"Chattanooga Metropolitan Airport fighting to keep service despite airline turmoil"

Saturday, June 14, 2008

Chattanooga Metropolitan Airport fighting to keep service despite airline
turmoil
By Mike Pare 
The Chattanooga (TN) Times

  
After nearly two years of soaring growth, the Chattanooga Metropolitan
Airport may be facing the stiffest headwinds since the Sept. 11, 2001,
terrorist attacks.

Rising fuel prices are hammering the airlines, spurring two carriers to
cancel nonstop service from Chattanooga so far this year. Skybus shut down
in April, and Continental has announced it will end Chattanooga-Houston
flights in September.

Mike Landguth, the airport's president, said no airline's business plan is
based on the nation's unprecedented run-up in fuel prices.

"It's starting to have a huge financial impact on the airlines," he said.

Joseph Schwieterman, a DePaul University transportation professor, said air
travel is in "a rough patch" that could last for years, though the long-term
prospect for industry growth is excellent.

"Skyrocketing oil has stunted growth," he said.

Mary Rhoden of the Tennessee Valley Travel Agency in Chattanooga said the
recent news isn't good for the airport and the industry.

"It's no reflection on the airport or who runs it," she said. "It's purely
the price of oil."

Continental, which came to Chattanooga in October 2005 after receiving more
than $1 million in federal and local incentives, said it plans to shed 11
percent of its mainline seat capacity systemwide starting in September.

Delta Air Lines said it will cut up to 13 percent of its domestic capacity
in the last half of this year. It is not clear what impact this might have
on Chattanooga, where Delta connector airlines fly to the Atlanta and
Cincinnati hubs, airport officials said.

American Airlines, which services Chattanooga through American Eagle, and
United Airlines also have announced major cuts nationally. By slashing
capacity, airlines can save on fuel and labor costs. The carriers also
increase demand and drive up ticket prices by doing so.

A drop in Chattanooga air service is a reversal from the past couple of
years in which the airport has seen extraordinary growth. The airport went
from having four airlines in 2004 to eight carriers before the Skybus and
Continental pull-outs, officials said.

Earlier this month, a USA Today analysis predicted Chattanooga's seat
capacity would grow 7.5 percent from October 2007 to October 2008, but the
figure did not include the Continental reductions.

Area travelers have responded to the new service. In 2007, passenger traffic
at the airport experienced its biggest year-over-year gain since records
have been kept, according to Lovell Field officials.

Total boardings of 307,500 passengers in 2007 were 20.6 percent higher than
the previous year, airport figures show.

"A lot of it is the new service we've introduced," Mr. Landguth said.

The 2007 boardings mark was just 3,704 passengers shy of the record of
311,204 set in 1993, according to the airport.

Ms. Rhoden said she expects Chattanooga's airport to maintain good service.
But, she said, the airport needs to continue to appeal to travelers to use
the service.

"Airlines won't cut service if they're making money," Ms. Rhoden said.

Airport spokeswoman Christina Siebold said its message to local travelers is
that they've already proven they will support more service.

She said Allegiant Air, the low-fare carrier flying nonstops to three
Florida cities, is filling about 90 percent of its seats.

"That's very encouraging," Ms. Siebold said.

Also, Chattanooga airport officials have tried to counter the airlines' woes
by containing the expenses it charges carriers.

In May, airport officials agreed to a new budget that keeps landing fees and
terminal rents for the airlines unchanged from last year.

Also, Mr. Landguth said, the airport started a ground handling operation for
Allegiant, and it will explore options to help all its carriers to keep them
competitive.

Other airports in the region are facing the air service crunch as well.

Mary Margaret Miller of Nashville International Airport said it lost two
nonstops on Continental. Also, Delta has trimmed some service to Salt Lake
City, she said.

The USA Today analysis projected Nashville would lose 5.1 percent of its
seat capacity from October 2007 to October 2008.

Jim Evans, vice president of marketing and air service development for the
Metropolitan Knoxville Airport Authority, said it hasn't seen a big impact
yet in terms of seat capacity.

"We've done some checking with carriers and haven't found any catastrophic
loss of service," he said. "It could all change in a moment's notice."

USA Today estimated Knoxville would have an 8.8 percent drop in seat
capacity, while the decline at the airport in Huntsville, Ala., was
projected at 3.5 percent.

Travelers at the airport, however, are nervous about the future.

Bill Cole of Rhea County, Tenn., said he was at the airport trying to pick
up his daughter, who was flying in from Idaho, but the flight got messed up.

"It's already screwed up," he said. "It will be worse."

Douglas Allegar, of Castle Rock, Wash., said he flies a lot into Chattanooga
for business. He said he hopes airlines don't cut the number of seats so
much that he can't get one when he needs it.

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