ANALYZING SMALL TOWN AIR SERVICE

ANALYZING SMALL TOWN AIR SERVICE

GAO report looks at the two-year trend

May 2002

In March, the U.S. General Accounting Office issued to Congress a report, "Air Service Trends at Small Communities Since October 2000." This brief synopsis is taken directly from the 65-page report, which looks at trends before and after the tragedies of 9/11.

In October 2000, the typical or median small community in our analysis had service from two airlines, with a total of nine daily departing flights. Forty-one percent of the communities were served by only one airline.

Airlines performed the vast majority of these flights - over 80 percent - with turboprop aircraft. The most obvious factor that accounts for the level of service at these communities is their size. The median community population was about 120,000; the median number of daily passenger enplanements in 1999 was about 150. Within the group of 202 communities studied, those with the smallest populations generally had the lowest levels of service.

The level of service varied for two other main reasons. One is the level of local economic activity, as measured by such indicators as employment or per capita income. Small community airports with the highest levels of service tended to be those serving communities with more economic activity, such as Northwest Arkansas Regional Airport (located near the headquarters for Wal-Mart Stores, Inc.) or resort destinations like Key West, FL. Such communities may have 60 or more scheduled commercial departures per day, while communities at the other end of the scale have only one or two.

Another factor that contributes to limited service for many of these communities is their proximity to larger airports.

Nearly half of the 202 communities analyzed are within 100 miles of an airport that serves as a major airline's hub or that is served by a low-fare carrier. This is particularly the case in the eastern half of the U.S.

Although carriers had clearly reduced total departure levels at small communities before the terrorist attacks, airlines made more of the total reduction in departures after September 11. Analyses of industry service levels show that communities of all sizes shared in service reductions. At the typical small community, the number of departures dropped by three flights per day, from nine to six.

To the extent that these communities had jet service, it was largely unaffected; nearly all of the decline came in turboprop flights.

Service indicators other than the number of departures - such as the number of airlines providing service - also showed general declines, both before and after September 11. For example, the percentage of small communities served by only one airline increased from 41 percent in October 2000 to 47 percent by October 2001, with slightly more of the increase coming before September 11.

When one or more carriers pulled out of a community, passengers often lost connecting service to other destinations. However, while service reductions predominated, airlines initiated service at 14 of the 202 communities. Virtually all of those increases in service had been planned or put in place before September 11.

Besides the economic slowdown and September 11 attacks, airlines' decisions about the makeup and deployment of their fleet also influenced service levels at small communities. For example, some communities lost service when carriers retired certain small types of aircraft.

In October 2000, the typical small community among the 202 analyzed had the following levels of service:

o Service from two different airlines or their regional affiliates, each providing service to a different hub. A substantial minority of the communities - 41 percent - had service from only one airline.
o Nine departing flights a day, most if not all of them turboprops rather than jets. In all, only 67 of the 202 communities had any jet service.

The level of service varied significantly from community to community. At the higher end were airports serving resort destinations like Key West, FL, where five different carriers operated 44 average daily departures to six nonstop destinations, and communities such as Fayetteville and Bentonville, AR, near the Northwest Arkansas Regional Airport, where five air carriers scheduled 42 average daily jet and turboprop departures to seven nonstop destinations.

At the other extreme were communities such as Hattiesburg, MS, and Thief River Falls, MN, with an average of three and one daily departures, respectively. In total, the ten small communities with the most air service typically had more than 38 scheduled departures per day, while the ten small communities with the least air service typically had fewer than three scheduled departures per day.

For every additional 25,000 jobs in a county, a community received 4.3 more jet departures per week and 4.8 more turboprop departures per week. Similarly, for every additional $5,000 in per capita income, a community received 3.3 more jet departures per week and 12.7 more turboprop departures per week.

Between October 2000 and October 2001 (revised [for 9/11]), the number of total daily departures in small communities dropped by 19 percent. Airlines planned part of these decreases before September 11 (6 percent) but made even steeper reductions (13 percent) afterward. In 36 communities, at least one of the airlines providing service withdrew entirely from the market, with most of these withdrawals coming before September 11. The number of communities with service from only one airline grew by 12, raising the percentage of communities with one-airline service to 47 percent. While many communities lost service, carriers initiated service at 14 communities. Nearly all of these gains occurred prior to September 11.

Airlines scheduled an average of 2,406 departures daily during the week of October 15-21, 2000. In their original schedules for the week of October 15-21, 2001, airlines had planned to operate an average of 2,257 departures per day, a reduction of 6 percent from October 2000. Airlines made further service reductions following Septem-ber 11. The average number of scheduled daily departures from smaller communities dropped to 1,937, or about 320 (13 percent) fewer departures than originally planned.

For a complete copy of the report, visit www.gao.gov; report no. GAO-02-432.

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