Capacity Cuts Jeopardize Airlift

In the wake of rising fuel prices, airlines are relentlessly slashing service to both major and second-tier cities, threatening the ability of planners to get attendees where they need to go.

In recent weeks, Continental Airlines announced the grounding of 67 Boeing planes and ending flights to 15 cities. American Airlines intends to retire up to 85 aircraft, cutting capacity by 12 percent, in the fourth quarter. United Airlines announced the removal of all its Boeing 737s and six 747 planes and an 8-percent capacity reduction for the fourth quarter.

Over the past several months, airlift has been cut back in virtually every major meetings destination. Startlingly, some 30 U.S. cities have seen their scheduled flights disappear altogether.

“It’s affecting us all,” said Pat Schaumann, St. Louis-based vice president of Kuoni Events USA Inc. “As a result, I think we’ll see more telepresence conferences, like webinars, than ever before. They won’t replace face-to-face meetings, but they will increase.”

According to the Official Airline Guide, scheduled flights have dropped 3 percent over the past year, representing a loss of 22,900 flights. Chicago has lost about 9 percent of those flights, according to the Bureau of Transportation Statistics, while Washington, DC (Dulles) has lost 12 percent, Boston 13 percent, and Pittsburgh a whopping 25 percent.

One result, Schaumann projects, is that planners might look more closely at chartered flights. “Fuel is fuel, but charters have no security checks or baggage fees, and you can fly wherever you want to,” she said. “It’s going to be worth looking at.”

Another approach for planners is to strictly enforce corporate contracts with favored carriers. “You want to make sure people are sticking to favored carriers and within booking windows and price targets,” said Laurie Sharp, manager of corporate and field market events for Brocade, a tech firm in San Jose, CA.

Some small cities aren’t sitting still. Charleston, WV, this spring announced plans with a group of investors led by Skybus Airlines founder and South Charleston native John Weikle to start a new “ultra low-cost” airline to serve the city.

Originally published July 7, 2008