"Smaller airliner is sign of the times"

Sunday, September 7, 2003

Smaller airliner is sign of the times
US Airways ends use of bigger jets in Valley, cutting available seats.
By Jeanne Bonner
The Allentown (PA) Morning Call

 
US Airways will eliminate its last mainline jet service at Lehigh Valley
International Airport beginning Monday, significantly reducing the number of
seats the airline flies at the airport. 

US Airways will switch its one daily departure to its hub, Charlotte, from a
120-seat mainline jet to a 50-seat regional jet flown by US Airways Express.
It has no immediate plans to add another departure at LVIA to compensate.

With the Charlotte flight moving to regional jet service, US Airways, once
the airport's largest airline, will fly all of its Lehigh Valley flights on
regional jets operated by US Airways Express. Northwest will become the only
major carrier to fly mainline jets into and out of LVIA. The rest of the
service will be on short-haul regional jets designed to transport passengers
to connecting flights at other airports.

The decision will cut into the airport's revenue and will also reduce the
number of seats available to passengers, especially those looking for
discounted fares. The Charlotte flight is used both by business travelers
going to meetings in the South and by leisure travelers who catch connecting
lights to the Caribbean and Florida.

The move to smaller regional jet service has been a trend in the commercial
airline industry for a long time. The US Airways decision echoes steps
already taken by Delta and United at LVIA. Delta, for example, uses only
regional jets flown by Comair and Atlantic Southeast airlines at LVIA. 

The use of regional jets is widespread throughout US Airways' service. The
airline now flies significantly more regional jets than mainline jets, with
2,169 daily departures on US Airways Express compared to 1,187 daily
departures on US Airways.

But the move at LVIA comes at a time when the airport is looking to expand
its service. It has started several new routes this year and has gained a
new Florida destination airline in Southeast Airlines.

And in July, LVIA finally returned to pre-Sept. 11 passenger levels, after
losing business following the terrorist attacks. The airport flew 89,614
passengers this year in July compared to 89,165 in July of 2001.

''Our hope is US Airways will add another departure to Charlotte soon,''
said airport business development director Susan Kittel.

US Airways has already demoted its daily departures to Pittsburgh to
regional jet service. The airline, which emerged from bankruptcy in March,
saves money on regional jet service because the smaller planes require fewer
crew members to operate and cut down on weight-based landing fees. 

''Over the last year, we have been looking very hard at our system,'' said
US Airways spokeswoman Amy Kudwa. ''We determined the regional jet was the
best size aircraft for LVIA.'' 

On the surface, regional jet service may not appear different to consumers.
They buy tickets from the same carrier and visit the same ticket counter at
the airport to redeem them. And the aircraft often bear the name US Airways
Express even if Allegheny Airlines operates them. 

But the switch potentially reduces the number of discounted seats available.
''If you have fewer seats to fill, the need to discount goes down,'' said
industry analyst John Pincavage, of Pincavage and Associates in Westport,
Conn.

Business travelers, who comprise about 50 percent of the airport's
customers, will probably be hurt less by fewer seats because their companies
are willing to pay the higher ticket prices and hence are not vying for the
smaller number of discounted fares.

''It's the leisure traveler, the grandma and grandpa going to visit
grandkids who won't be able to find a low enough fare,'' said George
Doughty, executive director of the Lehigh-Northampton Airport Authority,
which operates LVIA.

All passengers, however, will feel the pinch of fewer seats to Charlotte.

Some passengers interviewed last week as they checked in for the 7:50 a.m.
Charlotte flight said they were not aware of the change. A few said they may
stop flying out of LVIA altogether.

''It kind of eliminates my whole reason for switching to here from
Philadelphia,'' said John Schaefer of Warrington, Bucks County, who travels
to Charlotte twice a month for the dental management company he works for.

Schaefer, who lives between LVIA and the Philadelphia airport, said flying
from the Lehigh Valley can save him as much as $150 on tickets. But he said
he fears the move to a smaller plane will lead to higher prices because
fewer seats will be available.

Many passengers said the change is just one more inconvenience in traveling
these days.

Greg Harris of Allentown said he can't use his laptop computer on a regional
plane because the seat in front of him is too close.

'' are too small for us larger Americans,'' said Harris, who is tall and
trim. ''They are fine on flights of less than an hour.''

When regional jet service first emerged 10 years ago, some aviation experts,
including airport executive director Doughty, thought the planes would
replace the turbo propeller planes, which are small in size and power. That
would have added seats because regional jets are larger than turbo prop
planes and can fly longer distances.

Instead, the regional jets, which are designed for short flights that
transport passengers to other airports for connecting flights, have often
replaced mainline jet service.

Regional jet service allows cash-strapped airlines to trim costs. And
cutting costs is what the major airlines are all about these days. Three of
the seven airlines that fly regularly out of LVIA have been involved in some
stage of bankruptcy in the last year. And all U.S. airlines have suffered
financially since the terrorist attacks of Sept. 11.

While regional jet service allows airlines to cut costs, it tends to lower
an airport's revenue. Airports make their money from landing fees, parking,
airport concessions and passenger surcharges. 

The regional jets are lighter in weight, which reduces the landing fees the
airport collects. If the airport loses seats, it might mean fewer people are
using the parking lot and buying items at the airport's shops. It also means
fewer people are paying a passenger surcharge.

US Airways maintains hubs in Philadelphia and Pittsburgh. With LVIA so close
to both airports, it is not surprising that the airline has cut back on
service here.

''The airlines will do what they can to support the market,'' said Helene
Becker, an airline analyst with Benchmark Co. '' is a relatively small
market.''

The switch to regional jet services does not automatically mean fewer seats
available. Often, an airline increases departures when it switches to
smaller planes.

US Airways has decided not to go that route but could ultimately decide to
revive service, especially if it finds another carrier is having success
with its old routes and customers. It will still have the most departures at
LVIA, with 11 or 12 daily flights.

US Airways had an average load factor of 75.4 percent in July overall, which
means its planes were three-quarters full. That's about average in the
airline industry.

The airline won't release that information for flights at a specific
airport. But it may end up selling the same number of seats per flight and
simply wind up with far fewer empty seats at LVIA. 

''You can't equate progress with big airplanes,'' said Pincavage, the
industry analyst.

For now, LVIA comes out on bottom by US Airways' decision. 

About 50 US Airways workers stationed here will be affected because of the
switch to regional jet service. Some have chosen to transfer to other
airports, others have chosen to leave the company. 

The affected workers also have the option of becoming US Airways Express
employees but few are expected to transfer because ground crew workers there
earn about $13 an hour, compared to $20 an hour at US Airways. 

''It's something we have seen happen to other stations over the years but
it's still a source of disappointment and a little bit of bitterness,'' said
Stuart Ames, a 30-year US Airways fleet services employee who is also the
union steward. 

US Airways has been flying fewer passengers at LVIA for the last three
years, primarily because it's using smaller planes. In 2000, the airline
flew a total of 410,278 passengers into and out of LVIA on its mainline
service and US Airways Express. In 2002, that number dropped to about
287,000.

The corporate downsizing of larger airlines such as US Airways has created
opportunities nationwide for low-fare carriers. Southeast, a small Largo,
Fla., charter carrier, for example, flew the most passengers into and out of
LVIA in July.

LVIA has taken numerous gambles on smaller, low-fare airlines. Some of those
gambles have paid off; others have failed miserably. Either way, the airport
has diversified its portfolio of carriers.

''A lot of airports are reaching out to lower-fare and new entrant
carriers,'' said Steve Van Beek, senior vice president for policy at the
trade association Airports Council International-North America. ''It makes
you less vulnerable to the dispatch decisions of an individual carrier.''

The smaller, more nimble airlines have had nowhere to go but up. And they
have cushioned the blow as the larger carriers have cut flights and
downsized planes.

''The alternative is to sit here and watch the airport decline,'' Doughty
said.

Doughty has a wish list of airlines he would like to see begin service at
LVIA. That list includes Southwest Airlines, Jet Blue and AirTran. He is
hopeful US Airways' loss will be another airline's gain.


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