Monday, March 26, 2012

Paying more for air travel, getting less: Pressured by soaring costs — mostly for fuel — airlines cut back on the number of flights and seats they offer while raising prices

COLONIE — Albany loses its daily flight to New York's John F. Kennedy International Airport Sunday because the airline that operates it, Delta, said most international travelers from Albany connect through its other hubs in Detroit, Atlanta and Minneapolis.

Delta will shift the flight to LaGuardia, where it's expected to attract Albany travelers heading no farther than New York City.

Albany International Airport officials are sensitive to such changes. Over the past four years, the number of available seats from Albany has fallen by 15 percent, according to data from Airlines for America, the airlines' trade organization.

The number of flights from Albany fell by 4.3 percent over the same period.

So airport officials have been looking for a replacement carrier on the route — but so far without success.

Airlines are reluctant to add flights unless they think they can fill the plane. Most are considering further cutbacks as they struggle to stay profitable in the face of rising fuel prices. A gallon of jet fuel cost 268 percent more in 2011's third quarter than it did in 2000, said Victoria Day, a spokeswoman for Airlines for America.

Cutting capacity and costs accelerated in 2008, when fuel costs jumped just as the economy tanked.

"Airlines reduced a lot of capacity," said Debby McElroy, a spokeswoman for Airports Council International — North America. "They took a hard look at their schedules."

With fewer seats to sell, airlines could raise prices, which they did. Fares have taken off in Albany and elsewhere, and fees for things that used to be free — checked baggage, an aisle seat, snacks — have further boosted the cost of flying.

A federal survey last year showed Albany with the highest average air fare of any major airport in the state.

For Albany airport officials, maintaining current flights is challenge enough. Adding new service, which local business and technology sector leaders want, is even tougher.

"Airlines are in the driver's seat when it comes to air service," McElroy said.

Airport costs — landing fees, terminal rentals — make up 4.5 percent of the cost of an airline's operations, said McElroy. Fuel, by comparison, can be a third of total costs, she said. Other estimates have put it as high as 40 percent.

Albany, classified as a small hub airport, isn't alone in experiencing cutbacks.

Airports Council International found that small hub airports nationwide lost 5.7 percent of their flights and 1.7 percent of their seats over the year ending in March. About the only airports holding their own are major hubs like Chicago O'Hare or Atlanta. On average, they're losing just 1.7 percent of flights and 0.6 percent of seats, according to the Council's figures.

Airlines have been reducing flights and using smaller planes, which are often operated by regional air carriers, on the flights they operate.

A 37-seat Dash 8 turboprop may fly a route once served by a 50-seat Embraer regional jet.

And that leads to other prowblems.

"When things get tight, airlines will cancel that Dash 8 instead of a 737," said Mike Boyd, an airline consultant and former airline executive.

He heads Evergreen, Colo.-based Boyd Group International. He also spent two years in the early 1980s as station manager for Braniff International at Albany, and is familiar with the market.

Boyd says Albany has fared relatively well, pointing to the number of available choices in terms of connecting hub cities, and the large share of seats provided by low-fare carrier Southwest Airlines.

"Albany is enormously well-served," Boyd said Thursday. "You've got really good air service."

Boyd says Albany has access to nine different airline hubs — Newark, Chicago, Cleveland, Philadelphia, Charlotte, Washington Dulles, Detroit, Minneapolis and Atlanta. Low-fare carrier Southwest Airlines offers frequent service to Baltimore, in what passes for a hub in its route system. Nearly four in 10 Albany passengers fly on Southwest.

"Albany is not a hurting airport," he said.

Airport officials are seeking to entice new nonstop service to such cities as Dallas-Fort Worth, Houston or Denver with subsidies, marketing assistance and other enticements.

Business and technology sector leaders say these flights would make connections to their ultimate destinations easier.

Boyd, however, thinks it would be a tough sell to the airlines.

"You don't have enough demand to support service to Denver," he said. Both Denver and Dallas "would need about 70,000 passengers a year with one flight a day," he said. "The current market is half of that."

And the new routes might cannibalize existing service to connecting hubs such as Chicago or Detroit.

On the other hand, they might help reduce what airport officials call "leakage," in which Capital Region residents now drive to Hartford or New York City to catch their flights.

And William O'Reilly, the Albany County Airport Authority's chief financial officer, said the relatively higher fares at Albany make it more appealing to airlines looking to start service here because they'll have more wiggle room with pricing.

Meanwhile, travel agents are coping with the delays that affect regional flights more frequently than mainline flights aboard full-size jets.

Jean Gagnon, manager of Plaza Travel in Latham, says she avoids routing international passengers through Newark, where congested air space can cause delays, especially for the turboprops serving the route, sending them instead through Chicago O'Hare or Washington Dulles.

She said she also avoids sending travelers through JFK.

And she allows extra time for connections in Philadelphia, again because the on-time flight performance is dismal.

As a result, travelers are also getting more vigilant about their flights, what kind of aircraft they're on, and who the operator is.

"We consistently experience delays (luckily there have been few outright cancellations) on the smaller RJs, ATR-42 or Dash 8 aircraft operated on the 'feeder routes' to bigger airports," Art Harvey of Niskayuna wrote following an earlier story on aircraft delays. "While we love Albany International Airport as our airport of departure/arrival, the size of the aircraft (737s or Airbus 320s for instance) will from now on play a much larger role in our vacation planning."

A Nassau resident, Kurt Vincent, said he'd missed European connections three times over the past 10 years because of local connecting flight delays. With flights filled to capacity, he said he's had to wait as long as seven days for the next available flight.

"You can imagine the issues with car rentals, hotel reservations, etc., with a delay like that," Vincent said. "I've given up on Albany and now drive down to Newark or JFK. Haven't had a problem since."

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