Wednesday, July 30, 2008
Flights will continue in Roanoke
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James M. Turner Jr.
Turner is the chairman of the Roanoke Regional Airport Commission.
I write on behalf of the Roanoke Airport Commission to address the state of the commercial aviation industry in general and how it affects the Roanoke and New River valleys in particular.
As anyone can see, the current cost of fuel is creating waves throughout the economy. While gas, food and construction costs are rising, the airline industry is dealing with fuel costs that have increased 53 percent in the last 12 months and 251 percent in the last eight years. At present, 85 percent or more of the cost of an airline ticket goes toward fuel.
As a result, every major airline has announced the elimination of unprofitable routes, consolidation of service and the major reduction of excess seat capacity in order to raise fares and make a profit.
Delta Airlines recently announced nationwide cuts in its service, including significant reductions at its Cincinnati hub. American Airlines has announced it is ceasing service to less profitable cities, particularly on the East Coast. Leisure markets in Florida and Las Vegas are seeing a substantial decrease in service as airlines opt to discontinue low- to no-profit routes. However, making some necessary adjustments does not indicate that all air service will disappear.
To date, Roanoke is scheduled to lose a net of two flights per day, reducing the number of daily departures from 33 to 31. Delta is eliminating its three daily flights to Cincinnati, but is adding an additional daily flight to Atlanta. United and US Airways are both planning to add larger airplanes on some of their Roanoke flights this fall. Roanoke remains a profitable market for the airlines, just the kind of market for which the airlines are looking.
These moderate, near-term air service developments do not mean the airport commission can rest assured of minor inconvenience, nor that it can or would refrain from strategic planning for the future. Roanoke is not immune to air service cuts.
Current estimates show nationwide cutbacks of air service in the range of 20 to 25 percent are needed to bring the airlines to profitability. It is not unreasonable to expect air service in Roanoke may follow that same trend.
What is unreasonable is to assume that the Roanoke airport will lose all commercial air service. According to the U.S. Department of Transportation, in 2007 the airlines reported more than $115 million in revenue directly generated from serving the Roanoke airport. Traditionally, 60 percent or more of ROA passengers fly for business. As businesses continue to operate in a global economy, there will be a demand for air service.
The airport serves a population base of nearly 800,000 people. The Roanoke Valley is a regional service center for business and is also situated at some distance from other air service hubs. The truth is that Roanoke provides a strong business passenger market to the airlines, a market the airlines need and value.
Recognizing the reciprocal need for air service, the airport commission has implemented a variety of initiatives to reduce the financial burden of our air carriers.
Recently, the commission undertook the cost of the skycap agreement in order to assist the airlines that previously provided this service. The new airline rates and charges include an airline subsidy of more than $1 million, thus greatly reducing the cost to airlines serving our airport. Additional budget cuts are being investigated.
Meanwhile, at the request of our partner airlines, we have lobbied Congress for relief from fuel price increases related to oil speculation. Examples such as these demonstrate the commission's willingness to support our airlines in any way possible.
Air service is a reflection of the economy of the area it serves, not the economic driver. Where there is demand, it will be met. When the demand diminishes, the amount of product decreases as well. The most important thing anyone can do to preserve local air service is to fly and to use the airport.
