Saturday, July 9, 2011

Midsize airports hit hardest - Sacramento Bee

The airlines' deep cutbacks in flights over the last three years have fallen unevenly across the country, largely sparing the nation's biggest airports while hitting midsize airports the hardest.

In the last five years, a review of government statistics shows, air service most often dropped at midsize airports and cities where jobs disappeared or housing prices collapsed. Las Vegas, Phoenix and Detroit, for instance, all lost flights in the 12 months that ended in March.

But traffic has risen at airports where the regional economies have fared better – Denver, San Francisco and Charlotte, N.C., among them.

As a result, the cutbacks are redrawing the nation's air service map to reflect the industry's new priorities and changed economics.

As recently as a decade ago, the airlines put a premium on growth, competed on every possible route and sought to connect to even the farthest outposts. Now, they are emphasizing fiscal discipline, which means paring back service to many cities and forgoing unprofitable destinations altogether as higher fuel prices weigh on their bottom line.

"The airlines are shrinking and putting a premium on their core network," said Jeffrey Breen, founder and president of Cambridge Aviation Research, a consulting firm. "The bottom states have suffered most and have not kept up with the growth in the most robust airports in the country."

Data collected by the Airports Council International, a trade group, found that the nation's smallest airports lost 10 percent to 15 percent of their scheduled flights from June 2006 through June 2011. Medium-size airports, meanwhile, lost 18 percent of their scheduled flights. But the biggest airports fared relatively better; their traffic dropped by only 2.3 percent over that same five-year period.

The top 50 airports now represent more than 80 percent of all passenger departures, while the 200 smallest airports account for less than 3 percent of passengers.

"How much air service do we really need in Kalamazoo, Mich., or Terre Haute, Ind., where manufacturing was once important?" asked William S. Swelbar, an industry expert at the Massachusetts Institute of Technology. "Do we really need airports there today? Sick economies and high fuel are not going to attract airlines."

And because fuel prices remain high, the airlines may accelerate their cuts in capacity by the end of the year once the busy summer travel period ends.

In the five months through May, the latest period with available figures, 295 of some 500 airports in the nation had fewer flights than in the same period last year. In 2010, 315 airports reported fewer flights than the previous year, compared with 414 in 2009.

Nearly 200 airports, most of them tiny and many in remote places, have lost air servi

Spencer Dickerson, senior executive vice president of the American Association of Airport Executives, said airline cutbacks were a major challenge. "But in the end, the bottom line is the marketplace," he said. "If the passengers aren't there, it's really hard for the airlines to justify the service."

Smaller airports may continue to lose service in coming years, while the biggest hubs will become more crowded. The Federal Aviation Administration expects 550 million more passengers to be flying in 2031 than in 2010. It expects the biggest growth will be in the nation's top hubs.

Mergers among airlines in recent years have also contributed to the cutbacks. The drop in traffic in Cincinnati, for instance, came as Delta decided to focus on Detroit after merging with Northwest Airlines.

Similarly, St. Louis suffered a major blow when American Airlines decided to shut down a hub operation it inherited when it bought the assets of TWA. Like most of the network carriers, American has decided to focus on its biggest hubs – including Dallas-Fort Worth and Miami.

That means airports must compete more fiercely than ever for service, Meyer said, and must be willing to offer incentives to airlines, including lower gate or landing fees.

Roger Cohen, who heads the Regional Airline Association, said airports should offer carriers a compelling reason to fly into their communities: "It's like dating, where attitude is everything. You want to show you're interested in the relationship."

The expansion of low-cost airlines has also hurt some airports, because the lower fares often make it worthwhile for passengers to drive longer distances. Since 1990, four of the top five airports with the biggest gains in traffic, including Baltimore-Washington, Salt Lake City and Fort Lauderdale, Fla., are served by low-cost airlines, according to MIT's Swelbar.

Smaller airports may also fall victim to the grounding and phasing out of regional airplanes, like the MD-80s. These smaller jets, for which there are no current replacements, cannot pay for themselves when fuel prices are high because they have too few seats to be profitable.

"We've reached a point where some types of aircraft that used to provide good service to smaller communities aren't economically viable anymore," said Breen, of Cambridge Aviation Research.

FLIGHT CUTBACKS

Gina Swankie, a spokeswoman for Sacramento International Airport, said the total number of flights at Sacramento International has declined since 2006.

The local airport started feeling the pinch in 2008, when high fuel prices and the economic downturn saw the departure of ExpressJet and Aloha, and service cutbacks by Southwest, Frontier, Horizon and American, Swankie said.

Precise figures on total flights were not available Friday, but Sacramento International statistics show about 10.7 million passengers going through the airport in 2007. In 2008, that dropped to 9.9 million. About 8.9 million passengers traveled through the local airport in both 2009 and 2010.

– Mark Glover

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