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Small airports can't compete with lower fares of the hubs

Saturday, January 31, 2004

Smaller airports lost 17 percent of their seats through December.
PITTSBURGH (AP) -- Flying round-trip from Johnstown to San Francisco on Feb. 16 and returning six days later could cost $348 on US Airways.
But, then again, somebody could drive west about 70 miles to Pittsburgh International Airport and fly round-trip to San Francisco for $214 -- and it appears many people are.
Ridership at the John Murtha Johnstown-Cambria County Airport is down nearly 50 percent from four years ago and -- while the Sept. 11, 2001, terrorist attacks didn't help the industry -- executives in Johnstown and other smaller airports in Pennsylvania say it's due to faulty airline business models in place long before the attacks.
"The way the airlines have constructed their business models is not to favor spoke airports. They want to attract people to the hub airports because basically it's a unit-cost issue," said Lawrence Krauter, president of the Aviation Council of Pennsylvania, a lobbying group. "They have all of their assets and people at this place and they think if they just add more units [available seats] in there, it's going to become more and more efficient."
As major airlines scramble to compete with discount carriers like JetBlue, they're cutting costs by scaling back commuter services first -- and then charging a premium for them.
Driving to fly
"The add-on fares are atrocious," said Johnstown airport director Joseph McKelvey. "Travelers in this part of Pennsylvania, they're driving to Pittsburgh, they're driving to Baltimore and they're driving to Cleveland to get these low fares."
Through December, nonhub airports lost 17 percent of their available seats compared with December 1998, while larger airports saw a 3-percent cut in available seats, according to a study by the Federal Department of Transportation.
Those tactics are driving passengers away from smaller airports -- and could devastate the capital budget at Arnold Palmer Regional Airport, about 45 miles east of Pittsburgh. The airport closed down its snack bar after just 10,382 people boarded commercial flights there last year, said airport manager Gabe Monzo.
If Latrobe drops below 10,000 passengers it could lose $1 million in federal Airport Improvement Program funds which can be used to for everything from new maintenance trucks to paving.
Four flights a day
The tiny airport offers just four US Airways Express flights a day -- down from nine when it served about 25,000 passengers in 1998 -- and that means not just fewer seats, but fewer seats at choice times of the day.
Despite the troubles of smaller airports across the state, Lehigh Valley saw a 25-percent increase in passengers, from 400,000 in 2002 to 500,000 last year, said Krauter, who is also deputy executive director of that airport.
The increase was largely fueled by regional carrier Southeast Airlines, however, as larger carriers like US Airways continue to charge a premium for connecting flights out of Lehigh Valley. That round-trip shot to San Francisco? It'll cost $634 from Allentown, but $348 from Philadelphia, 52 miles away.
US Airways spokesman David Castelveter said the airline is cutting costs to survive and pricing flights based on what its customers want.
"The buying behavior of our customers has changed. There was a day when a customer was willing to pay a premium for nonstop service, or to pay a premium to fly direct [from a smaller airport] but that's changed," Castelveter said.