DOT’s continued pursuit of airport congestion pricing schemes is “unconscionable, inconceivable and mind boggling” at a time when skyrocketing fuel costs have cut airline schedules by up to 20 percent and reports have some 100 U.S. communities losing all service by year’s end, Regional Airline Association (RAA) President Roger Cohen told airport officials yesterday.
Speaking at the 80th Annual Meeting of the American Association of Airport Executives (AAAE), Cohen compared DOT’s self-described “modest proposal” of congestion pricing for the New York area airports to the 1729 Jonathon Swift A Modest Proposal essay in which the British author suggested a market based solution to the kingdom’s poverty, famine and overpopulation problems: that poor children be bred to become a staple of the country’s diet.
“What’s really scary is that while Swift’s modest proposal was in jest, written to highlight the government’s wrong-headed approach to serious issues – the DOT policy to pile on communities already being priced out of scheduled service by $160 barrel oil is no joke,” said Cohen. “Just last week, DOT denied requests for a public hearing to further explain how their “modest proposal” of auctioning slots would work.”

Capacity Reductions
Regionals, whose regional jets have been blamed for New York area congestion, will not get too much relief since the New York Times reported that the FAA believes New York area airports will continue to be congested despite the capacity cuts. “Airlines will contract their flying schedules in less-busy cities, which never had much congestion to begin with, and landing slots at busy airports will, for the most part, continue to be fully used, FAA officials say,” said the Times.
“We’re going to see the concentration of large operators at the large airports,” Michael J. Sammartino, director of system operations at the FAA's Strategic Command Center told the Times.
The Times’ Joe Sharkey said that companies are already cutting back travel, according to a recent survey by the Association of Corporate Travel Executives. “Nearly two-thirds said the reduction in airline schedules and service, especially in smaller markets, was adversely limiting their options to meet directly with manufacturers, suppliers and buyers,” said Sharkey, confirming concerns already voiced by regional operators.
Regionals are most bitter about the relative value placed on the needs of business travelers and their home town economies, which will be the most likely victims of congestion pricing, compared to leisure travelers.
“What happens to travelers who need direct service to New York from Louisville, Lexington, Dayton, Birmingham, St. Louis, Oklahoma City and Columbus,” said Pinnacle CEO Phil Trenary recently. “What makes their flights so much less important that the dozens of leisure flights between New York and Florida. You can’t turn your back on these cities. Not all of these towns are Yahooville. We’re talking about communities with over one million population, where there is business growth and where people want to go. If you say you can’t get to New York you are saying the air transportation system does not fit into the nature of what customers want.” Related Story
“Small cities won't be spared,” said reporters Marilyn Adams, Barbara De Lollis and Barbara Hansen in their USA Today analysis. “More than 50 small airports in the Lower 48 states serving places such as Rockford, Ill., and Stockton, Calif., will lose a third or more of the service they had last October as measured by seats on domestic flights. Other midsize airports are seeing double-digit reductions. Kansas City, for example, will have 16 percent less service in October than a year ago, and Tulsa, 13 percent less.
“At least 15 tiny airports such as Merced, Calif., have lost or will lose all of what little air service they had from Mesa Airlines subsidiary Air Midwest, because that small regional carrier is shutting down this month, a casualty of high fuel prices,” they continued. “They are scrambling to replace their service. Many of those small and midsize communities have been served by 50-seat regional jets or even smaller planes, aircraft that generate too little revenue to justify the same service now.”
The report also indicated that “cities in the shadow of larger airline hub airports will suffer disproportionate losses,” citing Oakland losing a fifth of seats compared to October 2007, adding that some carriers have abandoned the market altogether, including Continental. (See related story Continental Announces Details of Capacity Reductions in this issue) The Air Transport Association told the newspaper 60 communities that had some service in 2007, have been eliminated, with another 37 slated for the axe later this year.
The reporters used OAG schedule data to compare October 2008 to October 2007 schedules. “Many of the air-service cutbacks that are publicly known today fall into three broad categories: vacation destinations, secondary airports and RJ service,” said the newspaper. “As fuel prices are hitting certain communities harder than others, they are also battering smaller planes much harder than full-size jets. The grounding of scores of regional jets and other small aircraft will usher in many of this year's air-service cuts. Delta, with the industry's largest fleet of regional jets, plans to park as many as 70 regional jets this year. American, which owns regional carrier American Eagle, will ground about 40.”
USA Today quoted Boyd Group President Michael Boyd as predicting “a panic to unload” 50 seaters since 30 percent of those are losing money. Even so, said USA Today, convenient business routes will also face cuts, such as Washington National to Columbus. “The result will be fewer and less-convenient connections,” it said. “Delta's non-stop RJ flight between Boston and Norfolk, Va., for example, takes less than two hours. Once it's gone, flying between those two cities will mean connecting through New York Kennedy Airport, a trip that will take anywhere from four hours to more than six hours, depending on the layover time in New York.
The newspaper also said many cities will lose frequencies from multiple airlines and cited Kansas City, last year one of the fastest growing markets when it added 16 markets, will be one of the biggest loses since all of its airlines are cutting back there. “Midwest Airlines, for whom Kansas City is a hub, will provide a third less service this October than last October,” noted USA Today. “AirTran Airways, which offered five non-stop flights a week last year from Kansas City to Orlando, is going to one. ExpressJet Airlines is cutting Kansas City service 79 percent. American is abandoning Kansas City to Dallas Love Field, a route where it offered eight regional-jet flights a day.”

Aviation expert Darryl Jenkins called for a fundamental change in the way the airline industry flies and, for passengers, to “radically adjust their thinking on what flying really costs.” Jenkins suggests that of all the bad things that could have, but didn’t, reshape the industry over the past decade, the meteoric rise of fuel is the one that finally will.
“According to the ATA, U.S. airlines are projected to spend $61 billion on fuel this year, $20 billion more than in 2007,” he said. “That's equivalent to the compensation and benefits of 267,000 airline workers or the acquisition of 286 new jets. What's more is that the $20 billion increase is also nearly four times more than the industry has ever earned in a single year; the best year for profits at U.S. passenger and cargo airlines was 1999, with net earnings of $5.3 billion.”
Jenkins predicted it will be increasingly difficult to cover rising fuel costs through ancillary revenues and surcharges since the industry covered only 40 percent of last year’s increases using those methods. “But we're now in a slow economy - with some experts already calling it a full-blown recession,” he said. “Reduced capacity on its own simply will not cut it. Increased fares, fuel surcharges and the painful, but inevitable, unbundling of products and services are needed if our air transport system is to survive. In doing so, they are following in the footsteps of the banking and telecom industries that years ago had the courage to successfully unbundle and charge for products and services.”