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Central Coast Airports Caught In Turbulence

Small Central Coast airports like Monterey, SLO and Santa Maria can only hope that competition and mergers in the airline industry will mean their operations have a future. What is clear is that the decisions will be out of local hands.

“Airlines are in business to make money and if the can get a better return elsewhere” they don’t care so much “there might be untapped demand in our market” says San luis Obispo airport manager Richard Howell.

American Airlines new logo

SLO has been lobbying United Airlines to do a connecting flight from SLO to Denver for many months and although Howell says there is no definitive answer yet he thinks United will say no. ”They are risk adverse.”

As of now, United flies only SF and LA daily routes out of SLO. The airport’s  only other flight is to Phoenix flown by US Airways. Phoenix is US airways hub but the merger with American Airlines announced in recent days may change that suggests Howell.”The new airline could see fewer flights to Phoenix and more to Dallas –  that bigger American Air hub. He suspects the Tempe Arizona corporate office will be shut down and Phoenix become a a much less traveled city. Arizona press reports says one US Airways office has 750 employees.

The local Business Journal quoted Robert Mittelstaedt, dean of the W.P. Carey School of Business at Arizona State University, saying, “Phoenix is going to lose some jobs” if either merger goes through because of the HQ shift. It also would mean a significant loss of one of the Phoenix area’s largest employers and hometown corporate names. US Airways is Arizona’s 13th-largest employer.
With the merger, American and USAir have created the largest US airline from the ashes of Americans filing of bankruptcy in 2011. American withdrew their flights from SLO as did Delta some years ago in those turbulent times.

How about now? Will the new American continue to service little ol’ SLO?

Howell says the West Coast fares are not as lucrative per passenger mile as other parts of the US citing a return of 11% flying out of North Dakota where there is an oil boom vs 4% here where the market is more mature and there are lots of players and mega-airports.

SLO lost seats on flights since 2007 with the coming of the great recession. In the fall of 2008, the airport experienced a 38 percent reduction in seat capacity as airlines responded to high oil prices and a poor economic climate by removing aircraft from their fleets, Howell remembers.

Looking At The Numbers

SLO flights used to attract 350,000 passengers annually but are now down to 260,000 as of 2012. Of that – a little over 100,000 flew on US Airways and rest on United. Some airlines report a pilot shortage that may contribute to tailwinds experienced by our smaller airports.

Boardings for a year period ending Sept. 30, 2012, at airports across the US were up 0.08 percent, according to the trade group Airports Council
International of North America. For small hub airports, scheduled flights are down 4.84 percent and the number of aircraft seats available is off 2.94 percent, the same Airports Council International reports.

Meanwhile airports like Santa Maria cheer the coming of new players like Allegiant announcing flights to Hawaii starting last year drawn in part by the addition of an extra 2000 ft added to the runway allowing larger planes to land. The runway is longer than either Santa Barbara or SLO.

But that decision has now been reversed.

Allegiant airlines “suspended” weekly flight to Hawaii as of December but said the flights would be resumed in March and ramped up this summer when demand would be better. But Howell says the Official Airline Guide that would typically list this summers flights by now has no flight listed from Santa Maria to Honolulu this summer. Allegiance’s website does offer flights but calls to the company for clarification were not answered due to the “high volume of calls.”

Last year when Allegiant announced the Santa Maria flights they also announced flights from Monterey to Honolulu. But that plane never took off. Total passengers through Monterey on all airlines is down slightly in the past few years – similar to SLO.

Still some newer players could make a difference as the big merge with the bigger. Frontier Air just announced  they would serve the Fresno to Denver market beginning in May. Frontier also flies from Santa Barbara.

Seaport Airlines may be shopping for other cites to fly from. The airline now has a code share agreement with Alaska Airlines.

One smaller California market that seems to be recovering from the pre- 2008 slowdown is Bakersfield where in calendar year 2012 saw 271,000 passengers,best since 2008 when they had 285,000 users. The high was in 2006.

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