Effects of Airline Industry Changes on Small- and Non-Hub Airports (2015) / Chapter Skim
Currently Skimming:
Pages 15-34
The Chapter Skim interface presents what we've algorithmically identified as the most significant single chunk of text within every page in the chapter.
Select key terms on the right to highlight them within pages of the chapter.
From page 15... ...
15 C H A P T E R 2 2.1 Introduction The U.S. aviation industry has undergone major changes in the past 15 years.
|
From page 16... ...
16 Effects of Airline Industry Changes on Small- and Non-Hub Airports control of the community. A review of the recent history of the U.S.
|
From page 17... ...
Literature Review of Airline Industry Trends 17 of financial difficulty for airlines (USDOT OIG 2012, p.
|
From page 18... ...
18 Effects of Airline Industry Changes on Small- and Non-Hub Airports The effects of the fuel cost increase on the air transportation system can be explained through supply-side and demand-side effects. According to a recent study, "Supply-side effects include increases in direct operating costs of airlines, resulting in changes to networks and fleet assignments.
|
From page 19... ...
Literature Review of Airline Industry Trends 19 shown in Exhibit 2-5. In 2001, 90% of domestic seats were split among 10 major carriers (Trans World Airlines is not shown because it merged with American Airlines during 2001)
|
From page 20... ...
20 Effects of Airline Industry Changes on Small- and Non-Hub Airports to 2013. The number of flights declined by more than 12% during the period, from 9.5 million in 2003 to 8.3 million in 2013 as shown in Exhibit 2-7.
|
From page 21... ...
Literature Review of Airline Industry Trends 21 decisions to reduce service in markets that were more price elastic and to maintain or increase service in markets that were more price inelastic (Morrison, Bonnefoy, and Hansman 2010)
|
From page 22... ...
22 Effects of Airline Industry Changes on Small- and Non-Hub Airports The trend of fewer flights by aircraft with fewer seats is expected to continue as virtually the entire small regional jet fleet in the United States will be retired over the coming years, as shown in Exhibit 2-12. Despite the recent decrease in use of small regional jets, network carriers increased their reliance on regional carriers in the past decade.
|
From page 23... ...
Literature Review of Airline Industry Trends 23 By reducing capacity, carriers were able to increase load factors on flights. With fuller planes, carriers were able to reduce the number of discounted fares offered (USDOT OIG 2012, p.
|
From page 24... ...
24 Effects of Airline Industry Changes on Small- and Non-Hub Airports Source: Bureau of Transportation Statistics, Form 41, Schedule P-1.2 Exhibit 2-15. Ancillary revenue collected by U.S.
|
From page 25... ...
Literature Review of Airline Industry Trends 25 airlines broke even in 2009 and generated operating profits in 2010 and 2011, in sharp contrast to the operating losses in 2001 through 2005 and 2008. The improved financial performance of U.S.
|
From page 26... ...
26 Effects of Airline Industry Changes on Small- and Non-Hub Airports providing fewer flights but with larger aircraft and from rationalizing scheduled block times so that more flights arrive "on time." 2.4 Effects on Airports Serving Small Communities The airline industry's response to external shocks in the past 15 years has had a particularly severe effect on service at airports serving small communities as identified in a number of studies (USDOT OIG 2012; GAO 2014a and b, 2011a, 2003a and b, 2005; Morrison, Bonnefoy and Hansman 2010; Wittman 2014; Wittman and Swelbar 2013a and b)
|
From page 27... ...
Literature Review of Airline Industry Trends 27 airport group's performance can be explained by the reassignment of some medium-hub airports to the small-hub airport group during the study period. Exhibit 2-19 provides snapshots of the U.S.
|
From page 28... ...
28 Effects of Airline Industry Changes on Small- and Non-Hub Airports Part of the change in flights to smaller airports can be explained by the growth of LCCs relative to network carriers. Network carriers traditionally provided service to smaller airports to feed hub operations at larger airports.
|
From page 29... ...
Literature Review of Airline Industry Trends 29 suffered a substantial decline in flights. Conversely, those airports that served as hubs for LCCs (e.g., JetBlue Airways [JFK]
|
From page 30... ...
30 Effects of Airline Industry Changes on Small- and Non-Hub Airports prioritizing market share to a strategy of prioritizing profitability. The new strategy entailed rationalizing capacity to reduce operating losses and increase yields by increasing load factors.
|
From page 31... ...
Literature Review of Airline Industry Trends 31 capacity resulted in reducing frequency or eliminating service to secondary connecting hubs, rather than eliminating all service to both secondary and primary connecting hubs. However, ACQI connectivity scores did indicate that the secondary connecting hubs themselves were adversely affected by recent changes in airline service.
|
From page 32... ...
32 Effects of Airline Industry Changes on Small- and Non-Hub Airports Exhibit 2-23 shows the percentage of cancelled or diverted departures by community size in 2010. Rural communities suffered substantially greater rates of cancellations and diversions than larger communities.
|
From page 33... ...
Literature Review of Airline Industry Trends 33 communities. Exploring commercial air service and urban development, Goetz (1992)
|
From page 34... ...
34 Effects of Airline Industry Changes on Small- and Non-Hub Airports from smaller communities without an airport is structurally different than those with small hubs -- travel from communities with small hubs is relatively elastic, suggesting that travelers are willing to travel to other airports. Therefore, to attract service to their communities, local economic development officials must overcome two problems: unattractive market economics and leakage of passengers to other airports.
|
Key Terms
This material may be derived from roughly machine-read images, and so is provided only to facilitate research.
More
information on Chapter Skim is available.