On the heels of recording positive 2012 passenger activity uncommon to the regional airline industry, Springfield-Branson National Airport officials are navigating through the fallout of the announced merger between U.S. Airways Group Inc. (NYSE: LCC) and bankrupt American Airlines parent company AMR Corp. (OTCQB: AAMRQ).
The fate of nearly 75 employees of American Eagle Airlines Inc., the airline’s regional partner that flies out of Springfield, is among the concerns in airport operational changes, said SGF spokesman Kent Boyd.
“The question is, what happens to Eagle? We don’t know the answer,” Boyd said of American’s recent interest in divesting American Eagle and opting to lease regional fleets.
In January, American Airlines reached an agreement with Republic Airways Holdings Inc. to operate its regional jets under the American Eagle brand by midyear, pending bankruptcy court approval.
Currently, the familiar 50-seat American Eagle planes run direct routes from Springfield to Dallas and Chicago, Boyd said, noting the Dallas flight is a longtime profit center for the carrier, but Chicago’s service is one of the least profitable routes out of SGF.
United Airlines also runs Springfield direct to Chicago.
“We’re sure the Dallas service is safe,” he said. “We’re guessing it may increase the number of flights there on a daily basis.”
The Springfield-Branson National Airport passenger count last year increased 2.8 percent to 752,214 passengers. The local activity goes against the grain across the industry, SGF officials said.
“The airlines are in cost-cutting mode. They’re dealing with the lingering effects of the recession by cutting back on seat capacity and number of flights,” SGF Director of Aviation Brian Weiler said in a news release.
“The result is that many airports across the country have seen flat or negative passenger growth.”
In SGF’s analysis of four competing airports, the Springfield operation recorded the least amount of passengers in 2012, but it realized the largest percentage change year-to-year.
Other airport counts:
- Lambert-St. Louis International Airport recorded 12.7 million passengers in 2012, resulting in a 1.1 percent increase from 2011.
- Kansas City International Airport had 9.9 million passengers, for a 4 percent decrease.
- Tulsa International Airport reported 2.7 million passengers and a year-to-year decrease of 2 percent.
- Northwest Arkansas Regional Airport experienced a 0.6 percent drop to 1.1 million passengers.
Boyd related the airport’s passenger growth to the Springfield metropolitan statistical area’s jobless rate. In December, the Springfield metro unemployment rate was 5.5 percent, compared to a national jobless rate of 7.8 percent that month.
“There’s an old rule of thumb in the airline industry – more employment means more people flying,” Boyd said in the release.
While Boyd said the latest proposed airline merger would not create overlap in flight patterns out of SGF, the partnership could strengthen the Springfield airport’s chances to land a direct stop to Charlotte, N.C., a hub for U.S. Airways.
“We’ve been talking to U.S. Airways for close to four years,” he added. “Charlotte has become a major trade center with international flights to Europe and South America.”
On the global level, the $11 billion U.S. Airways-American stock deal would create the world’s largest airline by passenger traffic.
Under the merger plan – supported by both boards and awaiting stockholder and bankruptcy court approvals – combining the third-largest carrier, American, and the fifth largest, U.S. Airways, would represent 24 percent of the flying market, edging out Delta Air Lines’ 22 percent share, according to CNNMoney research.
American’s planned move to phase out the smaller American Eagle jets and enter into lease agreements with regional carrier Republic Airways could increase local seat capacities.
“The airlines en mass are starting to get rid of the small regional jets, meaning 50 seats or less,” Boyd said, referring to the bulk of jet service in Springfield. “The price of fuel got so high that the balance shifted. There aren’t enough seats on a regional jet to pay for the gas.”
Boyd said Republic Air is known to fly 70-seat regional jets, and statistically the demand appears to be strong enough to support it.
“Right now, the airplanes are leaving here maxed out,” he said. “I think the airlines are actually turning away business here, called spillage. Hopefully, the bigger regional jets will give us more seats and reduce the spillage.”
Airport officials are projecting a flat year ahead. “We may likely finish down,” Boyd said, pointing to Delta’s recent elimination of service to Memphis, which at the end of the year was only one flight per day, and Allegiant’s hiatus of flights to Los Angeles until June.
In spite of the six-month break to LAX, Boyd said January passenger volumes were up nearly 1 percent. “The mainline carriers are apparently picking up the slack,” he said.
Another year-end uptick at the airport was the increase in air freight shipments, a leading economic indicator.
SGF recorded a 6.6 percent increase to 28.8 million pounds of air freight in 2012. The Springfield airport again compared favorably to its regional counterparts studied:
- Kansas City International Airport, 2.9 percent increase to 189.9 million pounds;
- Tulsa International Airport, 1.1 percent increase to 56.4 million pounds;
- Lambert - St. Louis International Airport, 0.5 percent decrease to 152.6 million pounds; and
- Northwest Arkansas Regional Airport, 6.7 percent decrease to 55.3 million pounds.
“What I take from that is that our regional economy is doing better,” Boyd said.
