Small Airports Adjust To Lower Traffic

Airports that once received several flights per day, connecting passengers to multiple hubs, now have only a few flights a day to a single hub.

Small airports are surviving by finding new revenue streams to make up for the loss of traffic and flights as the commercial aviation system continues to evolve. From investing $60 million in longer runways to finding new tenants and developing incubator and industrial sites, many airports are struggling to keep from falling off the national air transportation system map.

Three eastern airports - Salisbury Wicomico, Hagerstown and Lynchburg - have seen traffic erode over the last decade, although Salisbury and Lynchburg are recovering. As with the rest of the industry, 9/11 remains the benchmark for the low point in their traffic. Airports that once received several flights per day, connecting passengers to multiple hubs, now have only a few flights a day to a single hub. Hubs over which passengers once connected have been replaced by other hubs, exacerbating the toll that decisions made in the corporate offices of the nation's legacy carriers take on local communities.

University of Tennessee Professor Jon Lane Smith, who is conducting an economic impact study on what small airports contribute to their local economies, found that only 72 of the 229 non-hub airports involved in the study contribute $14.3 billion in direct, indirect and induced economic activity and nearly $5 billion in payroll. Consequently, it can be easily inferred that the losses prompted by the changing airline market, coupled with the impact of 9/11, have meant the loss of billions of dollars in economic activity for these communities. (RAN, April 3, 2006)

Salisbury, Md., is doing better than most, according to Bob Bryant, who heads the facility as well as the Community Air Service Coalition that commissioned Smith's study. "In the late 1990s, USAirways [through its regional partner] was the sole carrier here," said Bryant. "It was in the late 1980s that we last had other carriers serving us. In the late '90s we had 13 departures per day with service to Baltimore (BWI), Philadelphia (PHL) and Washington National (DCA). After 9/11 that dropped to five a day to PHL. Now we are at eight per day - six to PHL and two to Charlotte, N.C. They are all served by the Havilland Dash 8s operated by USAirways Express Piedmont Airlines. So, we are thrilled to have this level of service."

The airport is only about 10% below its pre-9/11 levels and load factors are higher than they were when it had its 13 daily departures. With high load factors come higher yield, making Salisbury a good market for the carrier. Bryant characterized the Charlotte traffic as largely origin and destination.

Bryant discussed the mechanisms airports are using today to cope with the loss of revenues associated with the cutback of service. "We used to be funded by landing fees, fuel flowage and hangar rental," he said. "Now, a lot of airports are developing non-aeronautical revenue streams on the airport property, but that is easier for some than for others. We refurbished an old terminal building, turning it into a small business incubator with a small community development block grant. Other facilities have been turned into aviation business centers. Airports today have to diversify their revenue streams."

While the advent of the single level of safety constitutes a huge cost barrier to the entry of new carriers to replace the lost service, Bryant sees the financial stabilization of the airline industry itself as more important at the moment, especially with fuel prices escalating. He sees the continuation of the EAS and small community development block grant programs as critical for many non-hub airports.

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