Smaller airports have fewer departures, seats as airlines shift focus toward profits

McClatchy Washington BureauMay 10, 2013 

US NEWS AIRLINE-SUBSIDY 2 LX

A Fairchild turboprop at the Lake Cumberland Regional Airport waiting to take off from Somerset, Kentucky

DAVID STEPHENSON — Lexington Herald-Leader/MCT

— Medium and small hub airports across the country have fewer flights and fewer seats than they did five years ago, according to a study released this week, but it wasn’t a struggling economy that caused it, according to aviation experts.

The declines were mainly the result of higher fuel prices, industry consolidation and a new focus on profitability over market share, experts said. And though cities of all sizes consider their airports engines of economic growth, many will find it hard to keep the service they have, much less attract new airlines.

Debby McElroy, executive vice president of policy at the Airports Council International-North America, an industry group, said airlines have become risk-averse. Most major carriers have been through bankruptcy. They endured a major terrorist attack and a major recession. In recent years, they’ve begun to enjoy stability and profits.

“Airlines are not adding a lot of new aircraft or new services,” she said. “That strategy has proved successful for them.”

According to the Massachusetts Institute of Technology study, departures at medium hub airports declined 26 percent from 2007 to 2012, and the number of seats declined 21 percent. Small hubs fared only slightly better; departures declined 18 percent and seats declined 13.5 percent.

The trend coincides with the deepest economic downturn in decades, a real estate-fueled crisis that pushed millions of Americans out of work and out of their homes. Air travel declined 9 percent from 2007 to 2009, according to the Bureau of Transportation Statistics. Though it’s rebounded since, airlines cut their domestic flights 13 percent from 2007 to 2012, according to the Department of Transportation’s inspector general.

One reason is the cost of fuel, which accounted for just 10 percent of airlines’ expenses in 2001, according to the department, but rose to 35 percent a decade later.

“It’s not so much the economic downturn that caused this,” said Tom Reich, director of air service development at AvPORTS, a Dulles, Va., firm that owns, leases and manages airports and airport infrastructure. “It’s the price of fuel that’s made these shorter flights less economical.”

Shorter flights that served communities such as Fresno, Calif., saw a 25 percent decline in departures over the five-year period covered by the MIT study. Or Wichita, Kan., which saw a 26 percent drop, and Columbia, S.C., 27 percent. Boise, Idaho, lost almost 40 percent of its departures and Sarastota-Bradenton, Fla., 37 percent.

“Those decreases in departures and seats are from regional jet retirements,” Reich said. “Airlines used to be more in love with the 50-seat (regional jet).”

Airlines still serve those communities with fewer planes, though at higher ticket prices that mostly business travelers are willing to pay. Leisure travelers and bargain seekers now drive to the nearest bigger hub, Reich said.

“The first leg that used to be the regional jet is now in a car,” he said.

Another factor for the decline has been industry consolidation. In the past five years, Delta and Northwest have merged, as have United and Continental. American and US Airways are awaiting approval for their merger. And even traditional low-cost carrier Southwest is integrating the operations of onetime rival AirTran.

The result? The big carriers are more focused on their big hubs and especially on their international business.

Indeed, the MIT study showed growth in some of the bigger hubs. Departures in Charlotte, N.C., a hub for US Airways, increased almost 10 percent from 2007 to 2012, while the number of seats rose 12.5 percent. Miami, an international gateway for American, posted a 1 percent bump in departures and a nearly 6 percent increase in seats.

“I have fewer aircraft, and I want to put those aircraft where they can make the most money,” McElroy said.

Email: ctate@mcclatchydc.com; Twitter: @tatecurtis

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