JIA Flight Numbers Down, But Officials Optimistic

As the airport is looking at expansion, the aviation industry is facing contraction, with the number of carriers and the number of flights all trending downward in 2005.


That drop has an effect on revenue at JIA, which makes money both by renting gate space to the airlines and by getting $4.50 from each passenger who boards an airplane. With the now-out-of-business Independence Air no longer leasing the one gate it had there, for example, the airport is losing about $20,000 a month.

SHAKEUP COULD MEND THE MARKET

The paradoxical hope of the industry, though, is that the troubles of 2005 might actually help make things better for the airlines. Despite the travails, some in the aviation industry actually see the situation improving in the next 12 months. The main reason: a tightening in capacity -- a drop in the number of seats, each of which can then go for a higher price.

Seats per mile, a typical industry measurement, is down 3.9 percent from last year, according to the Air Transportation Association: With supply down, and demand still high, the carriers can charge more for the seats that are left, bumping up ticket prices.

"The trend has been to cut capacity," said Heimlich, which means the airlines can make more money per customer and pay less in fuel, maintenance and landing fees.

And it does appear that demand is staying strong, said Daniel Petree, dean of the College of Business at Embry-Riddle Aeronautical University in Daytona Beach.

"It's pretty clear that ridership is up, capacity utilization is up," Petree said. "We're back at pre-Sept. 11 demand levels. If you look at commercial aviation as a whole, it looks like a long-term growth industry."

This is particularly true in Florida, the management professor said, with both the population increasing and the number of tourists to the area on the rise.

"There's a lot of reasons to come to Florida," he said. "There's no reason to expect that demand would decline."

At JIA, the number of passengers is finally recovered from the Sept. 11 terrorist attacks that sent the industry into a tailspin in 2001. The year before the attacks drastically reduced passenger levels, 5.29 million passengers passed through JIA's gates, dropping to 5.08 million the year and then steadily declining.

In 2005, though, the airport served 5.74 million travelers.

With more people looking to fly and fewer seats available for them, the airlines are in a stronger position, meaning that not only can they charge more, but they can also pressure airports for better deals, Heimlich said. "In terms of attracting service, we are in a period where [airports] have to compete a little more," he said.

Airports might have to charge lower fees to the airline, which look at such measurements on a per-passenger basis. (Jacksonville is already ahead of the curve on this front: JIA's charges work out to around $6 per passenger, more than a dollar lower than the national average.)

Going through the bankruptcy process can help the airlines as well. In Atlanta, for example, bankrupt Delta Air Lines is asking the courts for permission to back out of a lease it has on a hangar at Hartsfield-Jackson International Airport, a move that will save the airline millions of dollars while slicing that revenue out of the airport's balance sheet.

JIA NOT WORRIED ABOUT FUTURE

Local officials, though, say they aren't worried about such a fate befalling JIA. For one, the aiport is not a hub which gives it a diversified customer base. And, they see local demand keeping the market strong but not to the point of overheating.

"My experience has been that a strong airport environment is one which balances low-cost and full-service airlines," said John Clark, executive director of the Aviation Authority. "We have a mixture of airlines providing a range of services."

Consolidations in the airline industry are actually good for JIA, Clark said, with things like the merger between America West and US Airways opening up the city to new markets on the West Coast. Services like that, he said, would help the airport keep the customers who should fly from here, although about 7 percent of them go to other airports, such as Orlando.

"I think we'll have success getting non-stop service to the West Coast," Clark said, "and then there wouldn't be a reason to drive to Orlando."

The expanded terminal should also help attract travelers, say airport officials, with bigger waiting areas, more retail shops and a restaurant located past the security checkpoint.

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