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Reduced Flights Affect Memphis, Tenn., Airport

July 15, 2008

By Jane Roberts, The Commercial Appeal, Memphis, Tenn.

Jul. 15–Compared to smaller cities and leisure travel destinations — where fuel prices have drastically reduced or eliminated air service — Northwest Airlines has cut little in Memphis.

Based on an analysis from October 2007 to October 2008 by Washington-based InterVISTAS-ga2, Northwest has reduced capacity here by 6 percent or 32,763 seats a month.

It has increased frequency — the number of planes going to one destination per day — by 2 percent, and added service to Savannah, Ga., Columbia, Mo., and Norfolk, Va.

“In light of the cuts the airlines are making all over the country, I think it’s encouraging to note that we have a small increase in frequency and really quite modest cuts in capacity,” said Larry Cox, chief executive of the Memphis-Shelby County Airport Authority. “I would like to think it’s because the Memphis airport has lower costs and better operating statistics, that our airport is superior from cost to operate than other markets.”

As airlines pare back, about 60 U.S. communities have lost all air service. Leisure markets, including Las Vegas and Orlando, have taken cuts as high as 25 percent as vacation travelers reduce plans or stay at home.

Northwest cut 24 percent of its seats from Memphis to Orlando and 54 percent to Las Vegas. It also cut 60 percent of capacity to Denver.

“Everybody is hitting Las Vegas. It’s a low-yield, leisure market that doesn’t pay when fuel is at $135 a barrel,” said Jon Ash, InterVISTAS president.

But significant hubs like Houston are off 10-12 percent, Ash said, and more cuts are possible.

“Most carriers tended to make their announcement in late May or early to mid-June, but when you get to November and December, I think we could see some more pulldowns,” Ash said.

Capacity to cities within a day’s drive of Memphis are also down significantly, including Baton Rouge, La., down 43 percent; Gulfport, Miss., down 41 percent and Atlanta, down 25 percent.

In May, the most recent figures available, the number of enplaned passengers here fell 4.6 percent or 22,907 passengers from the period a year ago.

“Normally in June, our parking lots are full. They haven’t been this year,” said Cox.

Parking is down more than enplanement numbers,” he said, a reflection that passengers are choosing to be dropped off rather than park as they retool their household budgets to reflect higher energy and food costs.

Parking revenue is the airport’s largest source of income from non-airfield operations, followed by revenue from rental cars.

“We’re watching it like a hawk to see what adjustments we may need to make,” Cox said.

If the airport budget must be decreased, he said, capital budgets will be scrutinized first.

“Then we may have to defer maintenance or reduce our own travel, just like we all do when budgets get tight.”

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Copyright (c) 2008, The Commercial Appeal, Memphis, Tenn.

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NWA,




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