Airport holding its own despite economic slump, high fuel prices
Sunday, August 10, 2008
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DAYTON — Dayton International Airport has managed to hang on to most of its air service so far this year, despite the havoc that record fuel prices have caused in the airline industry.
Airport director Iftikhar Ahmad said an advertising campaign that the airport began months ago seems to have given at least a modest boost to discretionary travel from Dayton. And the airport has succeeded in reducing the airlines' operating costs in Dayton by having reduced the carriers' cost per enplanement — their expense for each passenger who boards there — from $14 per passenger in late 2006 to $5.50 now, getting more in line with the region's competing airports.
All that has helped increase passenger boardings in Dayton. The monthly totals are up by about 3 percent in 2008 from the corresponding months in 2007.
"When the load factors are up, the airlines will put flights in," Ahmad said. "They're trying to fly and make money."
In mid-July, Air Canada began twice-daily nonstop flights from Dayton to Toronto, Dayton's first direct international passenger service since Air Canada ended such flights in 2002. In August 2007, AirTran Airways began nonstop service from Dayton to Las Vegas.
But the high fuel prices have already begun to take a toll, as carriers look for flights they can cut to reduce fuel expenses. AirTran pulled the plug on its Dayton-Las Vegas nonstop service in April of this year. Delta Air Lines, which offers 54 departures from Dayton to Atlanta each week, will trim that slightly to 53 in September.
"If you're holding your own and you're not losing flight frequencies — or carriers — you're doing good, there's no question about that," said Richard Gritta, a University of Portland finance professor who specializes in airline industry economics.
But, Ahmad and his colleagues nationwide are bracing for what could be a tough fall, when the air travel season traditionally slows down. Major airlines that have already eliminated some flights and parked fuel-gulping planes are planning to wipe out more flights from their schedules after Labor Day, in response to the high fuel prices. Continental Airlines plans substantial cuts at its Cleveland flight hub.
"We may have some tough times ahead of us," Ahmad said. "We're not made out of steel."
When airlines cut service in a market, the airport suffers losses of fees charged for takeoffs and landings, as well as reduced parking and concessions revenues and drop-offs in passenger facility charges tacked onto ticket prices which pay for runway improvements and other projects.
This past week, management of Orlando International Airport decided to postpone some construction projects, including an overhaul of the main ticket lobbies. The Florida airport's revenue depends heavily on leisure travel, more so than business passenger traffic.
The worst could come later this year for airports if the airlines continue to struggle, said Tom Smith of Airports Council International-North America, a trade association for airports.
"The real brunt will be in October, and then November," Smith said.
Contact this reporter at (937) 225-2242 or
jnolan@DaytonDailyNews.com.
