Airports are investing millions in upgrades while airlines are cutting capacity. T+L takes a closer look.
Whether you think 2012 has been a good or bad year for air travel likely depends on where you stand—or, to be more precise, where you’re flying from.
The past two years have seen a basic reordering of priorities among major airlines. Fueled by financial uncertainties and volatile oil prices, they’ve decreased capacity by about 11 percent in the past five years, and are focusing on routes that provide the highest revenue, especially those that most efficiently feed into the growing number of big domestic hubs with high-yield international business traffic. At the same time, brand-name airlines are increasingly funneling traffic through code-sharing arrangements and formidable global-alliance partners. Hence, a growing number of American Airlines flights between, say, New York and London are operated by Oneworld American alliance partner British Airways.
As a result, your regional air service is more vulnerable to cuts. If that fuel-inefficient, 50-seat regional jet isn’t departing from your local airport reliably full of passengers connecting to code-share and international-alliance partners, chances are very good that the 50-seater will be retired to the desert. “This is not a temporary dynamic,” says Michael Boyd, chairman of the Evergreen, Colorado–based airline-forecasting firm Boyd Group International. “It is a fundamental shift in air-travel reality.”
What does this mean for domestic fliers? On the bright side, in the first half of 2012, late arrivals were at 16.3 percent, their lowest level in 18 years, according to the U.S. Department of Transportation. (In 2007, just before the recession, 26.6 percent of domestic flights arrived late.)
Also notable are the spending sprees taking place at a number of the biggest “gateway” airports as airlines focus on improving these higher-yield hubs. Last summer, Miami International Airport opened a new three-story, 400,000-square-foot international-arrivals terminal with a 72-lane passport area. In late spring, Hartsfield-Jackson Atlanta International Airport, the nation’s busiest in terms of number of passengers handled, opened a $1.4 billion international terminal as part of a $6 billion renovation plan. Los Angeles International Airport, likewise, is nearing completion of a new $1.5 billion international terminal. Major infrastructure projects are also under way at Chicago O’Hare, Kennedy International, and Dallas–Fort Worth—the list goes on.
But as airlines concentrate service in the roughly 30 major domestic hubs that now account for 70 percent of all passenger traffic, other once-proud airports are languishing. All over the country, airports that made big bets with their major tenant airlines are now struggling with declining service and heavy debt loads from all of those renovations. Some resemble ghost towns, with sparkling new but virtually empty terminals. There is no sadder example of this than Pittsburgh International Airport, which opened a $1 billion terminal with shopping-mall retail operations in 1992, largely at the urging of its main tenant, US Airways. Soon, Pittsburgh International, with its innovative AirMall shopping complex, was routinely appearing on lists of the world’s top international airports. In 1997, the airport handled 20.7 million passengers. But by 2011, after US Airways closed its hub there and sharply reduced schedules at Pittsburgh, the airport handled only 8.3 million.
Passengers, meanwhile, are faced with greatly diminished domestic flight options. Routes that previously were nonstop now sometimes require multiple connections. And people in midsize cities who once had abundant flights to choose from are driving longer distances to airports with better service.
And that, unfortunately, is the new normal for much of the country. “The basic economic foundations that once supported air service at many small and midsize airports are sinking fast,” Boyd says. “On the other hand, these smaller cities that are losing flights do usually have good air service. But increasingly, it’s in another city, an hour’s drive away.”