could capture a large area around LYS airport. According to LYS’ passengers survey the LYS catchment area actually includes a wide area from Dijon in the North to the Mediterranean coast (Marseille, Montpellier and Nimes)
And this is once again confirmed by Skyscanner results. A significant user base for searches for ‘LYS-NYC’ is indeed located in Montpellier. Montpellier city centre is only 1h40 away from LYS airport with direct high-speed (TGV) trains and Ouigo (French low cost train – fares from 10€ one-way) available daily to LYS train station.