Airport Experience News Fall 2022

Helane Becker, a managing director and senior research analyst at investment banking company Cowen , says some of the autumn travel has been “displacement of leisure travel with business and international travel,” a good sign for airlines and airports that serve those passengers. But, she cautions, the economy is 15% bigger than it was in 2019, so it follows that in “normal” circumstances, business travel would have expanded as well. Route Adjustments The summer demand was heartening for an industry walloped by the pandemic, but fault lines were showing during the season and into the fall. Airlines experienced delays and f light cancellations, as well as baggage handling and other issues throughout the summer as they struggled to keep up with demand. At the same time, the long-endured pilot shortage is continuing, causing some carriers to adjust routes. Most notably, legacy carriers are backing away from service to some smaller markets. Small, non-hub airports are vulnerable, airline analysts say, particularly those that rely on the 50-seat regional jets that are slowly being removed from active use. Now, as the third quarter closes, airlines are signaling more moves away from smaller markets. United Airlines , for example, cut 12 routes and eliminated service to four

small airports: Clarksburg and Lewisburg, West Virginia; West Paducah, Kentucky,; and Weyers Cave (Shenandoah Valley), Virginia. United regional partner Skywest Airlines warned back in March about scaling back in these markets and others due to the ongoing pilot shortage. Earlier this year, American Airlines cut three routes and eliminated service to four small airports: Islip and Ithaca, New York; Toledo, Ohio, and Dubuque, Iowa, again due to the pilot shortages. Other carriers are making similar moves, according to airline analyst Robert Mann. Mann says domestic flying among the legacy carriers is not back to 2019 levels in part due to the pilot situation. “They have a limited number of regional carriers they can count on, and that group is still experiencing the most acute pilot shortage, which is limiting their ability to even fly at the levels of operation they had in 2019. “That’s not going to change very much,” he adds. “There may be some restructuring of that business and there may be some acquisition of the regional carriers by major carriers, but that is designed to secure the pilot pipeline rather than the flights. While some small, non-hub airports are vulnerable, small hub airports are thriving as a group. William Swelbar, chief industry analyst at Swelbar-Zhong Consultancy , says small hubs have been “big winners” since 2018. “Over the last five years there’s been no airport group that has enjoyed success like small hubs,” he says, noting that success is especially prevalent in markets serving a high percentage of leisure travelers. When, and to what extent, the more lucrative business travel comes back in full remains a wild card. The airline industry could be getting a bit smaller as well. In addition to the ongoing challenges facing regional carriers, there is at least one potential merger in the works. In July, JetBlue Airways and Spirit Airways announced their intention to merge, painting the deal as “an exciting opportunity to diversify and expand our network.” The deal is now undergoing regulatory scrutiny, and analysts say that’s not just a formality. “I don’t think it’s in any way a done deal,” says Becker. “ It’s two small airlines, so from that perspective, it may be easier to get done than a larger airline buying a smaller airline. But JetBlue has already said they plan to take seats out of the [Spirit] aircraft, reconfigure it

Some of the autumn travel has been “displacement of leisure travel with business and international travel.” — Helane Becker, managing director and senior research analyst at Cowen

June 2022 U.S. Airline Traf c Data

Passenger Enplanements, Domestic & International

-0.1% from previous month

70.9 Million*

16.7% from same month previous year

-9.0% from same month before COVID-19

Source: U.S. Department of Transportation, Bureau of Transportation Statistics * seasonally adjusted

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