Flight Cuts For Regional Airport Still Up In Air
Last updated Wednesday, December 3, 2008 4:37 PM CST in Business
By Kim Souza
THE MORNING NEWS
HIGHFILL -- Major airlines announced this week plans to reduce seat capacity by 8 percent in 2009 amid slumping travel demand.
While it's still a little early to know exactly how Northwest Arkansas Regional Airport (XNA) will be affected, airport officials remain hopeful most of the direct flights will survive the cuts.
"We know that American Eagle will cut its direct flight to Los Angeles in April still leaving XNA with 13 direct flight destinations," said airport director, Scott Van Laningham.
American Airlines and its feeder carrier plan to cut 6 percent of American Eagle's capacity in 2009, while taking an 8.5 percent capacity reduction itself.
American Airlines has more than 40 percent of the traffic marketshare at XNA, according to Van Laningham.
He said American told XNA the Los Angeles destination was the only flight they planned to scrap in 2009. That said, Van Laningham agreed that given the uncertainty in the economy there are no guarantees.
He said at the airport's peak in late 2006 there were 18 direct flight destinations and roughly 60 flights a day. Since then the airport has lost direct flights to Miami, Salt Lake City, Raleigh-Durham and Washington D.C. Now the airport handles 50 daily flights from six airlines, including American, Delta, and United Express.
"In these uncertain times the airlines we serve have all said advanced ticket sales are very low. Customers are not committing to travel 90 days in advance," he said.
Delta, Continental and United Airlines said this week that premium business and first-class seats were not selling, forcing them to make capacity adjustments in the coming months.
While business travel constitutes two-thirds of XNA's traffic, Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas said, companies often cut out travel expenditures when trimming budgets in lean times. She said this will likely lessen XNA traffic if the recession persists.
"Despite lower fuel prices, the weaker consumer demand has kept the industry from rebounding as there are still too many empty seats," Deck said.
Van Laningham said enplanements were down 10 percent over the past three months when compared with a year ago.
"While a 10 percent decline in traffic is not good, it's better than the 20 percent declines other airports our size have seen around the country," he said.
If enplanements hold steady and don't continue to slide further, the airport's 2009 budget should be sufficient, according to Van Laningham.
Deck said the airport has shown resilience in the past as it serves a region that typically outperforms the national economy.
While the recession in 2001 barely hit the radar in Northwest Arkansas, she said this downturn is worse and more widely felt.
A few months ago a concourse expansion at XNA as put on hold. Van Laningham said now is not the time, but he remains hopeful the expansion will be possible by 2010. At the present time he said the airport is working to keep all of its vendors -- six airlines, six car rental businesses, food service and gift shop.
"We know those vendors rely on steady traffic in and out of the airport," he said.
Fast Facts
Marketshare
Airline marketshare at the Northwest Arkansas Regional Airport:
American 46.9 percent
Delta 18.2 percent
Northwest Air 11.5 percent
Continental Express 10.1 percent
United Express 8.4 percent
U.S. Airway 4.9 percent
Source: Staff Report
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MrBill wrote on Dec 3, 2008 9:29 PM: