Heavy holiday traffic predicted
Regional airport markets, much like real estate markets, are invariably “local.”
Take news about a year-over-year increase in Pikes Peak region passenger boardings at the Colorado Springs Airport, for example. Despite broader downward airline industry trends, local enplanements are on the rise.
Citing September’s 2.3 percent increase in Colorado Springs-based passenger boardings — the first year-over-year monthly increase of 2009 — Aviation Director Mark Earle said he expects a continued uptick in activity.
“We’ve seen evidence of improvement since early in the year, but so far it’s been a trend where the gap (in decreases) was getting smaller each month,” he said. “September is our first crossover point. Hopefully this is a sign of things to come.”
His projections contrast with more sobering national statistics from Michael Boyd, president of The Boyd Group, who saw Colorado Springs as an anomaly. “You (Colorado Springs) bottomed out earlier than other airports, probably due mostly to all the military in your area,” he said.
Fresh from addressing the 14th Annual Aviation Forecast Summit this month, Boyd is not convinced that an industry turnaround is anywhere on the horizon — at least not until 2012.
“Airlines are finding that even chopping fares won’t always get people to fly,” he said. “When you’re out of a job, or fear you will be, travel’s not high on the agenda. So cutting the fare to Orlando from $200 to $100 is a non sequitur — the consumer isn’t as interested when he doesn’t have a job.”
At an earlier conference, Boyd predicted that airports worldwide would see more than 185 million fewer people boarding planes during the next three years, with 20 million fewer enplanements between 2009 and 2010.
Even if the economy recovers faster, however, a drop in consumer demand means it will take at least three more quarters for the drop in business to reverse course, he said. In the meantime, airlines have implemented cost-cutting measures and have decreased capacity.
“Airlines are not going to add seats. They are in the business of making money, and just carrying more passengers isn’t the formula. It’s matching the costs of operation to the revenue they can attract. Case in point, the US airline industry will be operating about 120 fewer jets in 2009 than in 2008,” he said.
But remember, the Colorado Springs Airport is different — and holiday travelers profile as a very determined group.
September poll results compiled by Mondial Assistance — the world’s largest travel insurer — released this week by Reuters.com confirmed that “Despite a challenging economy and concerns over the H1N1 flu, Americans` plans to visit family and friends this holiday season have not been diminished.”
In fact, 61 percent of those surveyed said they were “confident they will take a holiday trip this year,” up from 59 percent in 2008.
Furthermore, 94 percent of respondents said they would not change their holiday plans because of concerns about H1N1.
Colorado Springs Airport Chief Financial Officer Gisela Shanahan said this September’s increase — reversing a 4 percent decrease during August compared to last year for the same period — bodes well for packed planes.
“If the current trend continues, I expect we may end up at or slightly above last year’s totals,” she said, adding that most planes departing these days from COS are full.
Not surprisingly, she warned that local passengers who wait too long to book holiday travel could be disappointed. The reason: some airlines have swapped larger planes for smaller, more fuel-efficient aircraft.
“So there are just fewer seats available,” she said.
The ripple effect of fourth quarter increased enplanements spills over into other revenue generators such as parking as well, Shanahan said.
“For a while we saw a decline but our valet service never dropped off enough to be detrimental to being able to offer service,” she said. “It was off a little more than short-term (parking), but it’s recovered in the last few months. We’re hopeful that parking — along with general trend information we get from our ticketing offices — are a hopeful sign for the broader market.”