Flight Blog

Nov 19 2007 Gale Warning BY sgf-adminTAGS Airlines

 

gale.gif On the coast they fly flags to indicate the weather forecast. Today I'm borrowing the one used for gale warnings...

 

I need to bring you up to speed on the current mood of the airline industry: gloomy.

 

The sudden and dramatic rise in energy prices, combined with a generally poor economic outlook, is forcing some to predict that airlines will begin scrutinizing existing markets for profitability. Revenue quality, not volume, will rule the day. Smaller markets will experience service cuts. In fact, just last week Allegiant Air cut six of its Las Vegas routes. The affected cities: Lansing, Springfield, Illinois, Champaign, Marian, Gulfport and Huntsville. The official reason for the cuts: high fuel prices.

 

What do I mean when I say "revenue quality," not "volume" will rule the day? Here's a simple example: suppose an airline flies to two markets. In one market a 50 seat plane is always 80% full and the fare is $50, In the other market a 50 seat plane is always 50% full and the fare is $150. Do the math. If you were the airline, which flight would you drop?

 

The challenge for airports in the coming year: maintaining the service they have. Airlines will expand only in markets where new service is a sure thing. In reality, that's the environment we've been operating in since the 2nd quarter of 2006. That's when the airlines began cutting back on the supply of seats and holding the line on the prices.

 

Where do we stand? At the end of October our total passenger count was up 2% for the year. We did this despite a zero percent growth in the number of flights. That's good news. It's tells us that the Springfield-Branson air market is strong. The next two or three months will tell the real story, though. That's when we'll know if today's bad economic news is having an impact.


Oct 30 2007 A Piece of History BY sgf-adminTAGS History

 

This wonderful image appeared in the Springfield News & Leader on November 15, 1953. The plane is the venerable DC-3. The colonial style building is the first terminal.

 

The story accompanying the photo is a detailed account of the airport’s first eight years of existence.oldterm_dc3.jpg Here’s how the story described the airport’s financial situation:

 

“…our airport is a pocket sized port compared with the mammoth fields like Chicago’s Midway, or Boston’s Logan or New York’s Idlewild. Yet if our airport must be termed small, it can also be called efficient and distinctive. It’s distinctive because it is in the black, without the backbone of direct tax support. It’s in the black because it is efficient.”

 

In the years since 1953, many things have changed. The first terminal is gone and DC-3s are seen mainly in museums and air shows. One thing hasn't changed—our airport still operates efficiently and in the black, “without the backbone of direct tax support.”

 

By the way, the reporter who wrote the story still works for the paper: Hank Billings.


Oct 23 2007 Questions About Southwest BY sgf-adminTAGS Southwest

 

Curtis leaves comments from a posting in August about Southwest Airlines:

 

"It is not true that Southwest won't fly to an MSA of less than 1,000,000 people. It currently flies to 17 of them, not counting any cities in Hawaii. Five of these (Midland/Odessa, Amarillo, Lubbock, Harlingen/South Padre, and Reno) are smaller than Springfield MSA (according to U.S. Census 2006 estimates). I also don't understand why they would only fly to one destination from SGF. The five smaller cities all have direct flights to at least three destinations each."

 

You're right Curtis, but there's a little more to it...

 

When Southwest began service in 1971, it was a Texas based airline serving only Texas cities (this was long before the company adopted its "million people in the MSA guideline"). The airline continues to service those small, legacy cities because it has a near monopoly on the service. Shawn Schroeder, the assistant director of our airport, used to work at the airport in Harlingen. The Harlingen MSA has about 378,000 people and Southwest service. He tells me that it's very difficult to entice other airlines to provide service there because they don't want to compete with Southwest. Southwest has no reason to leave Harlingen (or the other small Texas markets) because it has a lock on the market and they've always been there—the airline and Harlingen came to the dance together!

 

As for the Reno/Lake Tahoe market—its MSA is about the size of ours, but there's at least one very important difference: the tourism and gaming industry. The Reno airport has eleven airlines and moves approximately five million passengers a year. We have five airlines and less than a million total passengers a year. Given these facts, it's easy to understand why Southwest would serve the market. To compare our market to Reno, is to compare apples to oranges.

 

So, the bottom line is still true: today, in 2007, when people like me call Southwest and inquire about obtaining service, the airline says it generally doesn't consider service to an MSA of less than a million people.