Airport Passenger Numbers Decline in May

June 19, 2008

Last month the number of people using commercial airlines fell 16 percent at the Springfield-Branson National Airport. That’s the largest monthly decrease since the number plunged 22 percent in November 2001. And it follows a 13 percent drop in April.

“There’s no doubt about it—high ticket prices and a soft economy are the main culprits,” says Gary Cyr, airport director of aviation. “Factor in flights cancelled by weather and there you have it: thirteen-thousand fewer total passengers this May than last.”

In May 2007 total passengers were 82,979. In May 2008 total passengers were 69,368. That’s a difference of 13,611.

“The price of jet fuel has risen 80 percent in the past year. That’s driving ticket prices up,” says Cyr. During the first three months of the year fares were up ten to thirteen percent nation wide. “Between high fares and the soft economy, fewer people are flying from Springfield.”

Springfield’s declining numbers are symptomatic of what’s happening across the country. As airlines cut back on flights, airports are losing passengers and routes.

How bad will it get? “A lot depends on the cost of fuel,” says Cyr. But even if fuel prices stop rising and stay where they are, the airlines will have to raise fares and cut flights—it’s a matter of airline survival. There’s industry speculation that the airlines may have to raise fares another ten to twenty percent just to cover the cost of fuel.” Higher fares will likely mean fewer passengers and that could eventually mean Springfield could lose some destinations.

There is good news to report: while American, Delta, Northwest and United cut flights and flew fewer passengers, low-cost airline Allegiant Air saw growth. The airline’s Springfield passenger numbers are up 33 percent in May and up 19 percent for the year. When Allegiant began flying to Springfield three years ago, it ranked last in passenger numbers. The airline now carries more Springfield passengers than Delta and Northwest. Only American and United fly more.

“That’s our bright spot,” says Cyr. “Allegiant’s success as a low-fare airline helps offset our losses.”

Discussion: Airport Trends

INTRODUCTION

The data below starts in May 2004—during the run-up to the airport’s 2005 boom year (when measured in passenger numbers). 2005 has, for most purposes, become the base year on which succeeding years are measured.

Warning: be careful drawing conclusions from these numbers. As will be shown in this analysis, airline/airport statistics are complicated and often counterintuitive.

ANALYSIS

While much has been made lately of airline “capacity cuts,” (meaning fewer flights) they are not something new. The airlines have been cutting capacity since the first quarter of 2006. In 2005 fares were at historic lows (when adjusted for inflation). Airlines started cutting the supply of seats so that fares would go up. This is the situation we’ve been in since early 2006. What has changed in the past few months is the huge jump in fuel prices and the resulting high fares.

Are May 2008 passenger numbers down due to capacity cuts—or are they down due to higher fares? We believe it’s the latter. Data analysis consistently shows that the number of flights doesn’t have much to do with passenger numbers. Look at Table 1. Compare May 2004 with May 2005.

May 2005 had 119 fewer flights than May 2004, yet passenger numbers were up 17,206. Similar comparisons can be found throughout Table 2.

Bottom line: our May 2008 capacity could easily have carried more passengers, but high fares forced people away.

Table 1: Number of Flights and Total Passengers in May: 2004—2008

Table 3: Number of Flights and Total Passengers for 2004 — May 2008