Flight Blog


Airline growth is always good, but the new year, and the growth that comes with it, presents challenges — we need your help to make sure we stay on track.

A couple of weeks ago the airlines serving Springfield turned in their passenger numbers for November — those numbers all but confirm that 2015 will end up being the busiest year in the history of the Springfield airport.

The all-time airline passenger record for Springfield was set in 2005, with 888,738 total passengers. This year the airlines are on track to move more than 920,000 people through our airport.

Airline growth is good for Springfield and the region, but it presents challenges for the airport — we need your help to make sure we stay on track.

Earlier this year we commissioned a survey of airline passengers at the airport. They had mostly good things to say, but as you’ll see in a minute, there’s room for improvement.

H2R Marketing Research, a Springfield based company, conducted the survey from May 15th to August 15th of this year. 543 departing passengers participated. Overall satisfaction was 4.48 on a 5 point scale. These same passengers rated other airports at 3.61.

Jerry Henry, the owner of H2R, says the survey shows that wait time in the check-in line is the single most important thing to passengers — the shorter, the better. They also want clean restrooms, helpful and efficient TSA security staff, and a pleasing atmosphere. In all of these areas the airport gets very high marks.

But here’s the kicker —

The last passenger survey we did was in 2011. Since then the number of people using the airport has increased more than 20%, while the average satisfaction score fell 3%. That’s the challenge we face — as the number of people using the airport grows, customer satisfaction goes down.

Jerry tells us that whenever there a big increase in customers, satisfaction levels tend to go down. As he puts it, “It doesn’t matter what kind of business you’re talking about — a hotel, an attraction, or a retail store. The decrease in customer satisfaction is not unexpected. What was unexpected was how little the score fell.”

While it’s good to know that a 3% decrease is good, we want to do better. And that’s where we need your help. Give us your feedback; let us know how we’re doing — not just today, but anytime.

There are many things that people dislike about air travel. Those things show up clearly in the survey. They include the cost of airline fare. Airline fees, delayed flights, cancelled flights, airplane mechanical problems, parking rates, security screening, and the price of coffee.

We sympathize, but please know that the airport has little or no control over some of these issues. Believe you me — if we could fix some of those airline issues we’d do it in a heartbeat!

That being said let us know everything. We’ll let you know if it’s something the airport can’t control, and why. And we’ll do our best to improve those things that we can.

You can reach out to us on Facebook, www.facebook.com/flysgf , via Twitter @flySGF, or email: info at flyspringfield.com.

You can read the full survey report by clicking here.

 


 

In our recent post about the slight downward trend in fares Jason Blevins offered this on Facebook:

“You (the airport) have a direct influence in fare rates. Your contracted landing fees and SKY HIGH fuel rates drive up the costs.” 

Here’s how it really works. Let’s start with fuel. The airport does not sell fuel to the airlines. Each airline has its own contract with the oil company.

As for landing fees, that assertion is off base too...

The airport/airline business has a metric called “cost per enplanement.” That’s CPE for short.

CPE is the cost to the airline, at a given airport, for every passenger who gets on a plane. CPE includes landing fees, and the lease cost airlines pay for facilities at the airport.

In April the CPE at the Springfield airport was $5.70 per passenger. In 2012 a report by Moody’s Investment Services stated that the average CPE nationwide was $7.76.

Keep in mind that the Moody’s number is an average. At some airports it's much higher. Want to see for yourself? Click here to take the Google search for a CPE spin ....

You’ll find in places like Miami International the CPE was $20.39 in 2013. Cleveland: $15.37 in 2013. Dallas: $6.74 in 2012.

If you’d like to talk just about landing fees, the current landing fee at Springfield is $1.30 per thousand pounds. 

Click here to check out this St. Louis Post-Dispatch story from 2011 on landing fees in St. Louis...

What you'll find in the story: in 2011 the landing fee at St. Louis was $8.96. Kansas City: $1.96.

I know a lot of you are scratching your head at this point. If CPE is lower in Springfield, why aren’t fares lower? As a matter of principle, most airports, including ours, do everything they can to keep cost low. But in the final analysis CPE doesn't have much to do with fares.

Don’t take my word for it. Check out this story from January in the Dallas Morning News...

Please note the paper's quote from the chairman of American Airlines, Doug Parker: “What we believe is that pricing is tied to demand… and that’s what we should base our pricing on and not based on our cost structure.”

The newspaper reporter put it more succinctly: "On their earnings call Tuesday, American Airlines executives said that demand, not costs, determines what they charge for fares."
 


Aug 11 2015 Fares Are Down, Say What?! BY sgf-adminTAGS Airlines, Fares

 

Here’s something you haven’t heard about …

In Springfield, and Northwest Arkansas, the airlines are charging less; fares are going down.

Yes, you read that right. Fares are down. They've been going down for the past two years. They’re not down much, but they are down. Take a look at the numbers. The cost of fare is shown as “one-way” because that’s how the industry tracks fare data:

 

Springfield (SGF)

2010

2011

2012

2013

2014

Average one-way fare

$230.03

$255.00

$260.49

$257.82

$253.56

           
           

Northwest Arkansas (XNA)

2010

2011

2012

2013

2014

Average one-way fare

$276.41

$305.59

$318.02

$318.21

$296.73

Fare data compiled by Boyd Group International August 10, 2015

 

Common wisdom says the recent airline mergers have driven up the cost of flying, but it isn’t happening here. So, what’s going on? We think it boils down to one thing: competition among the four big airlines that survived the consolidation wave. Here’s an example …

In early July American Airlines announced new service between Springfield and Charlotte, beginning November 5. The lowest introductory fare we saw American offer was $225 round-trip. The price bounced up and down for several days. Then Delta and United jumped in with their own low fare trips to Charlotte. By July 21 all three airlines matched each other for round-trip to Charlotte: $303.

This kind of competitive price matching goes on in Springfield more than people realize …

Since July 1 we’ve seen the following price wars:

  • Allegiant offered round-trip fare to Los Angeles for $322. Delta countered with $318.
  • American, Delta, and United, matched each other with round-trips fares to Cancun: $566.
  • Delta and United matched each other (again) for a round-trip to Charlotte: $278.
  • American’s fare for a round-trip to Cancun fell to $464.
  • Delta and United matched fares to Fort Lauderdale: $280.

In the past week we’ve seen:

  • American round-trip to Dallas: $170
  • American round-trip to Austin: $274
  • American round-trip to New York City - Kennedy Airport: $315
  • Allegiant round-trip to Las Vegas: $142
  • Allegiant round-trip to St. Petersburg/Tampa: $135
  • Delta round-trip to Charlotte: $224

There's more, but you get the idea — the airlines are definitely going head to head in Springfield. Ditto for Northwest Arkansas. Let's hope the trend continues.

 


 
The peak summer travel season is in full swing at our airport and it's promising to get even busier ......
 
In June, July, and August, Allegiant Air is growing its Springfield flight schedule by a total of 57% over the same three month period last year (222 flights this year, vs. 141 last summer). This growth comes after a banner 2014 when passenger numbers at the Springfield airport grew at an annual clip of 12%.

Allegiant flights to Orlando get the biggest bump. In June the airline will fly between Springfield and Orlando six days a week. That’s up from four days a week last June.
 
The increase in the Allegiant schedule will probably give the airport double digit passenger growth in June, July and August. It’s a strong indicator of continued improvement in the regional and national economies. People wouldn’t be buying Allegiant’s vacation packages in numbers like this if their budgets were hurting.
 
Not to be left out, the other Springfield airlines are bringing bigger planes to Springfield. American, Delta, and United are all shedding some of their 50-seat regional jets:
 
  • Delta's bringing in an Airbus 319 (126 sets) for one its four daily flights to Atlanta
  • American begins using Bombardier CRJ-900s (76 seats) for two of its seven daily flights to Dallas
  • United begins using Bombardier CRJ-700s (66 seats) for two of its four daily flights to Chicago
Here’s the bottom line: this summer the airlines will shed a total of seven 50-seat jets from their Springfield schedules. That’s good for a couple of reasons. Number one: the airlines wouldn’t bring bigger jets here if they couldn’t fill them. It shows that demand for air travel in Springfield is high. The second reason is comfort. Many people hate 50-seat jets because they’re cramped and stuffy. So the bigger planes are a welcome relief.
 
Some 50-seaters will probably come back as the summer travel season winds down. But some may stick around. Airline schedules for the fall are preliminary at this point, but they all show some bigger planes in the mix.
 
Why does all this matter? The growth is passengers (and flights) means that airport passenger numbers are trending up. Not just month to month, but year to year. After the uncertainty of the recession, this trend is very welcome news — not just for the airport, but for the local economy and travelers.
 
 

 

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.