DEWITT TWP. - It's been a month since daily flights to Washington D.C. from Capital Region International Airport ceased. It could be two more months before one of two competing airlines gets federal approval to take over the defunct route, far beyond the Nov. 5 decision the airport had originally hoped for.
American Airlines announced its bid for the D.C. route in August. Delta Air Lines threw its cap in the bidding pool in September, delaying federal approval.
In the meantime, the airport is suffering.
“We’re seeing drops in revenue,” said Chris Holman, a member of the Capital Region Airport Authority board. “In our business, we make our money by moving people in and out of the airport.”
It doesn’t help that the route opened up a month earlier than expected, after Sun Country Airlines terminated its lease with the airport in October. Combined with the loss of Allegiant Airlines in January, airport officials are anticipating a $1.2 million budget shortfall for the 2015-2016 fiscal year. The airport expects the U.S. Department of Transportation and Federal Aviation Administration to approve the D.C. route by the end of the year.
Three airlines remain at the airport: Delta, United Airlines and Apple Vacations. Delta offers daily non-stop flights to Detroit and Minneapolis, while United provides daily non-stop flights to Chicago. Apple Vacations offers seasonal flights to Cancun, Mexico from December to April.
To make up for the loss in revenue, the airport has hiked user fees for the remaining airlines to generate an additional roughly $400,000 while taking roughly $750,000 from its reserves to break even, said Robert Selig, airport president and CEO.
Each day the airport goes without the D.C. route, it loses roughly $1,000 in landing fees, which cover operating costs.
That doesn’t include the $4.50 passenger facility charge the airport collects from each ticket sold, which goes toward capital improvements. When airplanes carry between 50 and 70 passengers in a flight each day, those missed flights add up quickly, especially for an airport that has seen declines in the number of passengers over the years.
The airport reached its peak traffic in 1997 with 720,365 total passengers. By 2009, the first full year of the recession, those numbers had plummeted to 265,967 but steadily crept back up to 418,850 in 2013. In 2014, the number dipped again to 376,912 passengers.
As of September, the airport’s number of passengers totaled 257,440.
“If a customer leaves, the longer they are gone, the less apt they to come back,” Holman said.
When American Airlines announced its bid in August, it received an outpouring of support that included 1,200 letters and emails from government officials, business owners, special interest groups and residents in the region.
Now that the original deadline to fill the route won’t be met, government officials are writing more letters to pressure USDOT and the FAA to approve the bid quickly. Republican Congressmen Mike Bishop, Tim Walberg and John Moolenaar sent one last week.
“With Sun Country no longer servicing this route, a quick decision is crucial to ensure a lapse in service is as short as possible,” they wrote in an Oct. 28 letter addressed to Secretary of Transportation Anthony Foxx.
The D.C. route would generate $16 million in economic impact annually for the region, according to a study by Trillion Aviation Inc., an airport consulting firm.
Delta’s bid for the route made for a longer USDOT and FAA approval process, requiring the agencies to hear lengthy testimonies from both companies.
“Delta would be the superior public interest choice,” Delta officials wrote in letter dated Sept. 15 to the FAA. “Unfortunately, due to its limited slot holdings, Delta is already sub-optimized at DCA (the D.C. airport) and cannot commence Lansing services without unacceptable harm to its current DCA network … Delta is in much greater need of exemption authority than American if it is to provide Lansing with nonstop service.”
American challenged Delta, claiming the company does not have Lansing’s best interests in mind.
“Only after American applied to preserve LAN-DCA service did Delta feign interest in protecting service to the nation’s capital for Mid-Michigan travelers, by filing a copy-cat application that proposed nearly identical slot times and equipment as American,” wrote Howard Kass, vice president of Regulatory Affairs for American Airlines in a response letter to the FAA dated Sept. 24. “The FAA should not permit Delta to effectively re-start this proceeding and prolong the evaluation of American’s exemption request for its own commercial benefit.”
JetBlue Airways also filed an objection to both the airlines’ bids, mainly to Delta’s.
”Delta, like American, has a large portfolio of historic DCA slots with which it could start DCA-Lansing service at any time,” JetBlue officials wrote in a letter dated Oct. 19 to the FAA. “In fact, Northwest Airlines operated DCA-Lansing shortly before its merger with Delta in 2008. After its merger with Northwest, Delta abandoned many DCA slots that were previously used for service to communities such as Lansing, but nonetheless Delta remains the second largest slot holder at DCA after American with around 50 daily departures.”
The airport has openly backed American Airlines because it is promising to offer more than Delta. American Airlines would offer a 7 a.m. flight from Lansing to Washington, D.C. and a 5:30 p.m. return flight daily, which would make it easier for lobbyists and business leaders to set up meetings and return home at a reasonable time, Holman said.
American Airlines would also offer three daily flights from Lansing to Chicago's O’Hare International Airport starting in early 2016. It would offer 33 connecting flights to states along the East Coast from Washington, D.C., and 115 connections worldwide from Chicago.
Delta also would offer one daily round-trip flight to D.C., but isn't proposing other connecting flights.
“We think American Airlines coming in will fit us best,” Holman said. “But now we’re losing passengers, losing fees, this hurts.”
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