Little Rock Airport holds firm despite ongoing pandemic disruptions
The state’s largest airport has emerged relatively unscathed from the pandemic, but it will continue to face challenges adding or maintaining air service as the nation’s airlines face pilot and aircraft shortages , the inability of business travel to return to pre-pandemic levels and rising fuel prices. prices.
However, disruption and uncertainty create opportunity.
These were among the key takeaways from an air development workshop held last week at Bill and Hillary Clinton National Airport/Adams Field.
The pandemic has turned the industry upside down,” said Joseph Pickering, director of Mead & Hunt, a global consulting firm. The former Delta Airlines executive is the business unit head of the company’s Air Services Consulting Group. of advice.
“We had a shock event unlike anything else,” he told members of the Little Rock Municipal Airport Commission and airport officials. “We’ve had recessions in the past, other little problems along the way. 9/11, looking in the rearview mirror, seems minor compared to what we had now.”
Passenger traffic fell to levels not seen since the 1990s, while airlines offered only “minimum service” as part of an effort to maintain the economy when much of the country was “locked down” in an effort to stop the spread of the covid-19 virus.
One of the immediate effects of the pandemic has been the loss of business travellers. They make up a disproportionate share of airline passengers because they travel frequently and often pay high prices for their tickets.
“I was told by an airliner planner that the state of Florida at the start of the pandemic single-handedly kept the industry afloat because people eventually wanted to get out,” Pickering said. “These leisure destinations benefited more than typical business markets.”
As the demand for airline products has fallen, profitability has also fallen, leading to lower costs. Airlines have been unable to reinvest in new planes and have offered early retirement packages to employees, including pilots, their most expensive labor cost, Pickering said.
Once demand started to return, the airlines had no pilots in place to meet it. Now fuel costs are rising and business travel has not returned, Pickering said.
“We have this perfect storm,” he said. “We have a lack of business travel, we have crew shortages, fuel increases, disruptions in economies around the world. And fewer planes as well.”
All of this disruption and uncertainty has left small towns with reduced service. Delta Airlines, for its part, pulled out of Fort Smith Regional Airport. American Airlines still serves the airport.
Other destinations such as Myrtle Beach and Key West are fully recovered, according to Pickering.
“Little Rock is somewhere in between,” he said.
Margaret Muir was one of two American executives who spoke at the day-long workshop.
Little Rock serves five of American’s 10 US hubs: Chicago, Dallas, Charlotte, Miami and Washington, DC
“You can see where we run our service from Little Rock – we connect east and west and north and south – so lots of options for the passenger from Little Rock trying to get to just about n’ anywhere in the country,” said Muir, senior director of network planning at American.
These days, she said, Clinton National performs fairly consistently to and from US hubs in Dallas and Charlotte.
“Because you can connect to these hubs anywhere, they tend to be more resilient,” Muir said.
The Chicago hub is affected by winter weather, Miami weekend service hasn’t been strong “so far” and the DC hub has been slow to recover, but the airline is seeing some “signs of strength,” she said.
Given all the challenges facing Americans and the rest of the airline industry, Muir said expanding service to Clinton National would be difficult.
The airline is looking at a number of metrics to evaluate the new service, she said. They include how a new route would fit into the overall strategy, the demand for the new route and the value of that demand, would it drive demand and, last but not least, the opportunity cost.
“You’re going to have to fly from somewhere,” Muir said. “We don’t have an aircraft waiting to be deployed in a new market. Instead, it was already doing something. What are the opportunity costs of moving from an existing market to a new market?”
And to maintain the service that Clinton National already has, she said, the airport must keep costs low, which it already does; keep the airline informed of changes in the market that may impact service, such as business expansion or relocation within the city; and tell the airline what customers are saying about routes and schedules.
Bryan Malinowski, Clinton National’s top executive, expressed concern that all of the travelers would return.
“Airlines are telling us leisure travel is back, but only about 50% or less of business travel,” he said. “I think that’s an important point to echo.”
Pickering pointed to other cities and their efforts to retain or stimulate demand, including using federal pandemic relief funds, which can be used to subsidize air travel as it may qualify as economic development or tourism. .
“Air service ticks both of those boxes,” he said.
Last year, the Tulsa County Board of Commissioners allocated up to $3 million in federal covid-19 relief funds to a local group to encourage nonstop flights from Tulsa to major US cities. The group aims to raise $15 million in public and private funds to fund the effort.
American Airlines then announced that it would add year-round nonstop service from Tulsa International Airport to Ronald Reagan National Airport in Washington, DC, and Miami International Airport beginning in November.
Pickering warned that incentives are no guarantee.
“Incentives help you cross the finish line,” he said. Airlines “will not go into a market that they know will not work”.