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Fort Lauderdale's future shows promise after strong international passenger growth in 2014

Fort Lauderdale International airport capped off a successful 2014 by growing total passenger numbers 4.6% including a 26% jump in international passengers. Five international airlines launched new service to Fort Lauderdale in 2014, reflecting its attractiveness as a reasonably priced airport catering to the South Florida market.

The airport sits in a unique position of being a focus city for a large US hybrid airline, JetBlue, and the headquarters and top base for the country’s largest ULCC Spirit Airlines. Fort Lauderdale also has representation from ULCCs Allegiant and Frontier and counts Southwest Airlines as its second largest airline measured by ASKs deployed.

With overall US domestic demand holding steady, Fort Lauderdale’s prospects for 2015 remain strong, underpinned by a new runway that opened in late 2014 that should both allow for less congestion and future growth. But the airport also faces some challenges with its growth, namely bottlenecks in customs processing.

New service helps Fort Lauderdale log solid international passenger growth

Fort Lauderdale processed roughly 24.6 million passengers in 2014, up 4.6% from the year prior. Its international passenger numbers jumped 26% to approximately 4.7 million. The airport’s passenger growth should remain on a steady trajectory in 2015 as airlines continue to expand from Fort Lauderdale.

Fort Lauderdale-Hollywood International Airport annual passenger numbers: 2011 to 2014

Fort Lauderdale-Hollywood International Airport annual passenger growth: 2011 to 2014

Fort Lauderdale-Hollywood International Airport annual international passengers: 2011 to 2014

Fort Lauderdale-Hollywood International Airport annual international passenger growth: 2011 to 2014

Among the foreign airlines that launched service from Fort Lauderdale in 2014 were Azul from its hub at Sao Paulo alternative airport Campinas, Copa from its Panama City Tocumen hub, Norweigan from London Gatwick, Ecuador’s Tame from Quito and Guayaquil and Volaris from Mexico City and Guadalajara. International passenger levels should continue to grow in 2015 as these routes mature.

Data from CAPA and OAG for the week commencing 23-Mar-2015 to show that roughly 26% of Fort Lauderdale’s ASMs are deployed into international markets.

Fort Lauderdale-Hollywood International Airport international vs domestic capacity (% of ASMs) 23-Mar-2015 to 29-Mar-2015

JetBlue, which is Fort Lauderdale’s largest airline measured by ASMs (based on schedules for the week commencing 23-Mar-2015), also expanded its international offerings in 2014 with the addition of Montego Bay, Port of Spain, Punta Cana and Cartagena. The airport is a strong O&D market, fuelled by the large pool of VFR passengers from South Florida.

But JetBlue also leverages Fort Lauderdale as a connection point for north-south US traffic flows. Its addition of service to Pittsburgh during 2014 reflects its aim of flowing at least some passengers over Fort Lauderdale to its Caribbean and Latin American destinations.

International passenger growth taxes some of Fort Lauderdale’s resources

The jump in Fort Lauderdale’s international passengers does create some challenges for the airport – notably in resources for processing passengers through US customs. News outlet the Sun Sentinel in late 2014 cited US Customs and Border Protection data that showed the number of passengers waiting at least one hour to clear customs grew from 50,764 in 2012 to 127,863 in the first nine months of 2014. The maximum wait time increased from 1.7 hours in 2012 to 3.4 hours in 2014.

The publication highlighted steps the airport is taking to combat the logjams, including asking airlines to reschedule some flights and the purchase of automated passport kiosks. Terminal four at Fort Lauderdale is also being revamped with a larger Customs area, the paper stated, and Terminal one is due to gain another Customs area. Those projects are set for completion by 2017.

Continuing to expand customs processing resources is key for Fort Lauderdale in is quest to secure additional international service. The airport appears to be on Southwest’s radar as it expands internationally during the next few years. Although Southwest is obviously focusing on the debut of international service from a new terminal its Houston Hobby base in late 2015, the Sun Sentinel has reported that the airline aims to add 25 international flights form Fort Lauderdale as Terminal one (where Southwest operates) undergoes a renovation.

Fort Lauderdale enjoys a good diversification of airline business models

Fort Lauderdale is in somewhat of a unique position. Its largest airlines are hybrids JetBlue and Southwest and ULCC Spirit.

JetBlue is the largest airline serving the airport measured by total ASMs, while Southwest has the largest share of domestic ASMs.

Air Canada is the largest international carrier at Fort Lauderdale, based on ASMs for the week commencing 23-Mar-2015. The airline presently serves Fort Lauderdale from its hubs in Toronto as well as Halifax and Ottawa.

Fort Lauderdale-Hollywood International Airport system capacity share (% of ASMs) by carrier: 23-Mar-2015 to 29-Mar-2015

Fort Lauderdale-Hollywood International Airport domestic capacity share (% of ASMs) by carrier: 23-Mar-2015 to 29-Mar-2015

Fort Lauderdale-Hollywood International Airport international capacity share (% of ASMs) by carrier: 23-Mar-2015 to 29-Mar-2015

All the main US network airlines – American, US Airways, United and Delta – also operate from the airport. Those four airlines also serve nearby Miami, which is American’s major gateway to Latin America. The use of both airports by these airlines and others shows there is enough demand to serve both airports as some passengers in some cases do not wish to make the 39km drive to Miami, or pay the higher fares that legacy airlines can sometimes garner in Miami.

But ULCC Frontier is attempting to inject some ULCC prices in Miami while also serving Fort Lauderdale. Frontier’s flights from Miami include Atlanta, Orlando, Philadelphia, LaGuardia, Washington Dulles and Denver. It currently serves Cincinnati, Cleveland, Washington Dulles, St Louis and Trenton from Fort Lauderdale.

It seems like an odd bifurcation, but Frontier also operates from both Washington Dulles and Washington National. Frontier has also opted to add flights from Miami after Spirit in 2014 reportedly evaluated launching flights from Miami, so perhaps the idea of a ULCC serving Miami is not totally illogical.  

See related report: Frontier Airlines' rapid network changes continue. A return to Philadelphia, now with a ULCC mindset

Fort Lauderdale exploits its competitive advantages for future growth

Even as Miami may draw some ULCC interest, Fort Lauderdale’s competitive cost remain one of the biggest draws the airport has to offer.  A report in the Miami Herald in late 2014 stated that Fort Lauderdale’s cost per enplaned passenger for fiscal 2013 was USD4.16, which should rise to USD6.51 in 2017 as the airport completes certain upgrade projects. But the paper stated the cost should drop after that time.

By contrast, Miami’s cost per enplaned passenger for 2014-2015 is roughly USD20. Fort Lauderdale’s higher projected enplanment costs are still far lower than Miami International.

The cost benefit, along with South Florida’s built-in VFR passenger base, gives Fort Lauderdale a potentially brighter outlook than other airports attempting to define themselves in the post-consolidated US industry. JetBlue has repeatedly stated its intent to operate 100 daily flights from Fort Lauderdale by 2017, and the airport is one of the airline’s fastest growing markets. Southwest’s potential international service also gives the airport some certainty about growth that other US airports do not enjoy.

Leveraging its geographical position as a gateway to the Caribbean and Latin America and keeping passenger enplanement costs lower than other airports should allow Fort Lauderdale to keep recording steady passenger growth during the next couple of years as it works to retain its competitive advantage for the long-term.

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