Future challenges for non-hub, small hub airports to consider
If there is one thing small airports (non-hubs, small hubs) have experienced over the past five years, it’s a challenge in retaining and recruiting new air service. As you can see from Figure 1.1, the small airports are losing out to medium and large hub airports in terms of new service capacity. This isn’t a complete surprise; four airlines – Delta Air Lines, American, United, and Southwest – now control approximately 85 percent of the domestic seat share in the U.S. These airlines are investing in areas where they receive an optimal share of traffic in larger markets and are less concerned about smaller markets that provide a relatively smaller share of traffic and revenue compared to their larger counterparts.
However, there are still numerous smaller airports that rely and thrive on limited service to a hub airport(s) to get their citizens into the global air service network to travel both domestically and internationally allowing businesses to thrive in their communities. Even as we’ve seen reductions in the non-hub, small hub airports, there is a continued need to service these vibrant communities to ensure their local communities and businesses are supported and that economic development continues to grow in the regions these airports serve.
Why are smaller airports with vibrant communities and opportunities for economic development losing out to growth in medium and large hub airports?
Well, the answer comes down to two basic items: the availability of aircraft to economically serve small airports and the ability of small aircraft operators to fly into smaller airports.
As you can see from Figure 1.2, over the last five years, smaller aircraft departures (defined as 50 seats or less) are down 32.9 percent. Aircraft departures with 51-100 seats are up 24.8 percent. What the industry is experiencing is a shift into larger regional aircraft. This fundamental shift results in fewer smaller communities being able to sustain the frequency of service they have historically supported, if at all. Unfortunately for the small communities at the bottom tier, this trend is expected to continue as small regional aircraft near the end of their life and pressure from the pilot shortage at regional carriers force the retirement of the smallest regional aircraft.
Figure 1.3 indicates the radical change that has been occurring over the past 10 years in the U.S. There has been a continual trend to increase seats per departure in all markets and this trend plays out in the smaller markets. Airport poised for the future should be ready to sacrifice frequency and even destinations to ensure they have connectivity to the global network. In the years to come, this will become even more challenging for small markets that can’t adapt to the larger aircraft.
If you are concerned about how your airport fits into the future economic model, reach out to me or one of our other air service development professionals. We would be more than happy to discuss your options and help build a plan for future success.
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