Cancelled

Airline Mergers Bring Deep Service Cuts to Small and Midsize Airports


An empty terminal at Boston Logan International Airport in Boston Feb. 8, 2013

Photograph by Scott Eisen/Bloomberg

An empty terminal at Boston Logan International Airport in Boston Feb. 8, 2013

The financial benefits of airline mergers are well known at this point. Less-widely documented are the deep reductions in airline service that leave travelers at scores of smaller airports with far fewer flights.

Now there’s new data (pdf) on all the flight cuts during the wave of mergers over the past seven years, courtesy of the Government Accountability Office. In the process of building this week’s report on air service to small communities, federal researchers tallied the overall changes in airline service since 2007. Nearly three dozen midsize airports—in such places as Milwaukee, New Orleans, Pittsburgh, and San Antonio—lost nearly one-quarter of their flights in the period. A group of 76 small airports lost 20 percent of their pre-2007 flights. And 23 airports lost all their air service.

Not every small airport suffered in the period. Airports in the Essential Air Service (EAS) program, a federal effort that subsidies air travel to such places as Muscle Shoals and other tiny towns, saw a 20 percent increase in flights. (The researchers excluded the essential service funding in Alaska, where a large percentage of flights are covered by the program.) Funding for EAS has more than doubled since 2002, reaching $232 million last year, and Congress has been examining the marked shifts in air service caused by consolidation and other changes in air service. On average, the small airports involved receive nearly $2 million each year, far more than when EAS was launched in 1978.

For the flight-losing airports, rising fuel prices have driven the economics of retreat. The big jump in jet fuel prices provided a rationale for the mergers, and the combined carriers have, in turn, focused on flying routes that generate the best financial returns: larger cities and those with hub airports. At the 29 U.S. airports classified as large—meaning they have at least 1 percent of annual U.S. boardings—flights decreased only 9 percent. According to federal data, 88 percent of all U.S. passenger boardings occur at just 62 airports.

Another factor pushing airlines away from less-populated cities is the declining use of small, 37-and 50-seat regional jets, which have fallen out of favor because of their high operating costs. Many parts of the Midwest and Great Plains have lost population in the past three decades, reinforcing the business decision to trim air service to those regions.

As Congress weighs cuts to EAS funding that keeps runway lights on at many minor airports, the latest research report echoes one idea first proposed five years ago: moving small-town travelers to larger airports by bus.

Bachman is an associate editor for Businessweek.com.

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