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"Manchester-Boston Airport's growth slows"

Sunday, December 17, 2006

Airport's growth slows  
The Manchester (NH) Monitor

It started out a tough year for Manchester-Boston Regional Airport, and it
will end with an only slightly better forecast for the year to come. 

Industry-wide airline cutbacks have put a damper on the number of passengers
flying in and out of Manchester for the first time in recent years, and talk
of airline mergers in the near future could further stall its growth.
Airport Director Kevin Dillon said the plan for the coming year at
Manchester-Boston Regional Airport is to keep an eye on merger proposals and
continue promoting the airport as a convenient regional hub that is a
gateway to the Boston area. 

As small- and medium-sized airports throughout the country continue to
struggle with declining passenger numbers due to airline cutbacks and
pending mergers, Manchester airport is fighting the trend by ramping up
efforts to entice Boston-bound flyers from other parts of the country and
touting better customer service than Boston's own Logan Airport, Dillon

"I think this is a shake-out going on in the aviation industry," Dillon
said. "I think there continues to be hurdles to get over as airlines talk
about further consolidation and mergers that could also lead to a reduction
in service levels and seats." 

The good news, he said, is that even if Manchester sees a second year of
slowed growth in 2007, that trend likely won't last in the long-term. A
strong New Hampshire economy, high demand for an easy-access local airport
and a growing population with disposable income will likely keep the market
strong, Dillon and state economic experts say. 
"There is nothing that has changed dramatically for Manchester," said Robert
Shumsky, an associate professor at Dartmouth's Tuck School of Business who
studies airline operations. "The population is still there, the demand is
more or less still there. I think they'll hold steady and slowly increase." 

A study conducted by the New England Airport Coalition this fall predicted
that Manchester airport will see between 3.3 percent and 5.5 percent average
annual growth over the next decade. 

The shake-out 

In 2006, Manchester airport is on track to see a roughly 10 percent drop in
the number of passengers for the first time after more than five years of
steady growth, Dillon said. Through the end of November, the airport had
served 3.6 million passengers compared to 4 million through the end of
November in 2005 - a 10.2 percent dip, according to Assistant Airport
Director J. Brian O'Neill. 

Manchester isn't alone. 

Other small and medium-sized airports around New England have seen drops
this year in passenger numbers as well. At T.F. Green Airport near
Providence, R.I., passenger numbers are down 9.5 percent from 4.4 million at
the end of October this year compared to 4.9 million at the end of October
last year. 

Portland International Jetport in Maine will end the year with roughly 1.4
million passengers compared to 1.46 million last year - a slight overall dip
despite adding the popular low-cost carrier JetBlue in May, which caused
monthly passenger total to surge since then, said spokesman Greg Hughes. 

The economic trouble airlines are facing is a result of post-Sept. 11
bankruptcies and the soaring cost of jet fuel, Shumsky said. At the same
time operating costs have grown substantially, the price of tickets has not
kept pace - especially with rising competition from low-cost airlines like
Southwest and JetBlue, he said. 

Airlines struggling to stay afloat in the past two years have cut the number
of flights and replaced large jets with smaller ones to save money. That
has, in turn, reduced the number of available seats and made it tough for
airports to draw the same annual passenger traffic. 

Those changes have hit smaller airports particularly hard because airlines
have kept the best service at the larger airports where they can get more
bang for their buck, Dillon said. 

At the beginning of the year, the airport faced a 20 percent reduction in
flight capacity due to cuts made in late 2005 by several major carriers.
U.S. Airways merged with America West, first sending smaller flights from
Manchester to Pittsburgh, then cutting those flights altogether. 

Delta once offered 142-seat flights to Cincinnati and Atlanta, but those
flights have been downsized to 70-seat regional jets. And Southwest cut the
two daily flights it once offered from Manchester to Nashville. 

But a few airlines have rebounded since then. 

Delta added four daily flights from Manchester to John F. Kennedy
International Airport in New York City in September. Then Southwest
announced at the end of November that it will be adding five daily roundtrip
flights to Orlando and six daily roundtrip flights to Philadelphia beginning
March 11. 

Increasing the number of available seats by adding more flights out of
Manchester will hopefully level out declining passenger numbers and even
mean some increases again by the end of 2007, Dillon said. 

Pending airline mergers could prove to be the wild card in that equation. 

Airlines are talking about mergers to further save money or buy up their
competition. The most recent merger talks have been between U.S. Airways and
Delta. If airlines merge, it could mean even further reductions in the
number and size of flights for airports like Manchester, Dillon and Shumsky

Shumsky said he thinks mergers are far from inevitable. They are complicated
business deals that are generally met with dismay in the industry. 

Airlines may have been able to save enough money by making cuts this year to
make mergers unnecessary, he said. 

Bouncing back 

In the meantime, New England airports like Manchester and T.F. Green are
working to boost traveler traffic by improving amenities, as well as making
it easier to get to and from the airport. 

At T.F. Green, construction started this year on an $83 million facility
connected to the airport by a moving sidewalk that will be a catch-all
transportation hub with rental cars, bus service, and MBTA commuter rail
access, said spokeswoman Patti Goldstein. 

Manchester has launched an aggressive national advertising campaign this
year to attract travelers from across the country bound for Boston. 

In April, the airport changed its name to include Boston in the title - a
move that will help put the airport on the map for travelers in other parts
of the United States who most likely know where Boston is but have never
heard of Manchester, Dillon said. Then in November, the airport rolled out a
free bus service to the Anderson Regional Transportation Center in Woburn,
Mass., and the Sullivan Square subway station just outside Boston. 

More national advertising, especially on the internet, will be a goal for
the coming year, Dillon said. 

"I don't think there's too many people in the New England states who haven't
heard of Manchester airport," Dillon said. "Now we've started to turn our
attention to national marketing. It's more directed toward the guy in
Albuquerque who is now going to use Manchester as a gateway to access the
Boston metro area." 

The airport also began offering free wireless internet and put in a new
Fisher-Price play area in the terminal for parents traveling with small
children. Dillon said it's too early to tell if changing the name of the
airport, adding free bus service to Boston and other improvements is
boosting passenger traffic. 

An increase in the number of cargo flights this year - mainly FedEx and UPS
flights - has also been a bright spot for the airport this year, Dillon
said. By the end of November 2005, the airport had handled 140,808,270
pounds of cargo. That is up 13.3 percent for the same period this year, when
the airport had handled 159,502,500 pounds of cargo. 

State Economic Development Director Mike Vlacich said state officials will
be working closely with the airport to make sure the success of the past
decade translate to the next one. 

"It really does serve as one of the great drivers of our economic success,"
Vlacich said. "It's a real asset as we're making the case to businesses
interested in coming to the state. It's one of our real tools."

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