You Wanna Fly Where, Take 2!

 

Our post “You Wanna Fly Where?!” generated good questions.  The best way to start answering them is to begin with the paragraph that ended the last post:

“When an airline considers adding service from a small market, such as Springfield, to a big hub, it’s not asking how many people want to fly from Springfield to that hub airport. It’s asking how many people it can connect beyond the hub, and how much revenue will those connecting customers generate?”

Our air service consultant, Michael Boyd, puts it a bit differently:

“There are no markets, other than vacation-package markets, where Springfield has sufficient passenger demand to support non-stop service, without the support of the feed traffic that a connecting hub generates.”

“Vacation-package markets” are those destinations served at our airport by Allegiant. Allegiant considers itself a travel company. Generally speaking, it flies from small markets, such as Springfield, to vacation destinations. Besides selling a plane ride, it also sells resort packages, rental car deals, etc.

Allegiant currently flies from Springfield several times a week to Phoenix, Las Vegas, Orlando, and Tampa/St. Pete. It flies seasonally from Springfield to Los Angeles and Punta Gorda/Ft. Myers. We talk to Allegiant on a regular basis about new destinations. Myrtle Beach and New Orleans are top of mind.

When Mike Boyd talks about “feed traffic that a connecting hub generates” he’s getting back to what we wrote earlier: “... how much revenue will those connecting customers generate?”

In the current airline business environment there’s only one hub city, that we don’t have service to, where connecting customers (aka: “feed traffic”) would generate a significant amount of airline revenue: Charlotte.

Charlotte service would be a good thing for Springfield customers. Flying to the Northeast from Springfield means taking connecting flights through Atlanta or Chicago O’Hare — two of the most congested airports in the country. Flights from Springfield to those two airports are frequently sold out. The addition of Charlotte flights would provide needed relief — it's the 8th largest airport in the country with dozens of connecting flights to Eastern cities, plus international non-stop flights to Canada, Western Europe, and South America.

We’ve been pursuing Charlotte service since 2010. The conversation began with US Airways. The airline’s route planners agreed with our financial analysis. They basically said ‘yes, the route would make money, but we can’t commit right now because of a plane shortage and the general state of the economy.’

If that answer sounds evasive, it wasn’t. When the recession began all the airlines began grounding planes to save money — that trend continues to this day. Bottom line: they didn’t have any spare planes to devote to a Springfield-Charlotte route. And while they didn’t say it, the planes they had in the air could make more money flying elsewhere.

Meanwhile, US Airways and America Airlines merged. As a result, we essentially had to restart the Charlotte conversation from scratch with the new American Airlines. That conversation continues to this day.

Several of you asked about the possibility of service to specific hub airports. Here’s an overview …

What about service to Salt Lake City on Delta?

Delta is not growing its Salt Lake City hub. Departures are down 19% between 2009 and 2014 and seats are down 4%. Additionally, the distance between Springfield and Salt Lake is 1,028 miles, which means it’s too for a 50-seat jet even if Delta weren’t retiring the majority of the 50-seaters (more on retirements later). The plane that’s the next step up has 66-70 seats and that would make it even more difficult to make the passenger revenue work.

What about service to Phoenix on American?

Maybe in the future but not now — American can make more money connecting Springfield customers to points west by using the Dallas hub. Additionally, Phoenix's hub status is uncertain in the aftermath of the US Air/American merger.

What about service to Philadelphia?

From the airline perspective it’s more economical to connect Springfield passengers through Chicago O’Hare, or Atlanta. As with Phoenix, Philadelphia's hub status is uncertain in the aftermath of the US Air/American merger.

What about service to Houston on United?

It’s been talked about but it would mean that United would have to compete with American’s Dallas service for south bound traffic from Springfield.

What about service to New York City’s Kennedy Airport?

Not going to happen. New York service could be in our distant future, but it would likely be to Newark Airport, not Kennedy.

What about service to Miami and Los Angeles?

The response from the airlines: you can already get to those places by connecting though Denver, Dallas, or Atlanta. Bottom line: those routes would be money losers from Springfield.

Patrick wanted to know if bigger planes are in Springfield’s future (meaning bigger than 50-seat regional jets). They definitely are. The airlines are retiring those jets as fast as they can. We expect to see bigger planes from all three of our legacy airlines: American, Delta, and United.  You can read more about it in this blog post from last August.

 

0 Comment(s)