Posted by: Dean Foust on July 08
Most of the major airlines have announced 10% cuts in service commencing later this year, and some have already trimming back service to smaller markets: Delta and American each announced they would no longer serve San Luis Obispo, Calif., United said it would move from year-round to seasonal service in Myrtle Beach, S.C., and American—via its sister airline American Eagle—is cutting service in three state capitals: Albany, N.Y.; Providence; and Harrisburg, Pa.
By the time the dust settles, the cuts could really hit smaller markets hard. The Business Travel Coalition has created a website, Save My Airport!, that’s intended to spotlight the risk to smaller markets and presumably to stir up civic opposition to the cuts. At this website, BTC has put together a list of 50 larger airports at risk of having service sharply curtailed and 100 smaller airports that could even see service eliminated completely.
Among the large airports most at risk, BTC lists Birmingham, Ala., Albany, N.Y. and Milwaukee. Small airports that could see service completely eliminated, by BTC’s estimations at least, include Cedar Rapids, Iowa, Bakersfield, Calif., and South Bend, Ind. (photo, right).
But this raises the question: Should we really be concerned by this?
An update to the original posting: One person I subsequently talked to in the airline industry felt that the BTC's criteria for airports "at risk" was flimsy. The BTC explains its criteria here, but basically the group looked at proximity to larger airports, the mix of business and leisure travelers, the composition of service (small regional jets, turboprops, bigger jets, etc.). And an executive I spoke to at one airline dismissed the notion that airlines would wholesale pull out of smaller markets. The exec said that the airlines would be careful to make sure there was at least one carrier or a few flights left--because completely pulling the plug on a city would likely incite members of Congress to pursue legislation mandating service to smaller markets.
For these cities, there's a certain civic pride that comes with having direct service--and particularly from multiple airlines--and the city fathers will probably argue that either cuts in or elimination of air service makes it much harder to recruit corporations looking to locate a new manufacturing plant, call center or such.
There's a little truth there, but corporations will work around this problem if all the other variables--labor costs, land costs, etc.--are conducive to bringing in jobs. Heck, they'll even fly their own private planes. Remember that Midwest Airlines was founded when Kimberly-Clark wanted to provide direct flights for company executives and engineers between the company's Neenah (Wis.) headquarters and its mills.
But fares were rarely cheap in these cities (except where city officials provided subsidies) and most of these airports lie within a couple of hours of major hub cities, so it just means that residents will have to drive a little further. How much time do residents of Greenville, S.C., really save by having "direct" flights if their "direct" flights are all routed through either Charlotte or Atlanta? Meaning that any time you "save" by flying direct instead of driving to Charlotte is offset by the time you spend racing through another airport to catch your connecting flight.
Will there be economic repercussions from this trend? It's likely, and could accelerate the ongoing trend toward more consolidation and growth around major metro areas -- creating gains for cities like Dallas, Atlanta and Washington D.C. at the expense of cities like Corpus Christi, Augusta and Norfolk.
Good or bad? Discuss.
(Note: The original version of this blog entry contained an error, which a reader ("Owen") pointed out. It's American that's pulling out of San Luis Obispo, not United. Owen's right. Mistake corrected, and thanks for catching my error. And another reader--"David"--pointed out that Galveston probably wasn't a good example for a small city being hurt, since most folks there already fly out of Houston. Corpus Christi was on the BTC's list, so I made a substitution there.)
One beneficiary of smaller airports closing will be rental car companies. I recently flew to Lexington, KY from DCA. I had to spend hours in Atlanta to get there. On the way home I had to be at Lexington Airport at 4:45 to get to Cincinatti for a two hour layover for a flight at 8:55. I would rather have rented a car and driven right to Cincinatti two hours away. Each connection is just another opportunity for mechanical or weather delays.
I never truly understood the need for many small airports, while a relatively small investment into the infrastructure would create a reliable, safe and more ecological way to get from the small communities to the larger hubs.
Currently when the boarding time has grown, parking, gas, and toll costs are growing, having a modern higher speed land transport should be more efficient on both the time and money scale.
I think the issue is not that we all wanted to go to these cities and we should care or not, but rather the ability for Americans to fly between most larger cities as a means of modern transportation as opposed to slower means such as car or trains. It feels like the de-industrialization of our country.
Overall there will be less choices and opportunity for us with much more control over our movement by government and large corporations.
Perhaps high speed "mag-lev" rails between the feeder airports are needed, of course fed by new nuclear plants.
We should care a lot. Smaller airports help to balance the load both on the airspace and on the ground and provide convenient options for many travelers and critical access for many communities.
The industry will return to a new equilibrium eventually and smaller airports (meaning from about #50 in terms of traffic to #400) will provide a critical resource for non-stop and connecting traffic, as well as a reliever to major airports.
Currently my preferred pattern of travel (both for business and leisure) is to leave Madison after a full workday and to reach my destination by midnight. Correspondingly, I often return in the early morning of anothe workday. Without flights to and from Madison this would not longer be possible.
Driving to Milwaukee or Chicago is no option because I have no car. There is bus service from Madison to MKE, ORD, and MDW, but by the time I can arrive there, most flights will have left. I would also have to return the night before my next workday. Weekend trips to most destinations would become unattractive.
If I had as much vacation as a typical European employee enjoys, I would be less concerned. I even would be happy to take the train to any place in the contiguous 48, or even the bus if no overnight travel is involved. But Madison hasn't seen a scheduled passenger train since 1971, bus service to places other than Milwaukee and Chicago is sparse and operated by Greyhound, and on top of it it is unlikely that vacation plans in the U.S. will change.
Being a resident of South Bend, I should hope that, at the most we'll see only a reduction of service. While it is true we are 90ish miles from Chicago, it is really unpleasant to drive there. Rail or bus services is time consuming. It is almost always worth an extra $100 to fly directly out of South Bend. I have to admit that recently it has been a bit more expensive.
I do love visiting Chicago, but I really despise going there for my air travel. Perhaps the slightly longer drive to Indianapolis would be better...
Kudos G2ok! You read my mind... Americans really need to reevaluate nuclear power.
Japan and France both derive most of their power from Nuclear. Is it any wonder france wouldn't go to Iraq with us? They didn't care because they aren't dependent on foreign oil. There's a lesson in that for us.
It's really scary to me how our infrastructure has been built up completely around the assumption of cheap oil. We need better public transit and electric cars that are fed by Nuclear power!!
Way to go, G2ok and Elanor, but let's go all the way there! Where's our Manhattan Project for fusion reactors? Fusion reactors don't make any harmful radioactive waste. I'm all for nukes until our fusion reactors are ready, but let's get them DONE. Then WE can sell the rest of the world clean cheap power.
First of all, forget the nukes, they're so dangerous, no country should have even one. Second, the same factors causing airport closures are causing the elimination of rail and bus service. You may be forced to drive from the nearest transportation station to your destination. I wonder if people would be willing to pay more to rent hybrid and electric vehicles?
the 800-lb gorilla in the room is the cost of these flights.
who among us would be willing to swallow a 100 percent increase in fares to keep our convenient small-town hubs? what about 200 percent?
flying has become too cheap, and while i've reaped the benefits of cheaper flights, the de-valuing of air travel is evident in lots of places -- the junkers that many airlines put out there as their means of conveyance is the exhibit A.
i'm not sure that closing smaller airports is a good solution, but the economics of a free market system may dictate it.
'course, if we all start paying more, the opposite may happen.
This article is garbage. The author pulled the information from a website has done zero fact checking.
In South Bend all indications seem to point to a possibility of reduction in service but no one reputable has indicated elimination in service. No airline has announced any intention to eliminate service.
I have see bloggers put out better articles than this "journalist." I would certainly like to see him provide additional data to back up the statements made here and prove me wrong.
Are you sure about United leaving San Luis Obispo. We who live here were told Delta and American were leaving I believe you made a mistake and should correct it.
does the author know geography? How does a loss in Galveston aid Dallas? Houston yes - Dallas no!!
Even before the price of fuel went crazy, the airline industry had too much capacity. Too many planes, too many regional jets, too many seats. Many of the cut backs in service are necessary. Many of the airports served on the endangered list have too many planes taking off and arriving with too few passengers. I would suspect that the airline load factors (for passengers) is well below desired revenue targets that the airlines have set. That being said, the reality is, is that these changes need to happen. Another consideration is that passenger airlines are not all that take off and arrive at airports. Many of these airports are served well by cargo carriers like Fedex, UPS and for now, DHL. Many of these airports serve the general aviation community quite well. The jobs that support cargo and private aviation are general higher paying than the passenger airline jobs. Of course, I am not speaking to the flying public's concern over the decreasing choices for convenient air travel but then again, if you've looked around lately, air travel is not convenient nor are there many good choices. The choices that the airlines are making now are necessary for their own survival. They are in business to make money not be a convenience. The airports may likely get reduced air service but the airports will survive and in some cases thrive with new model carriers like Alliegent, (94% load factors!).
With better internet conferencing technology, how much business travel is really necessary? Much of what businesspeople do is transferring information from one person to another. Lots of that can be done without face-to-face meeting.
I'll readily admit that communication over the internet (or its ancient cousin, the telephone) often isn't as effective as in-person communication, but the difference doesn't have to be as great as people want to believe. We assume that face-to-face interaction is so much better, but how much of that is based on the fact that we haven't been forced to get comfortable with the new paradigm. Higher jet fuel prices may force the issue, and then we'll discover that the internet is not so inferior after all.
I suspect too that lots of the desire for business travel is based on pressure imposed by competitors: If you're trying to sell a prospect and if your competitor pays a visit to his office and you're trying to do everything from a distance, then of course you're at a big disadvantage. But if rising travel costs force your competitors to stay home too, it's all a wash.
I'm not sure how Galveston is hurt here - it's in the Houston metro area, which is sure to gain from consolidation. Galveston's got an airport, but I don't think any commercial airlines fly there. Everyone I know in Galveston flies out of IAH or HOU in Houston.
The article is slightly incorrect. It was American Airlines (and Delta) that announced the end of service to San Luis Obispo, CA - not United.
Whenever something happens that generates a lot of attention, you can count on a lot of expert commentary. In some cases, the expert really merits the label and is worth a listen. But most so-called experts fit into one of two other categories.
First is the instant expert who knows little but has a lot to say. All those water cooler experts on gymnastics and diving who will comment during the Olympics are the best example of this.
The second, and more insidious kind, are those who seek to take advantage of a difficult situation by fanning flames of fear, seeking to draw attention to themselves. An example of this kind of expert is the Business Travel Coalition (BTC) which is trying to use the current aviation industry crisis caused by high fuel prices to breed fear in communities around the country and make a name for themselves in the process.
The BTC has conducted a study, which is what this kind of “expert” usually does. They have decided to list dozens of airports they say will be losing their service in “Save My Airport.”
I just returned from a meeting with dozens of airport directors, most in smaller communities that are at risk. Indeed, all have lost some service. But all of them, and their communities, together with their airline partners, are working hard to keep their communities linked to the air travel system. They all know, as do their constituents, that there is a fuel crisis, that times have changed, and that innovative action is called for. They are working to protect their communities and their economic growth.
What they don’t need is an organization a thousand miles away jumping in and fanning into fear their community’s legitimate concerns about air service. What they don’t need is an organization looking for attention, and revenue, by taking advantage of a crisis.
I went to their web site. It includes an ominous heading: “Airports at Risk.” It has a list of 50. I have spoken to some of those airport directors and they are outraged by what BTC is doing. BTC has no idea what is going on in their communities, and is hampering their efforts to meet the challenges they face. All BTC has are some criteria they made up in their ivory tower and a study that results from putting those criteria into a computer and pushing a button. They have no idea what is going on in those communities.
That is also obvious when you click on some of the links under the ominous headlines that predict the demise of this or that airport. The actual news items they are linked to tell stories of communities working hard. In at least one case, the link takes you to a story featuring an airport director saying the BTC is wrong. But you have to dig deep to find this. What they want you to do is read their headlines, get scared, and send an email and “sign up.” Must be time for a BTC membership drive.
Someone once said that an expert is someone more than 50 miles from home. I guess by that definition the BTC qualifies. But by no other.
Squeezebox:
The French have made around 80% od their electricity from fission reactors for many years. you arguments are baseless.
This is another indication of the effects of 30 years or so of poor to non-existent transportation policy in the United States. The National Airspace System (NAS) the Interstate Highway System, the rail system and our sea ports are all insufficient for the country's needs. We are being slapped by the invisible hand of Adam Smith for our failure to hold the Federal Government accountable as the stewards of the resources of the richest country in the history of the world. It may well be too late to correct our mistake. Without a solid transportation infrastructure that has capacity well in excess of the demand the economy is capable of generating we are effectively and completely stopped in our tracks. Get used to mediocre economic growth, long delays and travel hassles and shipping delays for your goods. Don’t forget higher prices too because what little capacity there is to all these systems will go to the highest bidder.
First, you need to understand that the BTC report is a poorly researched study. Ask them for the data behind the suppositions. There is none. They took some "criteria" that may or may not have any validity and applied it as gospel.
I live 50 minutes from the Greenville/Spartanburg Airport (referenced in the article). I am also about 2 hours from Charlotte and 2 1/2 hours from Atlanta. The key thing with those figures is that I can COUNT ON only 50 minutes to GSP. With traffic in the bigger cities, you can never know how long it will take.
Additionally, I can park in long-term parking at GSP, walk to the terminal, go to check-in and security and be at my gate in about 20 minutes. In ATL or CLT, it might take 20 minutes to find a parking space---much less take a shuttle to the terminal, stand in line at the counter and then at security!
Hooray for GSP!
The issue today with airlines is they have tried to be too many things to too many market segments. As a result they are not competive or profitable in any market. It's not just fuel prices or the falling dollar it is corperate structure and managment philosphy. It may be time to do such things as complete separation of the Regional Market from the Main line and international markets and along with that completely restructure the Essential Air Service program to actually reward cost control by both the airport and the airlines. We are on the verge of a complete airline failure and need to now start thinking or how to resurrect Air Service from the ashes of that collapse.
BusinessWeek editors Dean Foust and Justin Bachman provide road warriors with the latest news, trends in business travel, which as most readers are aware, has all the romance of taking a school bus cross country. Come here to pick up travel news and tips or just commiserate about your latest business trip gone awry.