Struggling to Stay Aloft
Wednesday, August 20, 2008
LYNCHBURG, Va. -- American cities have long viewed a thriving commercial airport as a source of civic pride, a way to attract businesses and jobs, a selling point promising an easy connection to the outside world. Any community vibrant enough to support a respectable airport, the thinking goes, is a community that counts.
At the Lynchburg Regional Airport, travelers are welcomed with a dome in the style of Monticello and the words of Thomas Jefferson etched across the floor. Exposed steel beams slope against heavy brick arches, visually weaving the city's heritage with lofty aspirations for the future.
Now Lynchburg and other small-city airports, which represent the majority of the nation's 524 airports with commercial service, are under threat. Airlines are cutting back service to keep their businesses alive as they confront economic contraction and volatility in oil prices. Smaller airports are vulnerable because they rely on smaller, more expensive planes and with fewer passengers have less economy of scale. Airports are putting together contingency plans for service cuts of up to 50 percent. They are halting expansion projects, freezing hiring and trying to preserve what service they've got.
Despite millions of dollars spent to improve Lynchburg's airport, departures have fallen from 20 a day a decade ago to just six. Airlines are so reluctant to fly here that Lynchburg can't pay them to come. The airport is dangling a $405,000 incentive package to get an airline to connect the city to a big hub to the north, such as Dulles International Airport or Philadelphia International Airport. The largest part of the package is $250,000 from a small community air service grant from the Department of Transportation. Mark Courtney, the airport director, has met with three airlines to discuss the offer. So far, none has taken the bait.
Passenger traffic continues to slide. The number of passengers boarding planes at Lynchburg in 2007 was 55,675 -- about half of the peak number in 1994, two years after the new terminal opened.
"We've reached the low-water mark," Courtney said. "We can't afford to go any lower."
Collectively, the major U.S. airlines lost $2.8 billion in the first half of the year, according to the Air Transport Association, the airline industry's lobby group. To stem losses, carriers have announced an 8 to 15 percent reduction in flights set to begin later in the year. Aviation analysts predict deeper cuts if oil prices start increasing again after falling over the past five weeks. Jet fuel prices have increased as much as 50 percent this year, compared with a year earlier.
Even before this year's oil spike, airlines were hunkering down at the nation's 30 largest airports, which account for the majority of U.S. passenger air traffic. But most of the nation's commercial service airports are Lynchburg's size or smaller. They are the ones that will suffer.
"If you have a 10 percent cut at a place like Dulles, the typical passenger doesn't feel it," said Keith McCrea, manager of air service and policy at the Virginia Department of Aviation. "If you have a 10 percent cut at a smaller airport -- all of a sudden, boom. It might mean one of their five flights is going, or two of their five flights is gone."
For the nation's smaller commercial airports, he said, the situation is only going to get worse if oil prices stay high. "After Labor Day, it's no secret that we will be looking at another set of capacity reductions," McCrea said.
The Lynchburg airport dates to 1931. It's right outside of town on the site of a former farm, one of the few flat expanses of land in the area's hilly terrain. Rex Hammond, president and chief executive of the Lynchburg Regional Chamber of Commerce, thinks the area has lost new business prospects as air service has declined.
"For a business that wants to come to a community, it's not so much what they are looking for, it's finding a fatal flaw," Hammond said. "If you're knocked off the list, you'll never know it. A community that doesn't have a vibrant airport is operating under a competitive disadvantage."