Billings, Mont., Airport Director Laments 'Too Many Cold Seats'

Dec. 18--Billings Airport Director Bruce Putnam ran his pink highlighter down the list of major airlines immersed in Chapter 11 bankruptcy: Northwest Airlines, Delta Airlines, United Airlines and US Airways, which recently bought America West.

Demand for domestic airline seats has grown 19 percent from 2002, according to the Federal Aviation Administration.

Yet high fuel and labor costs, fierce competition, somewhat lower airfares and overcapacity all are forcing major cutbacks in U.S. airlines. Billings is no exception.

"This is happening all over the U.S.," Putnam said. "There is too much capacity, which means there are too many cold seats."

On Dec. 1, Delta cut daily flights to Billings from eight to six and reduced service to six other Montana airports. On Jan. 10, America West will end its two-year stay in Billings by canceling three daily nonstops to Phoenix and Las Vegas.

Despite losing 1,650 seats per week, Billings has good air service for its size, Putnam said.

"Seven airlines still offer an average of 12,338 outbound seats per week," he said.

To extend the red-carpet-on-the-runway treatment, a delegation of four Billings officials flew to Phoenix on Thursday for a two-hour meeting with four America West executives.

The meeting went well, although no promises were made, said John Brewer, president of the Billings Area Chamber of Commerce.

Airline executives said the merger with US Airways means all the flights will be re-evaluated. Computer models show flying to Billings just isn't profitable right now.

"When and if fuel prices come down and they get back into a growth mode of looking at new markets, we'll be back on their radar screen," Brewer said.

He thinks market conditions might change in 12 to 18 months.

Outgoing Mayor Chuck Tooley, Yellowstone County Commission Chairman John Ostlund and Big Sky Economic Development Authority Executive Director Joe McClure flew to Phoenix with Brewer.

Those four, Putnam, and Billings Gazette Publisher Mike Gulledge, serve on an informal committee to try to improve Billings' air service.

More airline seats help economic development, Brewer said. The group plans on meeting with the other airlines serving Billings in coming months.

America West decided to pull out of Billings, Fargo, N.D., and Sioux Falls, S.D, and cut service to Spokane in late October.

In Billings, the day after America West announced its pullout, Delta decided to cut two flights and Frontier Airlines announced its usual leaner winter schedule.

Lack of communication may spell a business opportunity, Putnam said.

"That all happened in a 72-hour period, and not one of them had talked to the other," he said. "So they may have cut more service than they should."

As senior vice president for KOA of America properties, Shane Ott logs about 100,000 airline miles each year. He used to be loyal to Delta (and its affiliates Skywest and Atlantic Southeast) and enjoyed the first-class upgrades of a top customer.

"I'm now prone to choosing any airline that gets me there quicker," Ott said, "I give up a lot. I give up first class."

Ticket prices out of Billings tend to be high anyway, and costs have gone up significantly in recent years, he said, especially since he flies on short notice. His tickets usually run $1,000 and have topped $3,000 for a multiple city flight.

"Twenty years ago, flying was fun. Today, it's not fun. It's work. It's effort," he said. "If you don't accept that, you're going to be miserable."

Putnam said that for a sparsely populated, rural area, Billings has more flying choices than other airports around the country.

Boardings in Billings over the past four years, including the Sept. 11 terrorist attacks, which shut down all air travel for three days and slowed the nation's economy, are up.

"We had 53,000 more or a 16 percent increase in boardings in four years," he said. "That's pretty healthy growth."

Five years ago, filling an average of 60 percent of seats on flights turned a profit.

"Today's established break point is in excess of 70 percent. We're not sure exactly where," Putnam said.

Are there future cutbacks or more flights coming?

Delta has promised a bankruptcy court it would cut $3 billion from its total operations next year.

Spokeswoman Jennifer Bagdade in Minneapolis said Northwest's schedule of two daily flights to Billings is set through March.

"After that, our entire schedule is under review," she said.

United Airlines is keeping its three daily flights between Denver and Billings, according to spokesman Jeff Green in Chicago.

More than a year ago, the second-largest U.S. airline decreased its capacity by moving its biggest planes to more profitable overseas routes.

"We increased our international growth 15 percent while reducing overall capacity by 3 percent," Green said.

Montana, with a population of less than 1 million, may have lost some major flights, but it is too simplistic to say air service has declined.

Brian Sprenger, assistant director at Gallatin Field Airport in Belgrade, agrees with Putnam that for their size, Montana cities have good air connections.

This airport serving Bozeman and southwestern Montana expects to have 20,000 to 30,000 fewer overall airline seats in 2006 than two years ago.

However, Delta now is using regional jets in Bozeman which offer more capacity.

"We have way more Delta seats today than four years ago," he said. "By January, we will have logged 13,000 Delta seats, so we have 2,300 more seats than in 2001 before Sept. 11."

Airline consolidation is simple economics.

"Fuel costs have gotten so out of hand. They have to fill the airplanes up, and there are too many planes to fill up," Sprenger said.

The trend is improving, though.

This month, jet fuel costs have come down dramatically.

They topped out on Oct. 5 at $3.13 per gallon, according to Reuters News Service. Prices at mid-month were $1.81 per gallon.

Despite the improvement, jet fuel still costs double what it did two years ago.

High prices to fly from Montana are a big beef with consumers who dream of landing a discount airline with really cheap fares.

Southwest Airlines says it needs a million passengers a year per market.

So, it only serves the top 100 out of 553 airports in the U.S. and its territories.

To attract a Southwest, Sprenger said, travelers from across Montana would have to band together and fly out of one airport.

Again, many factors affect airline service.

In Eugene, Ore., the airport serves a population of 191,000, including nearby Springfield. Marketing Manager Steve Thomas said airlines now are looking at the yield, or the profit, of the flight, not just the seats filled.

"In the past, we've had big planes pulled out of our market when we had 92 percent occupancy," Thomas said. "They felt they could get a higher yield out of other cities."

For Putnam, who is logging his 28th year as the city's aviation director, airline pullouts are nothing new.

"I've been here through two with Big Sky -- at least two of them -- and I've lost track with Frontier," Putnam said.

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