Reasons for the decline include the recession and slow economic recovery, high and volatile fuel prices, and the ongoing consolidation of airline services. “The nation’s small and medium-sized airports have been disproportionally affected by these reductions in service,” write Michael Wittman and William Swelbar, authors of the report, “Trends and Market Shaping Small Community Air Service in the United States.”
One of the biggest factors for the drop in service is the shift away from “operating as many flights as possible in an attempt to gain market share,” towards more “efficient capacity and network management.” In other words, airlines are removing redundant flights and focusing on efficiency, rather than growth, to ensure profitability.
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The effect has been to blur the distinction between medium-hub and small-hub airports as airlines schedule fewer flights. Medium-hub airports carry between .25 percent and 1 percent of the nation’s air traffic passengers in a given year, according to the Federal Aviation Administration. Small-hub airports carry between .05 percent and .25 percent of the nation’s air passengers. In contrast, large-hub airports carry at least 1 percent of air passenger traffic. There are 29 of these airports, 35 medium-hub airports and 74 cities with small-hubs.
Some of the most affected mid-sized cities include: Cincinnati (departures down 64.4 percent); Memphis (-40.6 percent); Oakland (-36.6 percent); Pittsburgh (-39.7 percent); Providence (-37.6 percent); Reno (-31.3 percent); and San Jose (-33.2 percent). Only New Orleans saw an increase in departures (+4.5 percent).
Not surprisingly, the small and mid-sized cities most affected by the downturn in service are taking steps to keep commercial air service at their airports. Many cities are offering financial incentives to airlines to either retain service or open new routes. “Along with financial transfers in exchange for service, airports have also offered gratis advertising, revenue guarantees, and waived landing fees for services to attract airlines,” write Wittman and Swelbar.
As for the future, air service in small and mid-sized cities will depend on a number of factors: Whether the large, network carriers, such as Southwest, will give way to so-called ultra-regional airlines, such as Cape Air and Great Lakes Airlines, which use much smaller-sized planes than the typical Boeing 737; whether economic conditions continue to improve to justify continued service; whether new legislation will negatively affect regional airlines; and whether airlines will continue with their current strategy focused on efficiency and profitability vs market share.
Most likely, however, small to mid-sized cities will not see air service recover to the levels when airlines were rapidly expanding service. Instead, they will see fewer flights in smaller planes at their airports, operated by regional carriers in close proximity to major hubs, such as Atlanta, Chicago, Dallas-Fort Worth, Los Angeles and New York.
