Sun Country Leaving Lansing

JetBlueGuy2006 · Wed Jun 24, 2015 10:08 pm

Not necessarily a surprise. A 737 is a large plane to fill on a daily basis.Not necessarily a surprise. A 737 is a large plane to fill on a daily basis.

http://www.lansingstatejournal.com/s...-country-leaving-airport/29183413/

[Edited 2015-06-24 15:15:06]

compensateme · Wed Jun 24, 2015 10:12 pm

Flights have been pulled for quite awhile although this is the first time SY has addressed it. The service existed to serve the MSP-DCA market, but became flexible once SY went nonstop. You could (and probably still can) get perpetual cheap, sub-$200 fares LAN/MSP RT via Priceline on this route.

StrandedAtMKG · Wed Jun 24, 2015 10:34 pm

This route didn't have a prayer, honestly. ACA/Independence flew LAN-IAD briefly a long time ago when they were trying to make it as an independent carrier, and Northwest ate their lunch. Now it's DL's turn to eat SY's lunch.

compensateme · Wed Jun 24, 2015 10:46 pm

Quoting StrandedAtMKG (Reply 2):
This route didn't have a prayer, honestly. ACA/Independence flew LAN-IAD briefly a long time ago when they were trying to make it as an independent carrier, and Northwest ate their lunch. Now it's DL's turn to eat SY's lunch.

DL didn't have to eat SY's lunch. The flights were timed for the MSP/DCA market, not the MSP/LAN or LAN/DCA market; local traffic from LAN/MSP and LAN/DCA is weak and there's few connecting flights.

PSU.DTW.SCE · Wed Jun 24, 2015 11:08 pm

Not to mention, LAN gets squeezed on all sides by airports all with far superior air service - GRR, FNT, and DTW.

FWAERJ · Thu Jun 25, 2015 12:03 am

Quoting DTW.SCE" class="quote" target="_blank">PSU.DTW.SCE (Reply 4):
Not to mention, LAN gets squeezed on all sides by airports all with far superior air service - GRR, FNT, and DTW.

Add FWA just down I-69 for those in the south part of Michigan to the mix as well, with service to 7 legacy hubs and 5 G4 vacation cities. Funny thing is, in the days of DH, LAN was a popular option for those in Fort Wayne. The only thing LAN has going for it now for those in Fort Wayne is the Apple Vacations/AM charters to CUN (the 4O PVR charters, along with charters to MBJ, are gone) - and even then one can still get a nonstop from IND or DTW.

Speaking of G4, they left LAN twice, so I wouldn't bank on G4 being LAN's savior. The first time was when they moved to GRR, and the second (which ended this past January) showed G4 packing up as soon as the incentives dried up. A good reason in both cases: LAN's CPE is in the $32 range - one of the most expensive of any airport in America, big or small. DTW and FWA's CPE are both in the $8-10 range, and GRR is even cheaper at around $5. Unless you can charge a massive fare premium and maintain good yields, as seems to be what the case is with DL and UA, LAN is a money-losing proposition to airlines - especially if you are an LCC or ULCC.

jetlanta · Thu Jun 25, 2015 12:31 am

Quoting FWAERJ (Reply 5):
Speaking of G4, they left LAN twice, so I wouldn't bank on G4 being LAN's savior. The first time was when they moved to GRR, and the second (which ended this past January) showed G4 packing up as soon as the incentives dried up. A good reason in both cases: LAN's CPE is in the $32 range - one of the most expensive of any airport in America, big or small. DTW and FWA's CPE are both in the $8-10 range, and GRR is even cheaper at around $5. Unless you can charge a massive fare premium and maintain good yields, as seems to be what the case is with DL and UA, LAN is a money-losing proposition to airlines - especially if you are an LCC or ULCC.

Where did you get those numbers from? I don't think they are accurate in real world terms.

compensateme · Thu Jun 25, 2015 12:45 am

Quoting FWAERJ (Reply 5):
Speaking of G4, they left LAN twice, so I wouldn't bank on G4 being LAN's savior. The first time was when they moved to GRR, and the second (which ended this past January) showed G4 packing up as soon as the incentives dried up. A good reason in both cases: LAN's CPE is in the $32 range - one of the most expensive of any airport in America, big or small. DTW and FWA's CPE are both in the $8-10 range, and GRR is even cheaper at around $5. Unless you can charge a massive fare premium and maintain good yields, as seems to be what the case is with DL and UA, LAN is a money-losing proposition to airlines - especially if you are an LCC or ULCC.

From memory, LAN collects about $3M annually from airlines -- slightly higher than similar sized airports (but far from your numbers

) but that's because of the debt taken on to fund the FIS as well as the cost to staff it annually. The airport also estimates the lion's share of its leakage to DTW, with smaller amounts split between FNT & GRR.

FWAERJ · Thu Jun 25, 2015 12:49 am

Quoting jetlanta (Reply 6):
Where did you get those numbers from? I don't think they are accurate in real world terms.

It was some old data from a while back, so I looked at the FAA website to get a better, more recent picture. I checked the numbers for LAN and its rivals in 2014 from the FAA CATS site, and here they are from most to least expensive.
LAN: $19.93
DTW: $10.06
GRR: $9.79
FWA: $7.08
FNT: $2.26

LAN may have gone down from that old study, but is still the most expensive in terms of CPE among its peers. LAN is 8.8x(!) more expensive to operate from than FNT, 2.8x that of FWA, 2x that of GRR, and 1.9x more than DTW.

FWAERJ · Thu Jun 25, 2015 12:59 am

Quoting COMPENSATEME (Reply 7):
From memory, LAN collects about $3M annually from airlines -- slightly higher than similar sized airports (but far from your numbers ) but that's because of the debt taken on to fund the FIS as well as the cost to staff it annually.

Similarly-sized RFD has an FIS as well (and of course, has the debt to go with it), and their CPE is $2.74 per pax. SBN (also in the same size category) is currently building one, and last year's CPE at SBN was $6.24.

Truth be told, when you look at RFD and SBN, the FIS is a minor reason at best why LAN has such a high CPE.

UA444 · Thu Jun 25, 2015 1:06 am

I used to live in Lansing and it's difficult to see it suffer. The air fares were completely ludicrous at the time and often found us driving to DTW.

FWAERJ · Thu Jun 25, 2015 1:34 am

Quoting UA444 (Reply 10):
I used to live in Lansing and it's difficult to see it suffer. The air fares were completely ludicrous at the time and often found us driving to DTW.

I feel you about LAN. I will have lived in Fort Wayne for ten years this fall, and I have to admit that the first few years before G4 arrived were rough for an airline buff. C8 had left, IND was having a fare war, and as a result, a huge amount of people drove to IND for lower fares. But it wasn't so much FWA being really high as it was IND's fares being the lowest in the Midwest.

The fares at IND were unsustainable, and after the Great Recession hit and airlines became disciplined about capacity, fares at IND gradually went to sustainable levels close to those at FWA. People started taking fresh looks at FWA, and every year since 2010 has shown passenger increases, with FWA on track to break their all-time record this year.

Of course, IND is getting new routes again, but G4 has been at FWA for eons (IND hasn't impacted G4's FWA service) and much of the new service from the legacies and WN at IND are high-fare routes to business centers. This isn't hurting FWA much, as most non-G4 FWA pax are flying on business and don't want to add the extra driving time to their trips.

Do I want to see a turnaround at LAN? Absolutely - and with the state capital and Michigan State in its backyard, there are good reasons to support one. But with a very high CPE, very limited new airline options, and fierce competition that's a 2.5 hour or less drive on all sides, I have a feeling that things may get worse before they get better. They may have to make do with public charters to G4-type destinations (remember, G4 itself left twice) for growth for a while.

compensateme · Thu Jun 25, 2015 1:45 am

Quoting FWAERJ (Reply 8):
It was some old data from a while back, so I looked at the FAA website to get a better, more recent picture. I checked the numbers for LAN and its rivals in 2014 from the FAA CATS site, and here they are from most to least expensive.
LAN: $19.93
DTW: $10.06
GRR: $9.79
FWA: $7.08
FNT: $2.26

LAN may have gone down from that old study, but is still the most expensive in terms of CPE among its peers. LAN is 8.8x(!) more expensive to operate from than FNT, 2.8x that of FWA, 2x that of GRR, and 1.9x more than DTW.

The problem is the way CPE is being used (calculated) here. A quick & dirty glance at FWA & LAN's financials concludes that both airports collect a similar amount of revenue from the airlines. In other words... LAN is as competitive for an airline to operate into as FWA. FWA has a larger overall revenue stream -- primarily from the onsite maintenance facility and significantly larger tax collections from the locals -- but this isn't being used to reduce the airlines' operating costs. And at the end of the day... that's all they care about.

FWAERJ · Thu Jun 25, 2015 2:12 am

Quoting COMPENSATEME (Reply 12):
A quick & dirty glance at FWA & LAN's financials concludes that both airports collect a similar amount of revenue from the airlines. In other words... LAN is as competitive for an airline to operate into as FWA.

I don't see how it can be the case. This month, FWA has 22 weekday departures on legacies (all 50-seaters) plus 8-10 G4 flights (all A32x or MD-80) on average per week. LAN has a fraction of that: 10 50-seaters plus 1 73G per weekday. Simply put, FWA can get the same amount of revenue as LAN, even with a lower CPE, because many more passengers come into FWA.

Quoting COMPENSATEME (Reply 12):
FWA has a larger overall revenue stream -- primarily from the onsite maintenance facility and significantly larger tax collections from the locals

The tax collections at FWA are larger for a reason: Almost all of the tax collections for FWA are to pay off the remainder of the Kitty Hawk hub bonds, which ain't cheap (when they went bankrupt in 2007, there was over $2 million in debt left to service). The terminal at FWA has been paid for since 2013, the rental car lot improvements were paid entirely by the car rental agencies, and recent jetway upgrades are paid for via PFCs. Come 2020, FWA and taxpayers will no longer be on the hook for the Kitty Hawk bonds, and it could very well be possible that FWA doesn't need a property tax levy for the remainder then.

And I'd wager a guess that the Air National Guard is a much larger revenue stream for FWA than OO is or 9E ever was. FWA also gets a significant amount of revenue from Franklin Electric and (soon) BAE Systems having major complexes on airport-owned land - and there's more waiting to be leased.

freakyrat · Thu Jun 25, 2015 3:00 am

According to surveys and studies done on behalf of corporate aviation at SBN, the FIS when completed will see a lot of use. Also when the FIS was proposed an unnamed airline said that they were interested in offering service from SBN to the Bahamas. Might that be Sun Country? Before the arrival of Allegiant, Sun Country used to do lots of Vegas charters from SBN and now they do a monthly charter to Laughlin. I was just checking an old United timetable before deregulation and mostly all the Westbound DC6 and Viscount flights into SBN originated at DCA or Eastbound flights terminated at DCA. So I'm just curious if SBN-DCA would be profitable now for SY or any other carrier.

compensateme · Thu Jun 25, 2015 3:07 am

Quoting FWAERJ (Reply 14):
I don't see how it can be the case. This month, FWA has 22 weekday departures on legacies (all 50-seaters) plus 8-10 G4 flights (all A32x or MD-80) on average per week. LAN has a fraction of that: 10 50-seaters plus 1 73G per weekday. Simply put, FWA can get the same amount of revenue as LAN, even with a lower CPE, because many more passengers come into FWA.

I only allude to this because earlier you claimed LAN is uncompetitive. To determine the competitiveness, you'd need to weigh the fixed & per-flight operating costs against similar airports of its size. As I pointed out earlier, using a quick & dirty method, it's clear that LAN is more competitive in this regard than the numbers you shared suggest.

Quoting freakyrat (Reply 15):
According to surveys and studies done on behalf of corporate aviation at SBN, the FIS when completed will see a lot of use. Also when the FIS was proposed an unnamed airline said that they were interested in offering service from SBN to the Bahamas. Might that be Sun Country? Before the arrival of Allegiant, Sun Country used to do lots of Vegas charters from SBN and now they do a monthly charter to Laughlin. I was just checking an old United timetable before deregulation and mostly all the Westbound DC6 and Viscount flights into SBN originated at DCA or Eastbound flights terminated at DCA. So I'm just curious if SBN-DCA would be profitable now for SY or any other carrier.

SY was never interested in operating LAN/DCA but did so to provide service from MSP/DCA. Now that SY is able to serve MSP/DCA daily (if it wanted to), there's no reason to operate from any other community.

sunking737 · Thu Jun 25, 2015 3:27 am

LAN was a step into DC, but SY also had charter flights out of LAN to Fla, and Mexico. The charter contract was not renewed so it made sense to end all service in LAN.

compensateme · Thu Jun 25, 2015 12:19 pm

There's bus service between Lansing & DTW for RT$50, with the option to purchase covered parking for $2/day (frequent promotions for families, too; e.g. kids ride free). It takes less than 2 hours to travel from near the MSU campus to the front door at DTW... even factoring in check-in & security, not much longer than arriving at LAN and connecting via DTW...

Quoting sunking737 (Reply 16):
LAN was a step into DC, but SY also had charter flights out of LAN to Fla, and Mexico. The charter contract was not renewed so it made sense to end all service in LAN.

When was the last SY charter flight -- 15 months ago? It's pretty clear that the service existed as a medium for SY to serve MSP/DCA -- boardings between LAN/DCA didn't even justify a regional jet...

liftsifter · Thu Jun 25, 2015 2:51 pm

Quoting JetBlueGuy2006 (Thread starter):
A 737 is a large plane to fill on a daily basis.

I think more than anything, there's no need for a ULCC at an airport like LAN. Filling a 737 might not be a big deal for someone like UA or AA, because they're also incorporating the flight into their massive network, something Sun Country simply doesn't have.

flyinryan99 · Thu Jun 25, 2015 4:38 pm

Great...so the Air-21 slot can go to Southwest to serve an underserved market in DCA-SRQ or something ridiculous. If I were medium sized markets that already have AA and don't have access to DCA, would be trying to think of something out of the box and gear up the political power to obtain this slot.

compensateme · Thu Jun 25, 2015 4:45 pm

Quoting flyinryan99 (Reply 19):
Great...so the Air-21 slot can go to Southwest to serve an underserved market in DCA-SRQ or something ridiculous. If I were medium sized markets that already have AA and don't have access to DCA, would be trying to think of something out of the box and gear up the political power to obtain this slot.

At least people would fly DCA-SRQ...

flyinryan99 · Thu Jun 25, 2015 5:28 pm

Quoting COMPENSATEME (Reply 20):
At least people would fly DCA-SRQ...

People are flying LAN-DCA. Just not enough to justify a 737. If people would fly DCA-SRQ, why isn't it flown now?

Personally...just get rid of all of the restrictions and slots and be done with it. I don't quite think the DOT intended the Air-21 slots to be fore DCA-Florida.

compensateme · Thu Jun 25, 2015 5:33 pm

Quoting flyinryan99 (Reply 21):
People are flying LAN-DCA. Just not enough to justify a 737

Or a CRJ...

msp747 · Thu Jun 25, 2015 5:45 pm

So does SY have to give the slot up? Or can they use it to add another DCA-MSP flight?

Quoting flyinryan99 (Reply 21):
People are flying LAN-DCA. Just not enough to justify a 737.

Like others have mentioned, I'd be willing to bet most of the passengers who use this flight are price sensitive customers/leisure travelers who want to fly between MSP and DCA who are willing to tolerate a brief stop. I'm guessing the fact that they have a direct flight now made the LAN stop even less desirable

JetBlueGuy2006 · Thu Jun 25, 2015 5:48 pm

Quoting msp747 (Reply 23):
So does SY have to give the slot up? Or can they use it to add another DCA-MSP flight?

I don't believe they can, I believe it is a slot specifically for smaller communities...so they will either find another airport to route through or have to return it.

iflycanadian · Thu Jun 25, 2015 11:33 pm

Can someone please explain: What does CPE mean?

FWAERJ · Fri Jun 26, 2015 12:27 am

Quoting iflycanadian (Reply 25):

Can someone please explain: What does CPE mean?

Cost per enplanement.

It's the average cost for an airline of using an airport on a per-passenger basis based on an airport's projected volume for a year, barring any incentives or subsidies.

compensateme · Fri Jun 26, 2015 11:49 am

Quoting FWAERJ (Reply 26):
Cost per enplanement. It's the average cost for an airline of using an airport on a per-passenger basis based on an airport's projected volume for a year, barring any incentives or subsidies.

Yes, classic CPE = what airlines paid less rebates / enplanements... but CPE is kinda like gluten-free foods: it has its use but most people changing their diet to it don't know what it really is..

Here's the problem with CPE: when DL re-flows traffic from DTW to ATL, DTW's CPE goes up and ATL's goes down. So naturally, DL begins to pressure DTW to lower its CPE (e.g. DTW attempted to sharply hike its parking fees, and initiate a steep Spirit-like "use fee" on off-site parking shuttle busses) and meanwhile at ATL, politicians use the low CPE figure to justify further expansion. But the real question is... how much of a loss (gain) in revenue from the per-flight fees cause each respective airport to raise (lower) them the following years? Not a whole lot... most of the change is just on paper.

Likewise, Allegiant having success at an airport will cause its CPE to drop... but that doesn't necessarily/always mean the increased revenue's going to be used to give every single airline a steep reduction in fees (depends on the fee structure). Like I said... you really have to determine the fixed (if any) and per-flight fees charged to determine the true competitiveness.

I agree LAN costs slightly more to operate from, mainly a derivative of the staffing of the FIS facility, but it's still competitive. (RFD, BTW, benefits from being a hub for UPS. Even low fees haven't sustained service.)

FlyPNS1 · Fri Jun 26, 2015 2:28 pm

Quoting JetBlueGuy2006 (Reply 24):
I don't believe they can, I believe it is a slot specifically for smaller communities...so they will either find another airport to route through or have to return it.

Actually, SY can't just arbitrarily move it to another small community. These slots are community specific, so if SY tries to move the slot (even to another small community), it would trigger another competitive bid process through the DOT. I can see SY just letting the slot go as they don't have the right equipment or market penetration to serve a small market from DCA.

The more interesting question is to see who picks up the slot....WN, B6 or AA are the most likely candidates.

KGRB · Fri Jun 26, 2015 3:28 pm

Quoting flyinryan99 (Reply 19):
Great...so the Air-21 slot can go to Southwest to serve an underserved market in DCA-SRQ or something ridiculous.

Quoting COMPENSATEME (Reply 20):
At least people would fly DCA-SRQ...

Quoting flyinryan99 (Reply 21):
If people would fly DCA-SRQ, why isn't it flown now?

Just for the record, DCA-SRQ is flown daily by AA/US with an Air Wisconsin CRJ-200.

FlyPNS1 · Fri Jun 26, 2015 3:40 pm

Quoting flyinryan99 (Reply 19):
If I were medium sized markets that already have AA and don't have access to DCA,

I'm not sure there exists any medium markets (within the perimeter) that don't already have access to DCA, so there's really no fight there. At this point, the only markets (again within the perimeter) that don't have DCA access are all qualified as small.

crazytoaster · Fri Jun 26, 2015 5:59 pm

Quoting FlyPNS1 (Reply 28):
The more interesting question is to see who picks up the slot....WN, B6 or AA are the most likely candidates.

So if it goes to bid, is it only for the specific route (DCA-LAN)? Or any small community.

WN, B6, AA all do not serve LAN currently and doubt they would just for DCA.

sdoyon · Fri Jun 26, 2015 6:07 pm

If DCA-JAN is any example, if an airline vacates the slot, any airline can bid to take over that slot. In the DCA-JAN case, DL vacated and: US bid for DCA-JAN (continuation), WN bid for DCA-OKC, and F9 bid for DCA-SDF, with US winning the right to continue service. I don't see why this would be any different, except for the players involved.

FlyPNS1 · Fri Jun 26, 2015 6:09 pm

Quoting crazytoaster (Reply 31):
So if it goes to bid, is it only for the specific route (DCA-LAN)? Or any small community.

It could be used for any small community, so B6/WN/AA would not be required to serve the LAN-DCA market. However, the DOT has favored maintaining service to a community, but it's not required.

I agree that B6/WN/AA would not likely bid on LAN-DCA and would likely chooser more viable markets.

crazytoaster · Fri Jun 26, 2015 6:35 pm

Quoting FlyPNS1 (Reply 33):

Quoting sdoyon (Reply 32):

Great thanks both of you! I find DCA slots to be very interesting as I posted a thread about DL serving DCA - LEX/MSN/OMA. I guess DL could bid on LAN-DCA and it would make some sense

ridgid727 · Fri Jun 26, 2015 11:38 pm

At the time they are issued they are community specific, but as a slot opens, any airline can place their bid in preference for city pairs, and it will assigned to those city pairs, should they be awarded the slot.

[Edited 2015-06-26 16:40:23]

rtalk25 · Sat Jun 27, 2015 12:09 am

Quoting sdoyon (Reply 32):
WN bid for DCA-OKC

I wonder if WN would bid for DCA-OKC again.

AA last time bid for ISP-DCA as this was a route that was cut when US had to divest slot pairs. I think that would be interesting if WN bid for that one. It might be good for a north route for DCA from WN, since WN can connect traffic through and help DCA load factors on other flights. e.g. ISP-DCA-MDW or ISP-DCA-DAL. WN could just move one BWI flight over to DCA if it doesn't want to add capacity really.

The DOT would likely favor WN or B6 since it views highly on the LCCs over AA (largest slot holder anyways) or DL (second largest slot holder).

[Edited 2015-06-26 17:11:11]

ridgid727 · Sat Jun 27, 2015 1:36 am

Quoting rtalk25 (Reply 36):
The DOT would likely favor WN or B6 since it views highly on the LCCs over AA (largest slot holder anyways) or DL (second largest slot holder).

The DOT would favor any airline like Virgin America, Hawaiian, Alaska, over AA, WN UA or DL.

flyiguy · Sun Jun 28, 2015 5:06 am

I'm pretty sure this is the slot that WN is already going to use to operate DCA-MCO making it 45 daily flights for WN from DCA.

FLY

mariner · Sun Jun 28, 2015 5:15 am

Quoting flyiguy (Reply 38):
I'm pretty sure this is the slot that WN is already going to use to operate DCA-MCO making it 45 daily flights for WN from DCA.

How did Southwest get the LAN-DCA slots from Sun Country?

It's my understanding that these particular slots can't be bought or sold - although they can be acquired by merger, as Republic showed, and took the DOT to court to establish that.

I thought they had to go back up for bid, and that they were limited to smaller cities. I could be wrong, but that's how it used to be.

mariner

[Edited 2015-06-27 22:17:07]

rtalk25 · Mon Jun 29, 2015 1:48 am

Quoting ridgid727 (Reply 37):
The DOT would favor any airline like Virgin America, Hawaiian, Alaska,

I excluded those airlines because I didn't think those carriers would even bid for in perimeter AIR21 slots for DCA, given that they are west coast based airlines that just have DCA as a spoke. But maybe VX would do something surprising.

[Edited 2015-06-28 18:49:18]

billreid · Mon Jun 29, 2015 2:32 am

Quoting COMPENSATEME (Reply 12):
The problem is the way CPE is being used (calculated) here. A quick & dirty glance at FWA & LAN's financials concludes that both airports collect a similar amount of revenue from the airlines. In other words... LAN is as competitive for an airline to operate into as FWA. FWA has a larger overall revenue stream -- primarily from the onsite maintenance facility and significantly larger tax collections from the locals -- but this isn't being used to reduce the airlines' operating costs. And at the end of the day... that's all they care about.

If you look at the data you will find that the CPE is the funds collected from the airlines divided by the passengers enplaned.
Under your premise that a similar amount collected. Revenues from other sources reduce CPE through having other sources of income. This is the advantage of building a more diverse business model.
LAN is an airport that has very high cost per enplanement. It is comparative to EWR, MIA, JFK for costs with a highly different demand basis. LAN is not a critical destination whereas NYC is, MIA is.
If LAN wanted to be competitive it would need to reduce its costs by $10 per passenger. At the end of the day why would airlines be interested in paying an extra $10 per passenger when they do not have to at nearby airports?

The position of LAN is the same idiotic argument used by MLB and SRQ in Florida. SRQ has a CPE of $12.34 while PIE has a CPE of $1.93 and TPA has a CPE of just over $5.00. What does an airline get for the extra $10?

compensateme · Mon Jun 29, 2015 12:28 pm

Quoting billreid (Reply 41):
If you look at the data you will find that the CPE is the funds collected from the airlines divided by the passengers enplaned.Under your premise that a similar amount collected. Revenues from other sources reduce CPE through having other sources of income. This is the advantage of building a more diverse business model.LAN is an airport that has very high cost per enplanement. It is comparative to EWR, MIA, JFK for costs with a highly different demand basis. LAN is not a critical destination whereas NYC is, MIA is.If LAN wanted to be competitive it would need to reduce its costs by $10 per passenger. At the end of the day why would airlines be interested in paying an extra $10 per passenger when they do not have to at nearby airports?The position of LAN is the same idiotic argument used by MLB and SRQ in Florida. SRQ has a CPE of $12.34 while PIE has a CPE of $1.93 and TPA has a CPE of just over $5.00. What does an airline get for the extra $10?

CPE is one of the most misused statistics and you're illustrating why,

Smaller airports traditionally have higher CPE, since there's fewer passengers to spread costs amongst. But smaller airports also typically have higher average airfares, which offset the slightly higher per-passenger CPE. Take it into context: if Allegiant had been successful at LAN, LAN would have a lower overall CPE, but DL & UA's CPE wouldn't be much lower -- Allegiant's would be bringing the average down, but it would also have significantly lower per passenger revenues. You need to take CPE into context.

No doubt LAN has slightly higher than average cost -- the FIS is a total disaster to its bottom line, costing more per year to operate than all revenues collected from airlines combined -- but its costs are still competitive.

flyinryan99 · Mon Jun 29, 2015 2:40 pm

Quoting FlyPNS1 (Reply 30):
I'm not sure there exists any medium markets (within the perimeter) that don't already have access to DCA, so there's really no fight there. At this point, the only markets (again within the perimeter) that don't have DCA access are all qualified as small.

I don't necessarily agree with it. You still have markets like GRR or FWA or AZO or FNT that doesn't have access to DCA that *theoretically* could qualify for this slot. Some may argue that it will serve more people to fly a Florida-DCA route than it would one of these markets, but in my opinion, it goes against the principals of why these slots were created.

FlyPNS1 · Mon Jun 29, 2015 4:27 pm

Quoting flyinryan99 (Reply 43):
You still have markets like GRR or FWA or AZO or FNT that doesn't have access to DCA that *theoretically* could qualify for this slot.

Those markets would all qualify as they are all small markets by FAA definition, so they are totally eligible. However, I doubt any of the LCC's would launch those markets (except for maybe GRR) to DCA. The only carrier that could make FWA-DCA, AZO-DCA or FNT-DCA work is AA and even that would be questionable.

However, US tended to lose a lot of these DCA slot battles in the past because they sit on so many existing slots and often waste some of the slots they have. If AA were to propose LAN-DCA, they'd have a good shot at winning simply because the DOT prefers to maintain service continuity. However, if US proposes something different, the odds of winning drops.

billreid · Mon Jun 29, 2015 6:00 pm

Quoting COMPENSATEME (Reply 42):
Smaller airports traditionally have higher CPE, since there's fewer passengers to spread costs amongst. But smaller airports also typically have higher average airfares, which offset the slightly higher per-passenger CPE. Take it into context: if Allegiant had been successful at LAN, LAN would have a lower overall CPE, but DL & UA's CPE wouldn't be much lower -- Allegiant's would be bringing the average down, but it would also have significantly lower per passenger revenues. You need to take CPE into context.

Where in heavens name do you get your numbers?
The smaller airports traditionally have a much lower CPE. The reason is the airlines DON'T have to serve those markets. Smaller airports HAVE to be competitive.
Airports like PGD doesn't charge either a landing or terminal fee. So where does that leave LAN?

NYC has the three highest costing airports in the USA. MIA is right at the Top. LAX is way up there, SFO is up there. ATL, and DFW are low.

$19 is a joke and the reason airline service is so dreadful!

enilria · Mon Jun 29, 2015 6:07 pm

Quoting billreid (Reply 45):
Quoting COMPENSATEME (Reply 42):
Smaller airports traditionally have higher CPE

Where in heavens name do you get your numbers?

I would say that is only true where they built a new terminal and only have 1 dozen or less flights. That certainly has happened in many places, but it is not typical.

compensateme · Mon Jun 29, 2015 6:17 pm

Quoting billreid (Reply 45):
Where in heavens name do you get your numbers?
The smaller airports traditionally have a much lower CPE. The reason is the airlines DON'T have to serve those markets. Smaller airports HAVE to be competitive.
Airports like PGD doesn't charge either a landing or terminal fee. So where does that leave LAN?

NYC has the three highest costing airports in the USA. MIA is right at the Top. LAX is way up there, SFO is up there. ATL, and DFW are low.

$19 is a joke and the reason airline service is so dreadful!

You're mistakenly under the assumption that airlines write a check to the airport for the CPE amount. That's not the case.

And the numbers posted earlier appear to be inaccurate.

n7371f · Tue Jun 30, 2015 3:35 am

Quoting mariner (Reply 39):
How did Southwest get the LAN-DCA slots from Sun Country?

It's my understanding that these particular slots can't be bought or sold - although they can be acquired by merger, as Republic showed, and took the DOT to court to establish that.

I thought they had to go back up for bid, and that they were limited to smaller cities. I could be wrong, but that's how it used to be.

mariner

Because it's Southwest, the low-fare airline in the eyes of the DOT?

mariner · Tue Jun 30, 2015 4:30 am

Quoting n7371f (Reply 48):
Because it's Southwest, the low-fare airline in the eyes of the DOT?

There still has to be a process - a public process.

mariner

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