Airports adjusting for fewer passengers
FORT WORTH, Texas — From his office overlooking the runways of one of the nation's busiest airports, Dallas-Fort Worth International Airport chief executive Jeffrey Fegan sees the slowdown coming this fall.
Airlines are cutting flights under the pressure of rising fuel costs, and that means fewer passengers and less money from parking and food concessions at DFW. For the first time in its 34-year history, the airport is freezing its budget and rethinking future expansion plans.
"We couldn't do that even after 9-11," Fegan said.
With the airline industry in a nosedive, airports are hitting turbulence: After years of growth, they are delaying capital projects, freezing hiring, and considering increases in everything from landing fees to parking. Concessionaires are hurting, and many expect to close.
The problems are greatest at secondary airports that are losing a bigger share of their flights and lack international service to shore up weak domestic traffic.
Airports in Cincinnati, Cleveland, Houston, Honolulu, Las Vegas, Oakland, Calif., Columbus, Ohio, and elsewhere are expected to lose more than 10 percent of their scheduled service later this year as airlines eliminate flights.
Oakland, which is losing service from American and Continental Airlines, is canceling a terminal project. Columbus also lost service when hometown carrier Skybus Airlines shut down in April after finding it could not keep offering $10 flights when jet fuel was $3 a gallon.
In San Luis Obispo, Calif., Delta Air Lines is pulling out after just one year, ending service to Salt Lake City. And American Eagle will depart, dropping its five daily flights to Los Angeles and closing a maintenance base that has been around longer than Eagle.
"American was an absolute shock," said airport director Klaasje Nairne. "They were always the hometown airline. They were in the downtown parades. They invested in the community."
Eagle's flights out of San Luis Obispo were running nearly 90 percent full. Still, the airline, a unit of AMR and feeder carrier for American Airlines, told Nairne it was losing money on the service.
The airport planned to spend $60 million on a new terminal and parking garage. Now both are in limbo, Nairne said, although she expects county supervisors will approve a scaled-down terminal.
"We have a number of businesses that depend on good air service," said David Garth, president of the San Luis Obispo chamber of commerce. "It's going to be much harder for us to convince a high-tech company that they should come here. It hurts."
Most U.S. airlines are cutting flights after the heavy summer travel season to reduce costs and drive up fares. They suffered big losses in the first six months of this year, largely because of a huge increase in jet fuel prices.
Leaders of dozens of airports, many of them smaller ones, were worried enough that they called an emergency strategy meeting last month in Washington. They heard politicians blame the airline industry's problems on inadequate U.S. oil production and oil-price speculators.
Relatively speaking, Dallas-Fort Worth is sitting pretty thanks to a stroke of only-in-Texas good luck — an energy company has already paid the airport more than $160 million to drill for natural gas, and royalties could boost the tab for years to come.
Even so, American and American Eagle will cut flights beginning next month. Airport officials predict the number of passengers will decline more than 7 percent, to about 54 million in the fiscal year that starts Oct. 1, the smallest number in five years.
That will mean about $15 million less in revenue from parking, rental cars and concessions, said CEO Fegan. Besides freezing the budget, landing fees will rise "slightly," he said, and this week, airport officials tossed around the idea of closing part or all of one of the terminals to save money.
In Cleveland, Continental Airlines spoke just last year about increasing capacity by 40 percent in two years. Instead, it will cut available seats 13 percent and end nonstop service to 24 cities.
There will be about 160,000 fewer passengers a week passing through Los Angeles International Airport, where capacity will fall nearly 11 percent, according to airline industry database Innovata. American, Delta Air Lines and UAL's United Airlines are making big cuts; low-fare Southwest Airlines is standing pat.
