Buzz arrives as Southwest exits BKG

There’s a new buzz surrounding local air travel.

A new charter service known as Buzz Airways is ringing in a new era in Branson in the absence of Southwest Airlines even as passenger volumes take flight in Springfield.

On June 12, Smyrna, Tenn.-based charter-flight service Corporate Flight Management Inc., which this year launched Buzz Airways, entered the Branson market with nonstop flights to Chicago and Houston. The new carrier is helping fill service holes created by the exit of Dallas-based Southwest Airlines Co. (NYSE: LUV), which stopped flights from Branson June 7. Southwest had offered nonstop flights since March 2013 to Orlando, Chicago, Dallas and Houston at BKG, as Branson is known in airport code.

In the Queen City, passenger volume was up 15 percent in May and up 12 percent for the first five months of the year – the greatest gains for Springfield-Branson National Airport since 2005.

Farewell, Branson
Branson Airport Executive Director Jeff Bourk said the 30-seat charter planes fly out of Branson during the tourist season six days a week to Chicago and Houston.

“It’s nice to have nonstop flights to those cities continue after Southwest pulled out,” Bourk said. “Of course, we are continuing to work on bringing new carriers to Branson for 2015, but it’s great to have Buzz in here flying and taking advantage of the opportunity.”

The post-Southwest drop-off is fairly dramatic for Branson, with nearly 14,000 passengers in May, and only around 6,000 total passengers projected for June. Based on capacity for Buzz, some 3,500 to 4,000 passengers are expected to use the charter service through the summer, according to information provided by Buzz Airways.

Buzz Airways Chief Commercial Officer Matt Chaifetz said Branson is the inaugural market for Buzz, but it’s not new to the city. He said Corporate Flight Management, which has been in business since 1982, was contracted to run service for Branson Air Express in the early days of the airport.

The company that has provided private and contract services for years to casino travelers and sports teams decided it could fill a niche with Buzz.

“In the last 12 months, we’ve been approached by small communities desperate to fill a void in their air service after carriers have decided to pull out or reduce flights to the point where they are not getting the service they are used to,” Chaifetz said, adding Corporate Flight Management reached out to Branson to see if it could run service under the Buzz brand though Sept. 2.

He said its 30-seat planes should be more than 70 percent full in June and 80 percent full in July and August flying out of BKG. Chaifetz said the company is now considering extending service in Branson even as it looks to contract with other airports with similar voids as BKG.  

Bourk said Southwest’s departure remains a source of frustration. He said load factors for Southwest were above 80 percent during its time in Branson – a key metric it uses in determining the profitability of flights – but that wasn’t enough to keep the airline around.

“From our perspective, Southwest was doing quite well in Branson,” Bourk said. “But there were circumstances beyond our control that led to its departure. The U.S. Airways and American merger, for example, created lots of new slots for it in New York and Washington, D.C.”

He added demand for international flights and oppotunties for increased service at Dallas also are stretching the Southwest fleet.

BKG passenger counts were up during the first five months of the year with Southwest still on board. January through May saw 101,332 total passengers come through BKG, up 18 percent compared to the 85,900 that landed or took off from Branson during the same period last year.

“That’s great, but obviously, a major part of that increase was Southwest,” Bourk said. “We are working on service for 2015. We believe we have a lot of strong data points for other carriers to consider.

“We got to have Southwest service in Branson for 15 months, and that service proved a major network carrier in Branson can be successful.”

Financial projections on file with the Municipal Securities Rulemaking Board indicate the severity of Southwest’s exit for BKG.

With almost a full year running Southwest, 2013 operating income at Branson Airport was $3.93 million – not including depreciation and interest expenses – but is projected to be in the red to the tune of $278,000 in 2014. Enplanements, or boarding passengers, are expected to be chopped in half this year with a projection of 64,591 compared to 133,684 in 2013.

Through 2012, net operating income for BKG during its first four years in operation was collectively in the hole by $21 million.

SGF takeoff
Brian Weiler, director of aviation at the Springfield airport, said all four of its airlines added capacity to their air service last month – an encouraging sign in an industry busy weeding out unpopular routes in recent years.

“Five months is a pretty good trend for double-digit growth, and then May was just a very good month. There is no other way to say it,” Weiler said.

Passenger volumes are up 11.7 percent through May 31, reaching 327,355, from 292,967 passengers through the first five months of 2013. Monthly passenger activity grew 15 percent to 75,452 in May, compared to 65,611 in the same month a year ago.

The strong movement comes on the heels of modest 2013 passenger growth, less than 1 percent, and 3 percent growth in 2012.

“At the end of the day, I think growing demand is a reflection of a growing economic base in Springfield,” Weiler said.

The jump in volume represents only the second time since the turn of the century the airport increased passenger counts by double digits during the first five months of the year. The arrival of Allegiant Air (Nasdaq: ALGT) and Delta Air Lines (NYSE: DAL) in Springfield in 2005 led the first double-digit passenger volume increase.

In May, Allegiant led SGF’s carriers with 35.9 percent more seats available than a year ago. American Airlines Group Inc. (Nasdaq: AAL) followed with an 11.1 percent increase in seat count for Springfield fliers, while United Airlines and Delta were in the 3 percent range. Weiler said Delta plans to increase flight seats to Atlanta by 25 percent per month beginning in September.

While it remains to be seen, Weiler said the move by Southwest Airlines is likely a nonfactor for SGF.

“Since Southwest has been down there, our enplanements have been up slightly. I don’t know that it is positive or negative for us. It is what it is,” he said.