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Reduced capacity drives down airport traffic, but JetBlue could provide lift

The Rhode Island Airport Corporation reported a 13 percent drop in air traffic for October, and those at RIAC said things won’t be getting better anytime soon.

RIAC acting president and CEO Peter Frazier said the 13 percent drop in traffic from October of last year was partially a result of Hurricane Sandy but also a by-product of carriers slashing flight capacity.

Frazier said airlines offered 18 percent less scheduled capacity this October, a move that ensures they send out fuller planes. By putting more heavily sold planes (either smaller aircraft of fewer large planes) out each day, carriers can consolidate costs on personnel and landing fees. Frazier said carriers’ capacity cuts are a reflection of the downed economy.

Pair these cuts with the impact of Hurricane Sandy, and October was a dismal month for T.F. Green. The airport lost two and a half days of flights, about 8 percent of the month’s total passengers, to cancellations.

On a year-to-date basis, air traffic at Green is down 6.2 percent from last year. Last year at this time, the airport had seen 3.2 million passengers; this year, they’ve seen 3 million. Frazier said because airlines have decreased their flight capacity, Green has fewer discounted seats to sell. This means savvy fliers often look to Logan or other airports for cheaper rates, leaving T.F. Green’s traffic to dwindle.

Though peak travel season is upon us, Frazier isn’t confident the holidays will contribute to higher air traffic. He expects to see further drops in air traffic and carrier capacity. November’s capacity was down 15 percent, and December is projected to drop 10 percent. In January, Frazier said the dip would only be about 7.5 percent, which suggests a potential turnaround for air traffic numbers come 2013.

“Airlines are slowing the reduction in capacity,” he said.

Both Frazier and Patti Goldstein, Vice President of Public Affairs for RIAC, are hopeful that jetBlue, the new carrier arriving at the airport this week, will help increase traffic numbers at Green.

Although Frazier said the addition of jetBlue’s flights won’t be enough to turn the trend around, he said he hopes the new carrier will encourage competing airlines to offer increased capacity and better rates.

Starting Thursday, jetBlue will fly three daily flights out of T.F. Green, one to Fort Lauderdale and two to Orlando. Each jetBlue Airbus 320 can hold 150 passengers, so the three flights will account for a maximum of 900 fliers daily.

Goldstein said Florida flights are among the most popular for the airport, and she hopes the new carrier will bring new passengers and additional revenue to the airport. Though she couldn’t provide specific booking numbers, she said the number of passengers who have pre-booked their flights on jetBlue planes looks to be promising.

“We’re hopeful this will be a very positive trend,” she said.

Still, the immediate future for T.F. Green isn’t very bright. Frazier said he’s hoping they won’t dip into double-digit decreases in traffic for November and December but isn’t forecasting an end to decreasing numbers until next year.

Like most things, Frazier said the falling numbers are due to the overall economy. Once the country comes out of the recession and passengers are more comfortable with spending money on flights, Frazier is confident Green will see a turnaround. He said Green’s low-cost parking, safety and efficiency all contribute to making it a very user-friendly airport.

“Once the economy turns around, Rhode Island has an incredible asset,” he said.


Comments
2 comments on this item

This is what one of the more active commentators posted in PROJO today:

lat41:

"Every flight I take is jammed. We need more capacity and hopefully JetBlue starting flights this week will give the airport just that. The local NIMBYs and naysayers love bad news. Boston is saturated and the air carriers will have to spread out at some point soon."

So lat 41, what is the bad news? I think it has more to do with the excessive cost for the airlines to operate out of Green - brought on by truly excessive borrowing and payroll costs at Green than anything else. The other news is that RIAC does not seem to be in any hurry to borrow the additional $50 million or so to fix the safety problems at Green and build the promised glycol plant.

What happens if RIAC is unable to borrow those funds because it can't come up with the $2 to $3 million per year in additional debt service without violating existing debt service covenants? Could that problem have anything to do with the fact that no replacement has shown up for Mr. Dillon?

This is certainly not the RIAC of the 2000s or the 1990s. It seems to me that as RIAC matures into deeper and deeper losses ($8 million this year) your flights are going to get more and more crowded.

By the way, I just bought a ticket from Baltimore to Green on December 19th for $61.00 . Southwest still has some excess capacity and is selling "internet specials."

What is the contract with Jetblue? Anyone know?

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