Meeting planners know better than anyone: Thanks to inadequate airlift, getting to and from some destinations is shockingly difficult. And it’s only getting harder, according to
The Wall Street Journal, which this week reported on a new study of U.S. air service, the results of which show a correlation between increased efficiency and decreased service among U.S. airlines.
Conducted by the International Center for Air Transportation (ICAT) at the Massachusetts Institute of Technology (MIT), the study, “Trends and Market Forces Shaping Small Community Air Service in the United States,” analyzed air service between 2007 and 2012 and found that U.S. airlines have cut the number of yearly scheduled domestic flights by 1.4 million, or 14 percent.
Hardest hit, according to researchers, were the country’s 35 mid-sized hubs — airports in cities such as Albuquerque, Nashville, Cincinnati, Memphis, Pittsburgh and St. Louis — where airlines have cut 26.2 percent of all domestic flights, compared to a decrease of 8.8 percent and 18.2 percent, respectively, at large- and small-hub airports.
“The past six years have been challenging ones for domestic air service in the United States,” reads its report. “The nation’s small- and medium-sized airports have been disproportionally affected by these reductions in service, and recent airline behavior appears to signal a trend towards consolidation of service at the largest airports with fewer direct flights available from smaller airports.”
Although the economic downturn and rising fuel costs are partly to blame for service reductions, another major culprit is airline restructuring, according to ICAT, which cites so-called “capacity discipline” as a major concern.
“Capacity discipline evolved in response to challenging economic conditions as airline managers shifted their attention away from a strategy focused on capacity expansion to one that prioritized high yields and load factors,” ICAT explains in its report. “Instead of operating as many flights as possible in an attempt to gain market share, large airlines began a more efficient capacity and network management paradigm in an attempt to reduce operating costs by removing redundant flying and rationalizing service at some smaller hubs. This profitability-focused management strategy helped the airlines’ balance sheets and reversed previous trends of low yields and annual losses. However, this pursuit of improved airline efficiency resulted in cutbacks in domestic service at many U.S. airports.”
According to The Wall Street Journal, their route reductions have helped airlines become leaner and more profitable, ensuring the survival of an otherwise endangered industry. For passengers, however, the cost has been decreased convenience and increased fares: from 2007 to 2012, average domestic round-trip airfares increased 4 percent to $374.
“In Boise, Idaho, where the nearest big airport is a five-hour drive south in Salt Lake City, airlines cut 40 percent of the flights over the study period, including nonstop service to Atlanta,” the paper reports. “Boise also has fewer airlines flying to Seattle, Los Angeles and Portland, Ore., helping to lift the average inflation-adjusted fare there by 18 percent since 2007.”
Concludes ICAT: “The important debate about which communities ‘deserve’ commercial air service will almost certainly intensify over the next several years, and its arguments will be made in airline boardrooms, in the halls of Congress and over the check-in counters at smaller airports.”