It started out as 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-size airports throughout the country continue to struggle with declining passenger numbers because of 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 said.
“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 Manchester airport will see between 3.3 percent and 5.5 percent average annual growth over the next decade.
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-size 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 totals to surge since then, spokesman Greg Hughes said.
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 such as Southwest and JetBlue, he said.
Airlines struggling to stay afloat in the last 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 because of 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 it will add five daily roundtrip flights to Orlando and six daily roundtrip flights to Philadelphia beginning March 11.
It’s hoped increasing the number of available seats by adding more flights out of Manchester will 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 such as Manchester, Dillon and Shumsky said.
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.
In the meantime, New England airports such as 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, spokeswoman Patti Goldstein said.
Manchester 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 – 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 last decade translates 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.”