WOW Air has discontinued services from Cincinnati’s airport because they didn’t reach desired profit margins. CONTRIBUTED/WOW Air

Rising fuel costs hit airlines as Cincinnati loses carrier

While Cincinnati/Northern Kentucky International Airport’s position as cheapest airport in the region remains secure, the recent loss of WOW Air’s international service still stings — a side effect of the pinch all airlines feel as fuel costs rise.

Iceland-based WOW first launched seasonal low-cost service from CVG in May, with plans to end in October and relaunch early next year. But the company announced this week that it will not resume flights in early 2019.

“There were many contributing factors, but ultimately the route did not achieve the profit targets set,” said Maria Johannsdottir, spokeswoman for WOW.

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Johannsdottir didn’t provide specifics, but local aviation expert Jay Ratliff said it’s “all about fuel prices,” which have increased more than 40 percent this year.

“Every airline in the world is adjusting to one degree or another, and it is why American Airlines stock is at a two-year low,” Ratliff said. “WOW had to discontinue Cincinnati, Cleveland and St. Louis because … rising fuel prices prevented them from making the profit they were after.”

Airlines have been making small changes in recent months to make up for increasing fuel prices. Late last month American Airlines became the fourth airline to increase its checked bag fee. The fees jumped $5 per bag, with equivalent changes seen at Delta, JetBlue and United Airlines. Allegiant’s bags already carried the higher fee.

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“When you start looking at the total number of bags they take in a year, it can help them raise hundreds of millions of dollars,” Ratliff said. “That kind of stuff adds up quickly.”

The airlines have also cut profit forecasts and warned of increasing ticket costs if fuel prices remain high. Ratliff said they can’t raise ticket costs too much, or travelers will become reluctant to fly. Instead, he said, they’ll try to make planes more fuel efficient and add more seats to each aircraft, including building smaller bathrooms and seats with less space.

Low-cost carriers like WOW are better able to deal with rising fuel costs because they often have higher profits in specific markets, have lower employee costs and can move aircraft from smaller regional airports faster than legacy airlines flying through major hubs.

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But demand was not an issue for WOW service in Cincinnati, CVG spokeswoman Mindy Kershner said.

“They served about 40,000 passengers during their few months at CVG, which is great. They had about 90-percent load factor, so the community responded really well,” she said.

CVG’s only other trans-Atlantic flight is serviced by Delta, a legacy carrier that flies from Cincinnati to Paris. While it’s not the low-cost carrier WOW is, customers are able to find deals if they look at the right time and place, Kershner said.

“Midwest cities don’t really have a lot of international service, kind of been under-served for a while,” she said. “CVG was one of the only airports for a while in Ohio, Indiana and Kentucky with direct service to Europe with our Paris flight. … All those other cities are working hard for that international service, like we are, because we believe that demand is there.”

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Though it will lose a low-cost carrier, Cincinnati/Northern Kentucky International Airport’s position as cheapest in the region and among the 20 cheapest airports in the country remains secure. The Department of Transportation rankings are based solely on domestic flights.

Cincinnati is ranked 82 of the top 100 airports in the nation, with 100 being the cheapest. In comparison, Dayton International Airport is ranked 10, with an average fare $117 more than CVG.

Cincinnati recently broke a three-month record of 1.2 million local passengers, which Kershner said has a direct impact on dropping ticket costs.

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