MSPNWA wrote:It absolutely is significantly caused by airline mergers. The only question is by how much. These sad stories from smaller airports all across the country are what happens when you allow airlines to consolidate and not have to fight for traffic. Small airports are in a self-defeating spiral largely caused by the airlines. The airlines are content with raising fares and picking off only the cream at the top. This causes more people to flee the small airports and commute to a larger station, repeating the cycle and making the situation worse.
Excuses in the past were that these routes and airports were not economical. Well, the correct answer is that they weren't AS economical. Airlines didn't have to fight for untapped and underserved traffic. They learned that they can force the demand to cater to their desires - a flight at the mega station with a low CASM jet - instead of vice versa. Oil has now been at a sustained low. Many of those routes are surely "economical" again. Are they coming back? Mostly not, more and more are leaving, exposing previous reasons as largely excuses. It's sad. The flying public loses. The big wigs win.
Lower fares there are the ONLY way these airports will see a rebound in traffic, and that means more airlines and more competition fighting for every thin revenue stream they can find. You have this market completely backwards.
All I can say is that, respectfully, I completely disagree and think the above is nearly 100% false.
The very real and very unavoidable dynamics that are causing network airline service to decline at smaller U.S. airports have virtually nothing to do with consolidation - they have virtually everything to do with economic reality.
The cost - both direct operating costs and opportunity cost - of flying small jets to small cities keeps rising. It is certainly true that fuel cost has abated, and that's definitely been a reprieve for markets dependent on small jets, but this has been offset in no small part - if not entirely overwhelmed - by rising maintenance and labor costs in the sector. The smallest commercial aircraft branded in U.S. network airline colors in the U.S. are aging rapidly - most are now over a decade old and some are nearing two or more decades old. This means their day-to-day maintenance costs are rising, and the incremental cost of the next overhaul is becoming progressively larger relative to the value associated with the remaining useful life of the assets. Translation: when an RJ and/or its engines approaches its next heavy overhaul, increasingly it's just parked.
On top of that, labor costs in the U.S. airline industry are rising steadily, and nowhere is this more pronounced or more severe than at small jet operators who are losing pilots left and right as regulatory restrictions on hiring and retirements begin to have their full effect. The market is responding precisely as would be expected - the demand for pilot labor in the U.S. is steadily rising because of secular growth and a tidal wave of retirements, and yet supply is nowhere near enough to keep up. As such, all airlines - and especially traditionally-low-paying small jet operators - are having to increase compensation to attract and retain whatever pilots they can.
And, needless to say, both of these cost elements - maintenance and labor - are having a relatively outsized effect on small jets precisely, and particularly, because the jets are small. It's less of an issue to spread higher maintenance and labor costs over a 150-seat 737 compared with spreading these costs over a 50-seat jet. And so, naturally, airlines are having to retreat from markets that can no longer support the higher direct operating costs and opportunity costs of said small jets.
And, as said, none of this has virtually anything to do with consolidation. The way we know this is that even the airlines that have smaller aircraft and haven't merged are steadily upgauging. JetBlue stopped taking E190s. Spirit is trading out A319s for A321s. Frontier entirely exited its sub-mainline business. And on and on. There are obviously unique factors in these and all other cases, but in general this trend is affecting all airlines - network and non-network, consolidation or no consolidation. Indeed, I stand by my earlier assertion that, if anything, consolidation has likely been a savior - net-net - for at least some incremental small jet capacity into small and mid-size U.S. markets. Absent the revenue-generating and revenue-concentrating potential of the larger networks and hubs of AA, Delta and United, I suspect that the draw-down in small jet capacity by the network carriers to date would have been even more rapid and more severe.
Mainline service is returning to the airport with AA's daily direct flight to DFW being upgauged to the A319.
