Impact of the economy on your local regional airport

ZapBrannigan

Old School
Like many corporate and fractional pilots, i am an airline frequent flier. But with cutbacks at our local airport, it is getting harder and harder to get where I need to be (at least with the convenience we've enjoyed in years past.) Is your airport being similarly impacted? Is the drawdown of airline service impacting you, your business, or your family? I thought this would be an interesting topic for Jetcareers.

Piercing the bubble: Current oil crisis poised to knock XNA a few steps backward

By Jeff Mores Staff Writer // jeffm@nwanews.com
Posted on Sunday, July 27, 2008

HIGHFILL — Ask people outside Arkansas to name the fastest-growing regional airport of the past decade. Odds are, Northwest Arkansas Regional Airport isn’t sitting on the tips of their tongues.

Many non-Arkansans aren’t even aware the Highfill-based facility, which has indeed been the fastest-growing, exists.
Roger Cohen, president of the Regional Airline Association and a 35-year veteran in the airline industry, is well aware of XNA.

“ I travel the world talking about the airline industry — and when I point to the poster child for regional aircraft and regional airports, it’s Northwest Arkansas Regional Airport. It’s not even close. The growth, numbers and flights (XNA ) puts up is incredible. It’s been an incredible story from Day 1. ”
While many regional airports have experienced stability — and in many cases, growth — over the past decade, XNA’s numbers have been off the charts. For its first several years in operation, the airport posted double-digit growth numbers. When the terrorist attacks of Sept. 11, 2001, turned the airline industry upside down, XNA continued to grow. In fact, there are still regional airlines and airports that haven’t made it back to their pre-9 / 11 numbers. The very next year, XNA showed 2 percent growth. Two years later, the airport grew by more than 7 percent.
With the massive percentage of business travel that goes in and out of northwest Arkansas, XNA has been viewed by many experts as an airport living in a bubble. Whatever the rollercoaster economy throws at XNA has simply bounced off.
But the economy has thrown a combination that may have finally pierced the XNA bubble.

“ Every airport in the country is holding its breath for the fourth quarter, ” XNA director Kelly Johnson said. “ That includes us. This could be the first year (XNA ) sees a decrease (in growth ). ”
With oil prices surging to record highs, it’s no secret those filling their tanks at local gas stations aren’t the only ones hurting. American Airlines, the parent company of XNA’s largest carrier, American Eagle, is on pace to spend $ 3. 5 billion more on jet fuel in 2008 than it did in 2007. That’s a jump of more than 50 percent, according to spokeswoman Andrea Huguely. And that’s just one airline.

Several smaller airlines have already folded under the pressure of escalating fuel costs and continuing economic turbulence. There’s been plenty of talk of larger airlines merging to save themselves. Over the past two months alone, more than 30, 000 airline-industry jobs have been cut across the United States. And it seems as though every day, carriers are announcing cutbacks in its flight schedules and offerings to airports large and small.

“ I’ve been in this business for several decades, and I thought I’d seen everything, ” Cohen said. “ I remember the first oil crisis in the 1970 s. There were mini recessions and crises in the 1980 s, 1990 s and early 2000 s. There was 9 / 11, the deregulation of the airline industry and anything else you can think to pile on. But this — what’s going on today — is by far and away the worst I’ve ever felt it. ”

So XNA will continue to feel the effects, just as every other airport will.
“ No airport. No community. No one is going to be spared from the effects of the price of oil, ” Cohen said. “ Not this time.

“ There’s no business model right now that can support a $ 140 barrel of oil. Carriers have been cutting like crazy already, and they’re talking about cutting up to 15 percent of their schedules. And if you think it’s already bad, come November and into next year, you just aren’t going to be able to get to a lot of places you have been in the past — certainly not with the convenience we’re all used to. That goes for big and small airports. ”
XNA’s double-digit growth numbers tapered off a few years ago but leveled out to a comfortable level. Last year, the airport saw just 1. 5 percent growth and has seen that figure slip to less than 1 percent growth so far in 2008. With little to no relief in sight, Johnson said XNA is already adjusting its budget to help offset what could be the facility’s first drop in annual performance.

“ We’re going to be OK, ” Johnson said. “ We really are. But there’s no getting around it — this is a very scary time for anyone in the airline industry. There are airports that would kill to be where we are right now, but we’ve never experienced anything like this before. ”
Johnson said the construction of an upper-level concourse at XNA, which was expected to be bid out in the coming months, has been put on hold. Since the beginning of 2008, XNA has lost four nonstop destinations, including Salt Lake City, Utah; Raleigh / Durham, N. C.; Miami, Fla.; and Washington, D. C. By November, American Eagle plans to cut one of two daily nonstop flights from XNA to New York’s Laguardia Airport. Johnson and Cohen both believe additional cuts will be announced by airlines by the start of 2009.

Other regional airports — such as Toledo, Ohio, and Fort Wayne, Ind., have already lost 30 to 50 percent of their flights. It’s not just XNA and other regional facilities. Huguely said American Airlines has made cuts in its hub, Dallas / Fort Worth. On Thursday, Johnson was thumbing through a report showing that William B. Hartsfield International Airport in Atlanta — the busiest airport in the country in recent years — has had 4 percent of its flights cut.

“ People don’t think a lot about the fact these airlines are, in many cases, selling their products six to eight months in advance, ” Johnson said. “ During that time you have your gas go up 50 to 70 percent. How do you deal with that ? The answer is, you can’t. Something’s got to give, and that’s what you’re seeing today. ”

Johnson said she and XNA executive director Scott Van-Laningham have traveled to Washington, D. C., and other destinations over the past several months to take part in discussions regarding this most recent crisis. XNA has representation on the recently formed Energy Air Service Task Force. But even veterans in the airline industry have yet to come up with a clear answer or solution.

“ We may be looking at a budget for 2009 that’s smaller than what we’re working with now, ” Johnson said. “ A few years ago, you would have thought my saying that was some kind of a joke. ”
 

drhunterr

Well-Known Member
my hometown airport, CHA, has lost, or is losing, flights to 3 cities - Houston, Ft. Lauderdale, and Columbus (skybus(t))

significant when the airport only has service to maybe 12 cities...before the cutbacks. still on schedule to gain service to dtw through NW...see if it sticks with the merger/oil prices.
 

germb747

Well-Known Member
I can't speak for the macroeconomy, but these days flying for personal pleasure has now exceeded my budget. Therefore, you won't find me spending money at the local airport quite like I used to.
 

WindyCityPilot

Well-Known Member
The flight school I got my PPL at just closed up last month and all the planes are sitting on the ramp with no props after the bank repo'd them. Not good.
 

Maurus

The Great Gazoo
Well AKR has grown. It has had three new companies move in. So one new flight school, one new charter company, and one new FBO. Yup the economy is killing AKR.
 

jtsastre

Well-Known Member
I flight instruct out of San Luis Obispo, California (KSBP). We are loosing American Eagle (LAX), Mesa (just LAS, not PHX), and Skywest (SLC, they still will operate to LAX and SFO). They were just about to start construction on a new terminal, now people aren't sure it's worth it. It's crazy because we've had AE forever (when there was Wings West) and they had a MX base here that will cause about 70 local employees to loose their job. Very sad.

Jtsastre
 

DeltaAVL

New Member
At AVL we're down to 7 destinations again - we lost MCO on DL.

The good news is that CO's beefing up their AVL flying - we're up to 3x daily to EWR and 4x daily to IAH.

WNC Aviation (the school I'm training for my PPL with) is still doing well. We just hired another flight instructor and we've got a solid fleet, so I don't think the GA side of aviation is going anywhere. At AVL, at least.
 

TXaviator

Well-Known Member
hell, we just built a 4th runway just to accommodate all the asian students training here at GFK!
 
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