Raleigh-Durham, San Jose and Portland airports: Colourful pasts and hope for the future
Pittsburgh, Cincinnati and St Louis airports were developed and then partly abandoned. In this review, we look at three smaller cities that had hopes raised and then dashed; but to quite different outcomes, and each with some hope for the future. The three are Raleigh-Durham, North Carolina (RDU), San Jose, California (SJC) and Portland, Oregon (PDX).
(1) Raleigh-Durham: Ups and downs, but positive outlook
Located in eastern North Carolina, Raleigh is part of the "Research Triangle" that also includes Durham and Chapel Hill. It is an area with strong educational institutions and, like Silicon Valley in California, has a reputation for research and innovation. Its location and business importance have drawn a number of airlines to focus on the city's airport (RDU).
American identified the city's positive attributes and opened a hub in 1987, eventually replete with service to London, Paris and Bermuda. That lasted until 1996 when the challenge of USAir at Charlotte and Delta at Atlanta made the operation unsustainable. The major vestige of that era however lives on in the daily AA nonstop to Heathrow.
A succession of new entrant - and withdrawals
American's decision was also hastened by the 1995 arrival of the second incarnation of Midway Airlines (JI)-the first having been based in Chicago. Choosing RDU as its operational hub, it provided service to many cities along the eastern seaboard and temporarily dominated the airport. However, by 2003, that carrier had become an historical footnote.
Throughout the period, airlines came and went, including ValuJet, MetroJet and Independence Air. America West began flights to both Las Vegas and Phoenix but abandoned those routes when taken over by US Airways. Southwest arrived in 1999 and filled many of the gaps, and today provides the only nonstop service to the far west.
Raleigh-Durham airline services: 2000 and 2010
RDU to |
2000 |
2010 |
---|---|---|
Ashville |
||
JI/DL/FL |
DL/FL |
|
WN/US |
WN |
|
JI/US/DL |
AA/DL/B6 |
|
Charleston SC |
JI/US |
|
AA/UA/WN |
AA/UA/WN |
|
DL |
DL |
|
WN/CO |
CO |
|
Columbia SC |
JI |
|
JI |
||
AA |
AA |
|
WN |
||
NW |
DL |
|
Ft. Lauderdale |
JI |
WN/B6 |
Greensport |
JI/US |
|
Hartford |
JI |
AA |
CO |
CO |
|
JI |
YX |
|
Jacksonville |
JI |
|
WN |
||
London |
AA-LGW |
AA-LHR |
JI |
||
JI/NW |
DL |
|
AA |
AA |
|
YX |
||
NW |
DL |
|
JI |
||
Nashville |
AA/WN |
WN |
JI |
||
Newburgh |
JI/US |
|
New Orleans |
JI |
|
New York |
JI/US/AA/CO |
US/AA/DL/CO/B6 |
JI/US |
||
Orlando |
JI/DL/US/WN |
WN |
CP |
||
JI/US |
US/WN |
|
WN |
||
Richmond |
DL |
|
JI |
||
St. Louis |
TW |
AA |
JI/US/WN |
WN |
|
CP/AC |
AC |
|
Washington |
JI/UA/US |
US/AA/UA |
West Palm |
JI |
|
Wilmington |
JI |
Traffic statistics have bounced about through all this airline coming and going, with the last 3 years showing the nationwide trend of fewer customers.
Raleigh-Durham Airport passenger movements (mill): 1985-2009
The capacity shares display a slight edge for Southwest but when looking at the primary destinations, American's percentage reflects its presence in the important New York, Chicago, Boston and Dallas markets, three of which are AA connecting points.
The presence of Philadelphia, Baltimore and Nashville, all Southwest "focus" cities, would indicate that they, too, carry a great many connecting passengers to and from RDU. As was the case in St. Louis, the absence of nonstop service to much of the US has created a strong spoke for those carriers able to offer a comprehensive connecting pattern.
Raleigh-Durham Airport domestic capacity shares (%) by airline
Airline |
Capacity share |
---|---|
23.6% |
|
21.3% |
|
20.8% |
|
16.4% |
|
6.4% |
|
5.3% |
|
3.2% |
|
Airtran Airways |
3.0% |
Top 10 domestic destinations from Raleigh Durham Airport
Rank |
City |
---|---|
1 |
New York |
2 |
|
3 |
|
4 |
|
5 |
|
6 |
Washington |
7 |
|
8 |
|
9 |
|
10 |
Nashville |
While certainly not stung in the same manner as the big three, Pittsbugh, Cincinnati and St Louis, Raleigh has been a revolving door for airlines as they first love and then leave it. Despite the dramatic loss of nonstop destinations, down from 44 to 29, the past decade has seen only a modest drop in passengers as compared to, say, Pittsburgh.
Most noteworthy is the fact that the city has, in a time of increasing consolidation, been able to sustain its LHR service-a prize that many cities covet.
Antitrust immunity for BA/AA will benefit RDU and its citizens. This may well offer an opportunity for the airport to press its claims with the joint venture, to strengthen its position further.
(2) San Jose: An airport with spare capacity and potential upside
San Jose has been examined before in other contexts, but it, too, had a brief flirtation with hubbiness back in the 1990s. The buildup began in the late 1980s, following American's acquisition of Air California, one of the many pre-deregulation startups that challenged the entrenched intrastate carrier, Pacific Southwest-PSA. AirCal, as it was known, like PSA, found the going tough after the US market was deregulated and their safe niche of oversight by Californian, rather than Federal regulators, was eliminated. Eventually all of these intrastate operators disappeared.
Southwest was not yet a strong player in the coastal market and American concluded that, unable to challenge United at SFO, it would establish itself as the dominant carrier in the booming Silicon Valley. Part of this plan involved the integration of yet another startup, Reno Air, as its surrogate operator for many of the shorthaul services. Reno became a participant in AAdvantage and American embarked on an expansion that included nonstops to major East Coast cities. American eventually took over Reno Air.
International service for Silicon Valley - cut short by 9/11
Internationally, the airline began daily service to Narita, hoping to lure the Silicon Valley entrepreneurs away from SFO service. This was an especially bold move given the fact that the introduction of the airline's MD-11s was delayed by contractual problems with pilots, and the flight was inaugurated with DC-10s-for which the runway length and stage length were a challenge. Until the arrival of the MD-11, many flights operated via Oakland whose longer runway could accommodate the heavy DC-10s, making for a "first leg" of about 10 minutes.
The long-term plans included service to Paris and Taipei as well, but these routes never came to fruition as in the late 1990s the tech bubble burst and Silicon Valley firms fell on difficult times. The drawdown began and with a much-reduced presence, the Tokyo flight finally succumbed in 2006.
New infrastructure, unfortunate timing
During the growth period the airport management greatly expanded the field's facilities by adding a new parallel runway-one of the few built in the US in past decades, as well as building new terminals to deal with growing passenger numbers. In a very unfortunate confluence of timings, the new runway was opened in August, 2001-just in time for the coming traffic implosion.
Looking back on the past decade, it is not so much the numeric loss of nonstop destinations for San Jose that stands out (down by 4 to 25) but the destinations and carriers involved. Washington and Boston are both gone and both legacy carriers have disappeared from the New York route.
The airport's service is dominated by Southwest, as is Oakland's.
San Jose airline services: 2000 and 2010
SJC to |
2000 |
2010 |
---|---|---|
WN |
||
DL |
DL |
|
AA |
AS |
|
AS |
AS |
|
AA |
||
WN |
WN |
|
Cabo |
AS |
|
AA/UA |
AA/WN |
|
AA |
AA |
|
UA |
UA/F9/WN |
|
MX |
||
HA |
||
CO |
CO |
|
Kahului |
AS |
|
AS |
||
AA/WN/HP |
WN |
|
Los Angeles |
AA/WN/UA |
UA/AA/WN |
NW |
DL |
|
New York |
AA/CO |
B6 |
Ontario |
WN |
WN |
Orange Co. |
WN/AA |
WN |
WN/HP |
US/WN |
|
AS/AA/WN |
AS/WN |
|
Puerta Vallerta |
AS |
|
AA/WN |
WN |
|
AS |
||
St. Louis |
TW |
|
DL |
DL/WN |
|
WN/AA |
||
UA |
UA |
|
Seattle |
AS/AA/WN |
AS/WN |
Tokyo |
AA |
|
UA |
||
Washington |
UA |
San Jose Airport domestic capacity shares (%) by airline
Airline |
Capacity share |
---|---|
61.2% |
|
9.3% |
|
8.7% |
|
5.7% |
|
4.5% |
|
4.5% |
|
2.5% |
|
Frontier Airlines Inc. |
1.3% |
1.2% |
|
1.0% |
Unlike St Louis and Raleigh, the top ten destinations are consistent with what one would expect from a second-tier airport-primarily regional flights, with only Denver and Dallas likely carrying a significant percentage of onwards passengers. Chicago, which has featured prominently on many lists, is absent.
Top 10 domestic destinations from San Jose Airport
Rank |
City |
---|---|
1 |
Los Angeles |
2 |
|
3 |
|
4 |
|
5 |
|
6 |
|
7 |
Santa Ana |
8 |
Seattle |
9 |
|
10 |
Traffic slides, but San Francisco's congestion offers upside
The list of San Jose's primary destinations is similar to the display found in 1990, with intra-California and coastal cities representing the largest markets.
San Jose's moment of challenge to SFO has come and gone, and the near-term future of the airport is currently to once again be a regional addendum to SFO. Consistent international growth at SFO has helped that airport reclaim its gateway status for almost all overseas travelers, with both OAK and SJC providing only limited international service, to points in Mexico.
The magnitude of the change is reflected in the steep traffic drops in 2008 and 2009 as the legacy carriers have steadily reduced their presence and increasing numbers of flights were converted to regional jets.
For the present, the picture looks grim, with limited upside. But there is cause for hope.
Just as SFO has usurped traffic that was moving to SJC, it is that very shift, and the possibility of gridlock at SFO with its too-close runways, that may eventually bring traffic back. San Francisco is operating with fixed capacity constraints that have no immediate solution, meaning that its resurrected popularity may also bring back the congestion that has been a feature of its past. The solution, as recommended by regional government, is to again revive both San Jose and Oakland as relievers for SFO.
San Jose Airport passenger movements (mill): 2002-2009
As air transport and the regional population continues to grow, the airport has potential for a resurgence in its future. If that day comes, the facilities and infrastructure will be in place. That new runway could prove after all to have been a good investment for the long term.
(3) Portland: Now consolidating a good mix of international and domestic
For decades, Portland, Oregon, the Rose City, was the smallest and least well known of the five big west coast urban centers. Starting in San Diego and passing through LA and San Francisco enroute to Seattle one encounters Portland. But as Californians fled steep housing prices and urban sprawl, many moved first to Seattle and then as that city also grew, discovered Portland.
From 1980 to 1990 the area's population grew by almost 20% and the next decade saw a similar increase.
In the 1990s, Delta was shopping for another hub in the west to supplement its Salt Lake operation as the springboard for its expanded operations to Asia. San Francisco was dominated by United, and Seattle already had substantial service as well. Furthermore, as shown in the table below, much of the Portland (PDX) capacity was supplied by Alaska and Southwest, neither of which would have international aspirations.
Paving the way for international operations
As home to an increasing number of Asian-oriented businesses, Portland was eager to move to international status-promising to create a new Federal Inspection area within the facility to handle the traffic. So they built it, and Delta came with its MD-11s.
Delta also established a network to and from the city that would feed the international operations. Though already operating to Tokyo from LAX, the airline had high hopes for its PDX operations.
Portland Airport passenger and airline shares (%): 1996 to 2009
Year |
Pax (mill) |
Carrier Shares (%) |
|||
---|---|---|---|---|---|
AS* |
DL |
WN |
UA |
||
1996 |
12.6 |
34.9 |
15.6 |
12.7 |
16.6 |
2000 |
13.8 |
35.2 |
13.3 |
14.9 |
15.6 |
2005 |
13.9 |
35.9 |
6.4 |
17.4 |
14.0 |
2006 |
14.0 |
34.1 |
5.7 |
18.3 |
12.9 |
2007 |
14.7 |
38.4 |
5.6 |
17.0 |
11.9 |
2008 |
14.3 |
34.8 |
7.1 |
19.2 |
10.9 |
2009 |
12.9 |
35.9 |
5.4 |
19.9 |
8.9 |
By 1996, Delta was operating a sizable share of the airport's capacity and its only intercontinental flights. But that was the last year in which the operation showed promise. In 1997, the Asian economic crisis cut travel to the region and the international operations wound down. Like so many other locations, 9/11 turned a trend into a rout.
Portland airline services: 2000 and 2010
PDX to |
2000 |
2010 |
---|---|---|
WN |
||
DL |
||
TW/DL |
AS |
|
DL |
DL |
|
AS/WN |
AS/WN |
|
AS |
||
AS |
AS |
|
AC |
||
UA/AA |
UA/AS/WN |
|
DL |
||
Corvalis |
AS |
|
DL/AA |
AA |
|
UA/F9 |
UA/WM/YX |
|
NW |
DL |
|
UA/AS |
UA/AS |
|
Eureka |
UA/AS |
|
HA |
HA/DL |
|
CO |
CO |
|
Kahului |
HA/AS |
|
Klamath Falls |
AS |
UA |
AS/WN/DL |
AS/WN |
|
AS |
||
Los Angeles |
UA/AS |
UA/AS/B6 |
Medford |
AS |
UA/AS |
NW |
DL |
|
Nagano |
DL |
|
New York |
CO/DL |
CO/DL/B6 |
AS |
||
AS/WN |
AS/WN |
|
Ontario |
AS |
AS |
Orange Co. |
AS |
AS |
Orlando |
AS |
|
AS |
AS |
|
Pasco |
AS/UA |
|
Pendleton |
AS |
|
HP/AS/WN |
US/AS/WN |
|
Redding |
AS |
|
Redmond |
UA/AS |
|
AS/UA |
WN |
|
AS/WN |
WN |
|
St. Louis |
TW |
|
DL/WN |
DL/WN |
|
AS |
AS |
|
UA/AS/WN |
UA/AS/WN |
|
San Jose |
AA/AS/WN |
AS/WN |
Santa Rosa |
AS |
|
AS/WN |
AS/WN |
|
Tokyo |
DL |
DL |
AS/AC |
AS/AC |
|
Washington |
UA |
UA |
Facilities and capacity offer room for growth. Just a matter of time?
This left the airport with a modern international facility, but few passengers. The airport and the city went in search of another tenant and finally, in 2003, Lufthansa began service from Frankfurt. For six years that link existed until it was terminated in 2009.
However, in 2008 Northwest had inaugurated service to KLM's Amsterdam hub, making Lufthansa's departure less problematic. And Asia was again accessible via a Northwest service to Tokyo. With the DL/NW merger, the Delta brand returned, providing both European and Asian access. From Amsterdam, connections to Europe, Africa and the Middle East were possible and Northwest's formidable rights from Tokyo far exceeded the Delta reach of the 1990s.
Portland domestic capacity shares (%) by airline
Airline |
Capacity share |
---|---|
33.1% |
|
19.2% |
|
14.3% |
|
11.5% |
|
6.9% |
|
3.8% |
|
3.2% |
|
2.3% |
|
2.1% |
|
Frontier Airlines Inc. |
2.1% |
Airtran Airways |
1.1% |
0.5% |
|
0.1% |
The current list of players represents a healthy combination of legacy and new generation carriers, providing a full menu of domestic service. In a unique arrangement, Alaska codeshares with both American and Delta on many of its services. Alaska's flight to Orlando, for instance, carries both a Delta and American flight number.
Top 10 domestic destinations from Portland Airport
Rank |
City |
---|---|
1 |
Seattle |
2 |
New York |
3 |
|
4 |
|
5 |
|
6 |
|
7 |
|
8 |
|
9 |
|
10 |
San Jose |
Portland's list of top 10 destinations presents an array of cities that have both O & D, as well as connection opportunities. In Jan-2010, domestic passengers were up slightly, while internationally, the number is down by almost a quarter, mostly due to the loss of a daily Lufthansa frequency.
Of the airports examined here, PDX, despite a tortuous journey, has come to a position that utilises its facilities and provides the community with a comprehensive air service network. For a city known for its flowers, its future looks well, rosy.
Some common themes and cause for optimism
The fragility of smaller airports with aspirations is well documented. Attracting international service is an admirable goal, but expansion usually entails infrastructure expense, so that the subsequent loss of an international operation can be very painful.
But, as infrastructure shortages become progressively more acute - as traffic growth returns - airports of the size of Raleigh-Durham, San Jose and Portland potentially offer attractive alternatives.
This is particularly true for West Coast airports with access to the expanding Asian markets. In 2009, intra-Asian travel numbers exceeded those of North America for the first time and the prospect of near-double digit annual growth in Asia over the nxt 20 years offers possibilities (and challenges) for American airport infrastructure.
Both San Jose and Portland are well positioned in this regard.
Meanwhile, Raleigh-Durham, while unlikely to share in that expansion, may be the beneficiary of a strengthened American Airlines-British Airways relationship, once they receive anti-trust immunity for their joint venture.
Any airport with annual throughput of around 10 million passengers is going to be susceptible to short-notice market responses by international operators. But the economic value of these services to their local community is such that the risks are worth confronting. In a turbulent marketplace, risks are unavoidable; while opportunities abound, they must however be actively sought out.