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13 domestic seat offers (year over year) versus the annual level of shows seat offers for 2007 with most of the small, medium, and jet fuel prices as a percentage of RASM. Again, the vertical red large hub airports reporting increases over 2006. The recession lines illustrate periods of U.S. recession. What is most interest- began in December 2007, but the fuel spike had already been ing about this chart is that declines in seat offers in the domes- underway for two years. Most small, medium, and large hub tic market appear to lag recessions by about one year. The reces- airports reported a reduction in seat offers in 2008 relative to sion that began in July 1990 is followed by a 1.6 percent decline 2007, although some of these airports continued to grow rap- in seat offers in 1991. The recession that begins in March 2001 idly, as illustrated by the long right-side tail of the red distribu- (together with the extraordinary events of 9/11) precedes a tion. By 2009, the full brunt of the recession was being felt and 10 percent reduction in domestic seat offers in 2002. The reces- the distribution shifted substantially to the left with virtually all sion that begins in December 2007 precedes a 1 percent reduc- of the airports reporting substantial reductions in seat offers. tion in seat offers for 2008, and a 7.9 percent reduction in 2009. What is most interesting about this chart is the leftward The 19901991 recession coincided with a relatively modest shift of the distribution as the economy deteriorated and the fuel spike when measured relative to unit revenue. The 2001 fuel spike took hold. On average, large, medium, and small recession featured relatively modest fuel costs relative to rev- hub airports reported a 3.7 percent increase in seat offers in enue. The most recent recession, which began December 2007, 2007, 0 percent growth in 2008, and a strong 11.4 percent featured a very large (unprecedented) fuel spike. decrease on average in 2009. The distribution also spread out in 2009, with the standard deviation doubling versus 2008, suggesting a wider range of experiences. 2.3 Changes in Air Services Exhibit I-15 repeats the same distribution for changes in seat by Airport Type offers for non-hub airports in the period 2007 through 2009. This section describes changes in air service (as measured The average response is very little different from that of large, by domestic seat offers) at airports from 1989 through 2009. medium, and small hub airports (once a few outlier airports It is very difficult to tie observed changes in activity at a spe- are excluded from the analysis). What is distinguishing about cific airport to changes in fuel prices; however, the analysis non-hub airports is that the variability in response is much presented here focuses on airports grouped by the FAA's hub wider. In fact, even in 2009 there was a significant number of classification scheme--large, medium, small, and non-hub non-hub airports that showed positive growth, whereas there commercial airports--and shows how activity has varied over were no large, medium, or small hub airports that reported differing time frames and by airport size. growth beyond 1 percent. Exhibit I-14 shows the distribution of changes in seat offers At a broader level, other interesting patterns emerge. for small, medium, and large hub airports in the period 2007 Exhibit I-16 reports the average (in yellow) and the minimum through 2009. The distributions illustrate the range and fre- and maximum (in red and blue) percentage changes in seat quency of changes in seat offers in each year. The vertical lines offers for large hub airports since 1989. Shown at the bottom on the chart are the average increase or decrease in seat offers of the chart are the average values as well as the identity of the for the particular year. So for example the blue distribution airports reporting the maximum or minimum changes in seat Exhibit I-14. Distribution of changes in seat offers at small, medium, and large hub airports, 20072009. 16 14 12 Frequency 10 8 6 4 2 0 2 5 8 -4 11 14 17 20 23 26 29 4 1 8 5 2 9 3 -7 -1 6 0 -3 -3 -2 -2 -2 -1 -1 -1 -1 Percentage Change in Seat Offers 2007 2008 2009

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14 Exhibit I-15. Distribution of changes in seat offers at non-hub airports, 20072009. 16 14 12 Frequency 10 8 6 4 2 0 5 12 19 26 33 40 47 54 61 68 75 82 89 -93 -86 -79 -72 -65 -58 -51 -44 -37 -30 -23 -16 -9 -2 -100 Percentage Change in Seat Offers 2007 2008 2009 offers in each year. Even at the largest airports, there is a rela- most interesting about this chart is that the same airports that tively wide range of experience. For example, in 1992, the high- showed the maximum amount of growth in one or more years est growth airport was Pittsburgh while Midway showed also reported the lowest level of growth in other years. This substantial falloff in air service. The following year, the two air- suggests that the level of activity at some airports will vary sub- ports reversed roles. Midway continued to be the peak growth stantially from year to year as carriers seek to establish new air airport in 1994, 2000, 2002, and 2006. In contrast, Pittsburgh services, some of which will succeed while others will not. service fell off the most in 2003, 2005, 2007 and 2008, as US The same pattern is shown in Exhibits 17 and 18 for medium Airways continued to dismantle its hub there. What is perhaps and small hub airports, respectively. Again, the same airports Exhibit I-16. Percentage change in seat offers at large hub airports. 60 40 Percentage Change in Seat Offers 20 0 -20 -40 -60 -80 91 92 93 94 95 96 97 00 01 05 06 07 90 98 02 08 09 03 99 04 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 Year max min avg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 max PHL LAS PIT MDW MDW LAS CVG PHL IAD IAD MDW FLL MDW JFK IAD IAD MDW JFK SFO DEN min IAD PHL MDW PIT DEN TPA DFW MDW JFK SLC EWR IAD BOS PIT STL PIT CVG PIT PIT CVG avg 4 -1 0 4 6 1 0 -3 -5 19 4 3 -9 -4 4 4 -4 2 -1 -7 airports that have been max and min

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15 Exhibit I-17. Percentage change in seat offers at medium hub airports. 60 40 Percentage Change in Seat Offers 20 0 -20 -40 -60 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 Year max min avg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 max OAK SNA CMH RNO JAX OAK OMA PVD BNA BUF BUF SJC SMF DCA RSW RSW DAL MSY MSY BUF min MCI CLE SDF IND BNA RDU BUR OAK CLE RNO RNO RNO DCA MCI MEM DAL MSY BDL OAK ONT avg 3 0 1 0 5 2 -4 -3 -5 19 3 4 -10 -3 2 5 -3 5 -1 -11 airports that have been max and min Exhibit I-18. Percentage change in seat offers at small hub airports. 700 600 Percentage Change in Seat Offers 500 400 300 200 100 0 -100 -200 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 Year max min avg 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 max ACY ACY MSN GCN GSO BIL COS GCN MHT GPT SFB SFB SFB ACY SFB SFB BTR HPN SFB MLI min DSM CAE DAY SFB EUG ACY BIL GSO SFB GCN GCN SRQ EUG SFB LIT SBN GSO GCN ISP SFB avg 4 0 -2 -2 -1 -3 -1 -2 -7 15 14 2 -11 -5 8 5 -7 4 1 -14 airports that have been max and min