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The Mysteries of Airline Service

Dec 11 2024

How do communities get airline service; how do airlines decide who gets what?


Airports get two questions all the time: when is a new airline coming to town, and when are we getting non-stop service to __________?  

Fill in that blank with the destination of your choice. 

We get it. We’d all love to have non-stop flights to the destination of our choice with a maximum round-trip fare of $100. Unfortunately, that’s not how the airline industry works. If an airline tried it, it would quickly go bankrupt. Airlines are like any other business — they’re in business to make money! 


New Airline, Where Art Thou?


In the mid 1980s, there were more than 50 U.S. airlines that airports could talk to about air service. About a dozen exist today, and only four of those have large networks that can connect people to places across the country and overseas: United, Delta, American, and Southwest. 

The first three airlines are already here. Southwest isn’t here because it considers the Springfield air market too small. In general, Southwest won’t enter a market with less than one million people living in the Metropolitan Statistical Area. The Springfield metro area has approximately 491,000. 

The rest of the airlines are niche carriers. Six of them are low-cost carriers with limited networks: Allegiant, Frontier, Spirit (Spirit just filed for bankruptcy protection), Avelo, JetBlue, Sun Country, and Breeze. Allegiant is already here. Alaskan and Hawaiian airlines just merged. When it comes to airlines, the pickings are slim!


You want to fly where?!


How does an airline decide where to fly? Based on public feedback, a significant minority believe that airports order service from the airlines à la carte, write a check, and voila — new airline service! 

Let’s dispense with that thought immediately. It’s illegal for a publicly owned airport, such as Springfield’s, to buy airline service. 

Here’s how it really works… 

Rather than flying from Springfield to the destinations of our choice, airlines fly from Springfield to a few “hub” cities. This is called hub and spoke flying. Let’s explain how it works by using American Airlines as an example.

Suppose you want to fly from Springfield to Amarillo, TX. To get you there, American flies you from Springfield to Dallas. At Dallas you get on another flight that takes you to Amarillo. In this scenario, Springfield and Amarillo are the “spokes,” and Dallas is the “hub.” 

Look at the diagram. The “hub” is Dallas. The smaller cities are the “spokes.” On any given day a handful of customers in each spoke city want to fly to Amarillo. Rather than provide a flight from each of those cities to Amarillo, American flies them to Dallas where they’re gathered up from all those spoke cities and then flown to Amarillo on a different (connecting) flight.


 

Note the phrase, “handful of customers.” This is a key point. On any given day, there aren’t enough people who want to fly to Amarillo, in each of those spoke cities, to justify the cost of a non-stop flight. So, the airline gathers them up in Dallas and then sends them on to Amarillo. 

How many people fly from Springfield to Amarillo on any given day? 

An average of one person a day flies from Springfield to Amarillo. That won’t fill the smallest plane that an airline is going to use — a 50-seat regional jet. An airline isn’t going to fly that plane between Springfield and Amarillo if, on average, 49 seats are empty. Why? Because it would lose money. 

Let’s talk more about passenger numbers and where those passengers want to go — because really, when you get down to it, this is the nitty-gritty economic math that airlines deal with. 

Look at the top ten destinations for people flying from Springfield in the Third Quarter of 2023. The numbers represent passengers using the three Springfield airlines which have daily service: American, Delta, and United. 
 

RANK  DESTINATION  AVG NUMBER OF PASSENGERS EACH DAY  TYPE OF FLIGHT  FLIGHTS PER DAY 
1.  Chicago  90.9  Non-stop 
2.  Denver  81.2  Non-stop 
3.  Dallas  78.8  Non-stop 
4.  Atlanta  71.9  Non-stop 
5.  Houston  53  Non-stop 
6.  Charlotte  43.4  Non-stop 
7.  New York City metro  34.6  Must connect through a hub   
8.   Washington DC/Baltimore  34.5  Must connect through a hub   
9.  Seattle  29  Must connect through a hub   
10.  San Diego  25  Must connect through a hub   


See the numbers for the average number of people each day? Only the top six destinations have enough passengers to fill one 50 or 75 seat jet on a daily basis. 

So how come we have more than one flight per day to the top six destinations? This gets complicated, so please bear with us. 

The Springfield to Dallas service is our busiest route with approximately 489 people a day using it. Of those, only 75.8 make Dallas their final destination. The rest take a connecting flight, from Dallas, to their final destination. 

That’s why we currently have eight flights a day to Dallas rather than just one — 413 customers are flying from Springfield to Dallas and then taking a connecting flight (s) to their final destination. 

Here’s a bottom-line point: at minimum, anytime we ask an airline for new daily service, it must be for a city that is a major airline hub. And to take it a step further … 

When an airline considers adding service from a small market, such as Springfield, to a big hub, it’s not just asking how many people want to fly from Springfield to that hub airport. It’s asking how many people it can connect beyond the hub, to another city, and how much revenue will those connecting customers generate? It’s this “connecting traffic” that airlines are interested in. In other words, how much connecting traffic (i.e., revenue) can Springfield customers generate? 

We’ve barely scratched the surface of the airline decision making process, but here’s the bottom line… 

Ultimately, it’s growing passenger numbers at an airport that convince airlines to add service; growing demand = more service. In this regard, Springfield is in a good position. In the past decade we’ve seen passenger numbers grow 70 percent. During the same period airlines have added four non-stop destinations from Springfield. 

In the meantime, we meet with airlines on a regular basis. During those meetings we make a business case for the service we’re proposing; knowing that the airline may decide that it can make more money elsewhere. But we persist — we make our case, we ask for consideration, and we make sure that we keep Springfield top of mind. 

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