Supporting airline partners to grow networks, keep fares low and reduce leakage to larger hubs is the most effective use of CARES funding for smaller US airports.
Although traffic is beginning to return in force, leakage remains a major challenge and air service development is critical in the recovery, three senior airport figures told the recent Take Off North America conference.
Colorado Springs Airport’s (COS) Air Service Development Manager Joe Nevill said that between 2019 and 2022 the airport would be allocating about $20 million to “work with our airline partners to keep costs low”.
“If they're not if they're not successful, we’re not successful, so we're trying to keep our CPE at about $4 or less,” said Nevill. “That's a big goal of ours, we’re not using CARES money for air service incentives per se, we're actually putting it into rates and charges.
“To us that is that is the biggest incentive is to keep the cost low for our airline partners.”
Nevill added that along with lower costs to airlines, the airport is working closely with the chamber of commerce, companies and business groups to “retain as much traffic as we can and reduce leakage to our northern neighbor [Denver]”.
Initiatives such as marketing routes to the local community and reducing parking fees over holiday periods will help to combat leakage, said Nevill, as will the travel experience of using a smaller airport in the wake of the pandemic.
“The other big thing, if you look now versus a couple years ago, is that fares are very comparable to Denver,” added Nevill. “There's more of a reason for people to travel out of Colorado Springs, even if you do have to make a connection to your final destination.”
Fellow panelist Mike Edwards, director of aviation at Baton Rouge Metropolitan Airport (BTR), said that airport was also “watching closely” the leakage to Louis Armstrong New Orleans International Airport (MSY) which is 70 mi. away.
Edwards agreed that passengers’ experience is a major factor, but more competitive fares have “definitely helped us a lot” despite the absence of a ULCC at the airport.
After using its CARES and ARPA funds to service debt in the first instance, its current focus is “how to keep costs stable for our airline partners.”
“We're continuing to work on that and looking at how we can best leverage the funds to keep our CPE as low as possible.”
Similarly, Green Bay Austin Straubel International Airport’s (GRB) Airport Director Marty Piette said his airport made a “conscious decision at the beginning” to use CARES funding to keep costs for airlines low rather than “capital projects.”
“It provides a competitive environment for the airlines, which is a big part of why we're able to retain all of our routes and all of our airlines and then add new service as well,” said Piette.
Reducing leakage is also a major factor for Green Bay, added Piette.
“Milwaukee for us is 2 hr. away, Chicago is 3 hr.,” he said. “We know we lose a significant amount of our traffic to other larger airports, but driving is a connection, so what’s the difference? Why don’t passengers fly their connections?”
Piette agreed with Nevill that low fares and marketing are the two important factors, and CARES money would help to address the challenges.
He said: “It used to be cheaper to drive to Chicago and fly out of there, but that maybe isn't the case anymore as fares have become more competitive.”
“A lot of it goes back to marketing and using some of that CARES money to help us market to the community and get the thought process going.”