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30 US airports risk losing service

20-Jan-2010

After a host of US airports lost service with the dramatic capacity cuts during 2008 and 2009, another 30 airports that rely solely on regional airlines to connect them to the national air transportation system, are at risk of losing all air service, according to a new study.

Between 2006 and 2010, ten airports lost regional jet service entirely and those that did not completely lose service now have “only meager passenger choice,” said Innovations Analysis Group/Innovata analysis. The study showed travelers are migrating to nearby larger airports making it unlikely for any restoration of air service to the smaller community. Airports that rely only on general aviation, said Abbey, generate only a fraction of the economic impact of airports that can sustain scheduled service.

The math is simple, regional jets are no longer cost effective at higher fuel rates for service to small communities and few US regionals operate the more cost efficient turboprop aircraft.

“Small jet economics pivoted 180 degrees in less than one year,” said Author Doug Abbey. “Fuel prices peaked in 3Q2008 (creating a cost problem) and business traffic - the mainstay of regional service – started disappearing (resulting in a revenue problem) in 2Q2009. Codesharing regional carriers will be increasingly burdened with new post-Bankruptcy major airline priorities plus the age old anti-growth affects of Scope Clauses. Republic and Mesa Airlines offer two stark extremes of alternative survival strategies; diversification or destruction. The contemporary regional business model is severely broken.”         

Compounding this are the capacity purchase agreements cut between regionals and their major-carrier counterparts in the last decade. Abbey points out that airport managers do not understand these CPAs, especially the economics of community air service from a major-carrier perspective and what that means for scheduled service retention.

“Airport managers are being told there are better and more productive ways to assure that local schedules do not deteriorate further,” said Abbey, in his report. Indeed, just as the major carriers are expected regional airlines to take on additional risk sharing, Abbey indicated they want the same from airports.

“Local airports face a very basic risk: some will simply be unable to justify replacing 50-seaters with 70-plus passenger airplanes,” he said “This process will become acute at dozens of US communities. The dynamic nature of small and medium-sized city air service will continue, most notably as average aircraft capacity grows while average flight frequency and the number of competitive service options both decline. These trends are already on-going as Delta further rationalizes a 550-strong RJ fleet in favour of larger capacity airplanes such as the CRJ-900 and Embraer 175.”

Summary of US-based RJ Schedules (Month of January) 

 

 

 

 

Percent Change

 

2002

2006

2010

2002-2006

2006-2010

RJ Markets Served

835

1,589

1,486

90.3%

-6.5%

RJ Spoke Airports

205

268

274

30.7%

2.2%

Carrier/Hubs

38

41

41

7.9%

0.0%

           

Average:

         

Flights per Market*

38.3

38.4

20.5

0.3%

-46.6%

Aircraft Size (Seats)

50.0

52.9

56.6

5.8%

7.0%

Hub Markets per Spoke

4.1

5.9

5.4

43.9%

-8.5%

Spoke Markets per Hub

22.0

38.8

40.2

76.4%

3.6%

Stage Length (miles)

418

491

483

17.5%

-1.6%

           

Note: * - Figure is weekly.

         

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