"Would Harrisburg International Airport suffer if airlines merge?"

Thursday, September 6, 2012

Would Harrisburg International Airport suffer if airlines merge?
By DAN MILLER
The Harrisburg (PA) Patriot-News 
     

It's way too early to know how a merger of American Airlines and US Airways
would affect Harrisburg International Airport. 

If the recent past is any guide, a merger would mean less service for
midstate travelers and less money coming in to the airport. 
    
All HIA can go on is the track record of the three big mergers of the past
five years: Delta and Northwest in 2008, followed by United and Continental
in 2010 and Southwest and AirTran in 2011. 

"Historically, the last three mergers have not been good for airports our
size," HIA spokesman Scott Miller said. 

That's the upshot of an Aug. 8 report on the proposed merger by the American
Antitrust Institute and the Business Travel Coalition. 

"The sacrifice of service to behind-the-hub domestic communities in the name
of driving traffic to larger hubs that serves to improve the global
competitiveness of domestic airlines is a lose-lose situation for many
American consumers," the analysis said. 

However, aviation industry analyst Michael Boyd counters that big mergers
haven't hurt HIA nearly as much as other airports in similarly sized
markets. 

"There's no downside whatsoever to Harrisburg" to a combined American-US
Airways, Boyd said. 

He sees one potential upside: American would revitalize its Chicago hub and
US Airways would keep growing its hub in Charlotte, N.C. A stronger company
would benefit HIA, he said. 

Miller said every merger means a drop in lease payments to HIA landlord and
owner Susquehanna Area Regional Airport Authority. The combined carrier
wouldn't need as much space for ticket counters, offices and gates, and
likely would need fewer employees. 

In general, the three mergers have led to less air service at HIA for the
midstate flying public. But the impact has varied with each merger. 

The midstate lost nonstop service to Minneapolis after Delta swallowed
Northwest. In 2004, Delta and Northwest as separate carriers accounted for
about 432,000 passengers at HIA, 31 percent of the airport's total. Last
year, the new Delta served 324,000 passengers in the midstate, and its share
of HIA's business declined to 25 percent. 

HIA was hardest hit by Southwest acquiring AirTran. In August, Southwest
pulled AirTran out of HIA entirely. It was a huge loss, considering that
AirTran provided nonstop flights to HIA users' top destination, Orlando,
Fla. 

The effect has been softened by the arrival of Frontier Airlines, which
picked up the Harrisburg-Orlando flights and brought in nonstop seasonal
flights to Denver. 

But even the Southwest-AirTran merger had a silver lining for HIA, Boyd
said. No longer a true low-cost airline, Southwest is pushing up fares at
Baltimore-Washington International Airport, and that helps level the playing
field for HIA, Boyd said. 

Miller said the merger doing the least harm to HIA has been the combining of
United and Continental. 

Continental cut daily flights to Newark, N.J.'s international hub from four
to two. But the merger opened up more seats in the United system to Chicago
and Washington, where midstate travelers can just as easily connect to
London and other overseas destinations. 

Miller is hoping for the best. HIA is seeing more air travel to Dallas-Fort
Worth because of the Marcellus Shale natural gas drilling boom, Miller said.


But HIA hasn't had direct flights to Dallas-Fort Worth since American
abandoned the route in 2008 due to high fuel costs. 

Miller speculated a merger could lead to a return of the Dallas-Fort Worth
service because American would have access to larger planes in the US
Airways fleet that would make the route sustainable. 

Boyd disagreed, saying it's more likely United will take advantage of the
increased demand by growing service between here and Houston.

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