"Smaller airports at the mercy of hub airlines"

Sunday, December 19, 2004

Making due as airline flies
By Thomas Olson
The Pittsburgh (PA) Tribune-Review


US Airways abandoned Reading Regional Airport on Sept. 4, leaving it without
commercial flights for the first time since 1941. 

The airline also pulled out of Arnold Palmer Regional Airport, on July 15.
But airport managers were successful in attracting a replacement --
Northwest Airlines -- which will begin service at the Latrobe airport on
April 4, with three daily flights to Detroit and connections galore. 

The two contrasting cases show how well -- or poorly -- smaller airports are
adapting to US Airways' move to discontinue service. 

Since July, the bankrupt airline has halted direct flights from two dozen
smaller cities in the Northeast to its former hub at Pittsburgh
International Airport as it abandons service to small markets altogether. 

"In some cases, an airport that's dependent on one carrier is a good enough
market to attract other carriers," said Kurt Forsgren, an airport analyst
for Standard & Poor's Corp. in Boston. 

But some smaller city markets are not attractive enough. 

US Airways had been the only airline serving Arnold Palmer Region Airport in
Westmoreland County since 1985. The carrier provided as many as eight daily
flights to Pittsburgh until 2001. But US Airways scaled down to three a day
by 2004, and ceased Latrobe service altogether as of July 15. 

"We were talking to other airlines before US Airways announced they were
terminating service," said Gene Lakin, executive director of the
Westmoreland County Airport Authority. "But the pressure was put on after US
Airways said they'd pull out." 

By Nov. 22, a little more than four months later, the authority had a signed
deal with Northwest to start three daily flights to the Detroit hub. It will
deploy larger, 34-seat, Saab aircraft for the Detroit trips, versus the
19-seat Beeches that US Airways Express had used. 

"There's more headroom, a restroom and flight-attendant service," said
Lakin. "None of which came with US Airways flights." 

Lakin also said Northwest's roughly 600 connecting flights in Detroit will
amply benefit local business travelers. Pledges by local companies to steer
about 22,000 passengers a year to Northwest, along with some $700,000 in
federal and local subsidies, sealed the airport's deal with Northwest, he
said. 

Until April 4, however, Latrobe-area travelers must either drive to
Harrisburg, Baltimore or Pittsburgh to board a commercial flight. 

"Our general view is the smaller airports are the ones most affected by
pullbacks by major carriers," said S&P's Forsgren of US Airways'
retrenchment from smaller markets. "For the most part, (smaller airports)
are at the mercy of hub airlines." 

Smaller airports such as Reading Regional Airport, in Berks County, which
had hosted commercial flights since 1941. 

Before Sept. 11, 2001, the airport boasted 18 US Airways flights a day to
Pittsburgh and Philadelphia. But by 2004, commercial service dwindled to
three daily to Pittsburgh only, and then vanished on Sept. 4. 

"We've tried to get in touch with other airlines. But so far, we haven't
been able to get in the door," said John Rinehart, director of the Reading
Regional Airport Authority. 

"Our market size is limited," with a county population of 380,000, he said.
"And we're close to Philadelphia," to which many Reading-area travelers
drove, in order to be able to board a smorgasbord of flights. 

"We were sensing US Airways would pull out for awhile because we knew the
economics here for the airline were not profitable," Rinehart said. 

Rather than just refilling runways and gates, the Reading airport is trying
to leverage other properties. The airport is marketing its 200 acres of
surrounding land to commercial and industrial developers, said Rinehart, and
offering its wastewater treatment facility to a nearby hospital that is set
to open late next year. 

Keeping the Reading airport's lights on these days is a fleet of small jets
operated by Quest Diagnostics, of Teterboro, N.J. The Fortune 500 company
bases 19 six-seat jets at the airport, where it built a new hangar last
year. 

Quest's jets transport blood and other medical test samples from hospitals
and doctors' facilities in 42 cities to its laboratory in Reading about 80
times a night. The company moved its air base from congested Philadelphia
International Airport to the Reading airport in 1995. 

"We got slaughtered trying to get in and out of Philadelphia. Our results
have to be in doctors' offices by 7 or 8 a.m. the next day," said Al Murrer,
director of national logistics/transportation. "Reading works well for us
because it's a small airport that's an easy in-and-out." 

The company, which runs labs in 29 U.S. cities, also has one in Carnegie,
said Murrer. That lab is served by Quest jets based at Allegheny County
Airport. 

Revamped air service at regional airports in Fort Wayne, Ind., and
Huntington, W. Va., illustrate two other positive, post-US Airways
scenarios. 

"We suffered an image problem because we lost service to a major hub
(Pittsburgh), which connected passengers to hundreds of cities a day," said
Larry Salyers, director of Huntington's Tri-State Airport, which lost its
three US Airways flights a day to Pittsburgh on Aug. 8. 

When it cut service to Pittsburgh, US Airways instead added a fourth flight
between Huntington and its hub in Charlotte. The shift away from Pittsburgh
-- which US Airways now calls merely a "focus city" -- resulted in more
passenger boardings at the Huntington airport, Salyers said. 

"People have to fly further out of their way to make hub connections," said
analyst Forsgren about passengers' flights in Huntington and some other
small airports. 

Fort Wayne International Airport, however, is seeing US Airways competitors
add service in the wake of the airline's exit on Sept. 1. 

With US Airways teetering last summer, discounter ATA Airlines initiated
flights between Fort Wayne and Chicago Midway last June. Then, on Nov. 30,
ATA announced it would add service to its Indianapolis hub, too. Now,
instead of paying a walk-up fare of $1,000 to fly to New York and back, for
instance, Fort Wayne passengers can go on ATA for about $400. 

"When (ATA) came in here, American and Continental matched their fares,"
said Larry Thompson, vice president of air service development for the Fort
Wayne-Allen County Airport Authority. 

Prior to ATA's launch at Fort Wayne, area passengers would drive two or more
hours to larger airports in Detroit, Chicago, Indianapolis and Columbus,
Ohio, to fly on low-fare carriers. Thompson estimates Fort Wayne Airport was
losing up to two-thirds of its potential customers -- which it estimates at
900,000 -- to those markets that were served by discounters. But that
leakage is starting to get plugged. 

"We knew the market was here," he said. "We just had to find the right
airline."


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