Tuesday, January 31, 2012

Trends raise concerns for Tri-State Airport/Milton J. Ferguson Field (KHTS), Huntington, West Virginia.

HUNTINGTON -- The Tri-State Airport Authority has heard plenty of good news lately. Revenue has been above budget, with expenses below budget.

Times have been good. But Jerry Brienza, the airport's executive director, gave the board a heads-up Thursday about the future, and, "It's not a very rosy outlook for the airline industry in upcoming years," he said.

The information he shared with the board was gathered at an air service conference late last year, hosted by the air service consulting company Ailevon.

Brienza said small-market airports might be in a particularly bad position because airlines will be reducing the number of smaller jets they use -- such as the ones used at Tri-State Airport -- and replacing them with larger planes.

The industry is still digging itself out of a financial hole, driven by rising fuel costs and lower consumption over the past decade, Brienza said.

Brienza cited an Associated Press article published in November that said, "The little planes that connect America's small cities to the rest of the world are slowly being phased out.

"Airlines are getting rid of these planes - their least-efficient - in response to the high cost of fuel," the AP reported. "Delta, United Continental, and other big airlines are expected to park, scrap or sell hundreds of jets with 50 seats or fewer in coming years. Small propeller planes are meeting the same fate."

Some little cities will have with fewer flights or no flights at all, the report said.

For airlines, it all comes down to spreading fuel costs among passengers, the AP reported. A Delta 50-seat CRJ-200 made by Bombardier takes 19 gallons (72 liters) of fuel to fly each passenger 500 miles (805 kilometers). Fuel usage drops to just 7.5 gallons (28 liters) per passenger on Delta's 160-seat MD-90s over the same distance, the AP said.

So while the bigger jet burns more fuel overall, it's more efficient.

Delta is moving away from small jets more aggressively than other airlines and is expected to eliminate 121 50-seat jets from October 2008 through the end of this year, leaving it with 324.

In the face of this trend, Tri-State Airport must aggressively fight for the carriers that it has -- which are Allegiant Airlines, U.S. Airways and Delta -- and it must seek new carriers, Brienza said. The historic growth that Tri-State Airport has seen in irrelevant at this point, he said.

Some good news for Tri-State is that it has the No. 1 low-cost carrier, which is Allegiant. No. 2 is Spirit Airlines.

"We think we're OK and doing all right, but the fact is the industry is going downhill," he said.

There will be fewer commercial airports in the future -- fewer hubs, fewer routes and fewer flights.

"Someday, we'll have to talk about larger planes and a larger service area," said Bill Dingus, a member of the airport authority and executive director of the Lawrence County Economic Development Corporation.

In other business, the airport has appealed an order from the Department of Environmental Protection to corrective action on a land slip that occurred on the south side of the airport campus after construction from the runway extension project, which was completed last year.

Airport officials believe they have fulfilled the airport's obligations under its permit, and that another party was primarily responsible for the slip. The airport has hired Huddleston Bolen to represent it in the case.

Airport board members also got a report on passenger activity. Marketing Director Beckie McKinkely said that Delta saw a 15 percent increase in enplanements in 2011 over 2010, and U.S. Airways saw an 11 percent increase in 2011 over 2010. Allegiant made a nationwide decision last year to reduce the number of flights offered at its airports, and thus saw a 13 percent decrease in enplanements from 2010, making for an overall decline of 2.5 percent in enplanements for the airlines at Tri-State in 2011 from 2010.

The Airport Authority also approved lease agreements, including increased ramp space for FedEx to accommodate its new B-757 aircraft, and a hangar for Professional Aeronautics Academy, for the purpose of flight training and aircraft rental.

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