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Fewer Airlines, Lots of Competition June 18, 2014

By Adam Minter Bloomberg View

http://www.bloombergview.com/articles/2014-06-18/fewer-airlines-lots-of-competition

Is airline consolidation really so bad for the flying public? On the surface it would seem that way. In 2013, for instance, 85 percent of all U.S. domestic passengers flew on one of just four airlines -– each of which expanded substantially as a result of a merger or acquisition between 2008 and 2013. Meanwhile, between 2007 and 2012, airfares rose 4 percent. Consolidation appears to have reduced competition.

Or has it? According to a Government Accountability Office report issued last week, during that same period there was “little change” in the average number of competitors on domestic routes flown by U.S. carriers. (The report concedes that its calculations don’t measure the effects of the 2013 merger between American Airlines and U.S. Airways.) That may seem counterintuitive to anyone who’s watched the number of carriers flying out of their local airport slowly dwindle. However, the GAO largely avoids judging competition by how many airlines are based at specific airports, and instead looks at how much competition exists on specific routes flown either directly, or via connection. From that perspective, there’s plenty of competition in the U.S. skies, especially if you’re flying between popular cities, not rural ones.

Passenger Figures Decline at Bob Hope Airport June 10, 2014

By Mark Kellam , Burbank Leader, Glendale, Calif.

http://www.aviationpros.com/news/11517999/passenger-figures-decline-at-bob-hope-airport

June 07--The number of passengers at Bob Hope Airport declined 1.5% in April, and parking revenues, while they did rise, didn't grow enough to meet budget projections, according to the latest statistics.

There were 325,839 passengers in April, compared to 330,772 passengers in April 2013, according to a report released by the Burbank-Glendale-Pasadena Airport Authority on Monday.

Travel up at most SoCal Airports in April June 4, 2014

By MARY ANN MILBOURN, Orange County Register

http://www.ocregister.com/articles/percent-617062-year-travel.html

If things seemed a little crowded at Los Angeles International Airport in April, it wasn’t your imagination. Passenger growth surged 8.5 percent compared to April a year ago.

John Wayne Airport, Ontario International Airport and Bob Hope Airport in Burbank also experienced year-over-year growth in April. Only Long Beach Airport, which continues to face headwinds as airlines redeploy equipment to other routes or destinations, declined.

Airport traffic rises with new carrier
Volaris’ new service to Mexico turns around decline in traffic.
June 4, 2014

By MARY ANN MILBOURN, The Press Enterprise

http://www.pe.com/articles/airport-695753-percent-april.html

Ontario International Airport, which has seen passenger traffic decline precipitously for the past seven years, showed a 1.5 percent gain in April. Mexican low-cost air carrier Volaris instituted twice-a-week service to Guadalajara on April 10.

ONT passenger traffic slightly increases in April June 2, 2014

By Liset Marquez, Inland Valley Daily Bulletin

http://www.sbsun.com/business/20140602/ont-passenger...

Ontario - Aided by the arrival of a new carrier, passenger traffic at LA/Ontario International Airport had a marginal increase in April, officials said.

ONT had a 1.5 percent increase in people coming in and out of the medium-hub facility compared to the same month in 2013, according to April figures released by Los Angeles World Airports.

Fewer Flights, More Revenue: Airlines Come Out Ahead May 7, 2014

PeterGreenberg.com

http://petergreenberg.com/2014/05/07/fewer-flights-revenue-airlines-come-ahead/

Recently, the Department of Transportation (DOT) reported on the best airlines in the US depending on the number of complaints per airline, on-time departures, and baggage handling.

This Monday, the DOT’s Research and Innovate Technology Administration (RITA) released the Bureau of Transportation Statistics for US airlines. The financial data reveals how much money airlines make each year, how many flights are taking off, and how many passengers are on them.

So how much are airlines making? As it turns out, the overall net income has varied significantly over the past 8 years; the net income of airlines has increased 153.5 percent.

This is due to several different factors. In 2005, the net income of airlines was negative $19.7 million. Since then, airlines have cut back on expenses by reducing the number of seats available by consolidating and reducing routes.

Bob Hope Airport sees fewer passengers in April
Report shows a roughly 3.9% slide from March 2013, marking second straight month of passenger declines.
May 7, 2014

By Mark Kellam, LA TIMES

http://www.burbankleader.com/news/tn-blr-me-bob-hope-airport-sees-fewer-passengers-in-april-20140507,0,7538329.story

The number of passengers traveling through Bob Hope Airport declined by almost 4% last month compared to March 2013, according to the latest statistics.

Milwaukee could look at Europe to expand air service May 5, 2014

Joe Taschler of the Journal Sentinel

http://www.jsonline.com/business/milwaukee-could-look-at-europe-to-expand-air-service-b99257616z1-258020601.html

As far as attracting new air service is concerned, it might be time for Milwaukee to launch a European tour.

With the U.S. airline industry stuck in a holding pattern — four airlines now control 80% of the U.S. market — there aren't many places that cities such as Milwaukee can look when seeking to land new air service.

"Is anybody expanding? That's kind of the question a lot of people are asking," said Robert Mann, a New York-based airline industry consultant who operates R.W. Mann & Co. Inc

"The answer that comes back (from airlines) is, 'We are going to be very disciplined,'" Mann said.

"So, the answer is probably 'No.”

Airline Mergers Bring Deep Service Cuts to Small and Midsize Airports May 1, 2014

By Justin Bachman, Businessweek

http://www.businessweek.com/articles/2014-05-01/airline-mergers-bring-deep-service-cuts-to-medium-and-small-airports

The financial benefits of airline mergers are well known at this point. Less-widely documented are the deep reductions in airline service that leave travelers at scores of smaller airports with far fewer flights.

Now there’s new data (pdf) on all the flight cuts during the wave of mergers over the past seven years, courtesy of the Government Accountability Office. In the process of building this week’s report on air service to small communities, federal researchers tallied the overall changes in airline service since 2007. Nearly three dozen midsize airports—in such places as Milwaukee, New Orleans, Pittsburgh, and San Antonio—lost nearly one-quarter of their flights in the period. A group of 76 small airports lost 20 percent of their pre-2007 flights. And 23 airports lost all their air service.

Losses at Smaller Airports Are Unlikely to Be Reversed Mar. 31, 2014

By JOE SHARKEY

http://www.nytimes.com/2014/04/01/business/efforts-by-smaller-airports-to-lure-new-service-largely-lost-causes.html?_r=0

AIR travel has a lot of new realities: On a cheap coach fare, if you want a seat that isn’t in the middle of a cramped row back by the toilets, you are probably going to have to pay extra. Your frequent flier mileage programs are losing value, especially at the lower elite levels. If you’re flying internationally, you’re probably flying an airline alliance and not a particular airline.

And most basically, if you live in a small or midsize city, your air service choices have been diminishing — and that is not going to change. If your local news outlets assure you that the city airport and municipal officials are spending money on studies to attract new air service, they are probably chasing ghosts.

Industry shake-up batters California's Ontario airport Mar. 31, 2014

By Skip Descant, The (Palm Springs, Calif.) Desert Sun

http://www.usatoday.com/story/travel/flights/2014/03/30/air-industry-changes-batter-small-calif-airport/7085601/

PALM SPRINGS, Calif. — Long lines and crowds are the hallmarks of air travel these days. But not at Ontario International Airport in California.

Its two airy terminals, with curved roofs reminiscent of the leading edge of an airplane wing, are perpetually — and somewhat puzzlingly — uncrowded.

San Bernardino Airport hopes for international travelers Mar. 26, 2014

By Brian Watt KPCC

http://www.scpr.org/blogs/economy/2014/03/26/16181/san-bernardino-airport-hopes-for-international-tra/

It’s not every day that you get to walk into a brand new, empty airport terminal, but I got a recent tour of the San Bernardino International Airport.

Last month, San Bernardino officials showed off the airport's new international arrivals terminal. It represents the last phase of a $200 million effort to convert the former Norton Air Force Base into a regional airport that commercial airlines can use. The problem so far: commercial airlines haven't shown up to use it.

Smaller Airports Are Being Left Behind Mar. 24, 2014

By JOE SHARKEY NY Times

http://www.nytimes.com/2014/03/25/business/smaller-airports-are-being-left-behind.html

My son Chris is on a business trip in India this week, and his choice of how he got there from his home in Tucson underscores a reality in air service. More often these days, business travelers will choose to drive a few hours to a bigger airport because airline service is not as convenient at their local airport.

Airline Travelers, Your Future Will Look a Lot Like … Cleveland Feb. 4, 2014

By Brad Tuttle TIMEBusiness

http://business.time.com/2014/02/04/airline-travelers-your-future-will-look-a-lot-like-cleveland/

United Airlines announced it is dropping 60% of departures in Cleveland, which was once a major hub for Continental—back before Continental merged with United.

Airline mergers are formed in order to boost efficiency and profits. For fliers, however, the many mergers created in recent years have often hurt once-important travel hubs such as St. Louis, Memphis, Detroit, Cincinnati, and Pittsburgh. And it’s not merely locals served by these gateways who are affected. Across the board, the new world of airline travel is one of fewer flights, less convenience, higher fares, and, of course, a business model increasingly clogged with fees.

Cleveland's costly regional jets contributed to United Airlines' hub pullout Feb. 4, 2014

By Janet H. Cho, The Plain Dealer The Plain Dealer

http://www.cleveland.com/business/index.ssf/2014/02/clevelands_..._airlines_hub_pullout.html

CLEVELAND, Ohio -- The high cost of operating regional flights and complying with new industry regulations helped push United Airlines to withdraw its hub from Cleveland Hopkins International Airport, aviation experts say.

Jeff Smisek, chairman, president and chief executive of United Airlines, told United's 1,800 Cleveland employees in a letter dated Feb. 1 that "Our hub in Cleveland hasn't been profitable for over a decade, and has generated tens of millions of dollars of annual losses in recent years. We simply cannot continue to bear these losses."

Passenger numbers slip at Bob Hope Airport
Statistics show a 5.2% decrease last year, but a slight increase for December.
Feb. 4, 2014

By Tim Traeger, tim.traeger@latimes.com

http://www.burbankleader.com/news/tn-blr-passenger-numbers-slip-at-bob-hope-airport-20140204,0,3305258.story?track=rss

Bob Hope Airport saw a roughly 5.2% decline in passengers last year, however, officials were cautiously optimistic to see December numbers rise about 1.2%, according to the latest report.

The airport handled about 3.88 million passengers last year, down from slightly more than 4 million passengers in 2012, according to figures released Monday by the Burbank-Glendale-Pasadena Airport Authority.

Back-seat Driver: At Sacramento airport: fancy new terminal, but fewer fliers Jan. 9, 2014

By TONY BIZJAK The Sacramento Bee

http://www.sacbee.com/2014/01/09/6060408/at-sacramento-airport-fancy-new.html

Sacramento International Airport’s billion-dollar terminal has been a lightning rod for opinions. Some love it for its elegance. Others say it’s overkill. And some are just annoyed by that short-distance people-mover shuttle. One thing is definite – not enough passengers are showing up for the airport to pay the bill. The latest numbers, published last week, show passenger levels were down yet again in November, 4 percent lower than the previous year, continuing a several-year slide.

Modesto Airport pledge drive about to take off January 6, 2014

By Kevin Valine, The Modesto Bee

http://www.modbee.com/2014/01/06/3121900/modesto-airport-pledge-drive-about.html

Businesses and other air travelers soon will be asked to show their support for restarting passenger service with Los Angeles.

Modesto’s airport consultant is launching a drive Monday to collect pledges from companies, residents and others that they would spend $1 million on tickets for daily flights to and from Modesto and Los Angeles International airports.

The pledges are not binding, but they would demonstrate the region’s commitment to the service. Sixel Consulting Group – the city’s consultant – says it has an understanding with a major carrier that if it can collect the $1 million in pledges, the carrier will start the Los Angeles flights.

Can airports like BUR and ONT grow in ’14?
Probably not, one consultant says.
January 3, 2014

By Brian Sumers

Mike Boyd, the airline consultant we quoted recently criticizing Ontario city leaders for the outsize expectations for the airport, is out with his airline industry predictions for 2014. And just as he did with me, he pulls no punches.

A lot of his arguments have to do with just how much the U.S. airline industry has consolidated in the past eight years. There are now three major global network carriers (United, Delta and American) and one North America-only network airline (Southwest.) The other carriers, he says, are airlines with specific strategies. They are: Alaska, Frontier, Virgin America, Spirit and JetBlue.

Here are a few I found particularly interesting:

1. Smaller and midsize airports like Burbank, Long Beach and Ontario have little control over what airlines serve them. “In a consolidating airline system, a community’s needs are not a factor in airline planning decisions. And, by all means, programs to get “affordable air fares” are about as useful as picketing the local gas station to drop the price of regular,” he writes. As we have written before, Long Beach is in pretty good shape, mainly because Jetblue has made it a focus city. But Ontario and Burbank have seen traffic declines, and that probably won’t reverse in 2014.

2. Airlines are not growing. “With the stabilization and consolidation of the airline industry, the expansion of airline brands is essentially over. Fighting for share has been replaced by “turf control.” Major airlines are interested in building the bottom line, not necessarily (and often to the detriment of) adding new routes. Growth for the sake of more passengers is long gone.”

3. The golden era of frequent flier programs is over. ” When first implemented by major carriers in the early 1980s… the entire purpose was to get consumers to brand-switch, and become brand-focused in their travel choices. Back then , there were lots of brand choices. Not today. So, FF programs are being transformed into systems that measure the money the consumer spends, and in exchange the consumer earns “non-inconveniences” like early boarding and the ability to pre-select a seat in the extra-legroom section.

Want more from Boyd?

http://www.aviationplanning.com/Aviation%20Predictions%20-%202014.phtml