Posts Tagged ‘airline travel’

Will Delta Return to CAK in September? Changes in Store for America’s Transportation Network

May 25, 2020

When Delta Airlines stopped flying to Akron-Canton Airport more than a week ago, it framed the move as a temporary suspension of service.

Airport officials said Delta’s flights between CAK and Atlanta would return in September.

But not everyone believes that and even the airport’s CEO sees turbulence ahead.

The airport, located in Green between its namesake cities, may be doing well to get back much of the service it had before the COVID-19 pandemic struck.

It has lost 95 percent of its normal traffic and is down to a handful of flights that leave in the morning and return after the dinner hour.

In recent weeks there has been much speculation about what the airline industry and America’s air travel network will look like post-pandemic.

The emergency aid given to the airline industry runs out at the end of September and at that time the industry will no longer be obligated to maintain service to all cities that had it when Congress approved the assistance in March.

Some have predicted airlines will become smaller and have fewer employees and routes than they did as recently as early March.

Some believe that changes are coming to transportation generally.

Connecticut Gov. Ned Lamont told Bloomberg TV the Monday through Friday commute by rail to New York City to go to work “may well be behind us, especially if you can do “two-thirds of your job from home in Stamford.”

Others have argued that having found employees can work from home some companies will rethink the need to maintain large expensive office facilities.

The economic downturn also has resulted in a sharp decline in revenues for state and local governments, which could mean some state-funded Amtrak corridor service may become a casualty.

The North Carolina Department of Transportation, which funded four roundtrips a day between Charlotte and Raleigh before the pandemic, is only paying for one.

In Michigan, Amtrak service has been suspended to Grand Rapids and the Detroit route is down to one daily roundtrip versus the normal three.

Similar service cuts have occurred in Illinois, Missouri and Wisconsin.

Earlier this year, Amtrak was talking about seeking additional funding from Congress that would be used to seed development of new corridors in unserved and underserved areas of the country.

Given the current situation it seems unlikely that intercity rail passenger service is going to be expanding in the next year or two.

The airline industry needed three years to recover from traffic lost following the terrorist attacks of Sept. 11, 2001.

Some predict it will take at least that long for the industry to recover from the pandemic.

Yet if telecommuting and conducting meetings online catches on as the new normal, that raises the question of whether business travel, which is where the airline industry makes a substantial amount of its money, will go back to what it was.

In the meantime, officials at Akron-Canton airport have fallen into survival mode.

Ren Camacho told a reporter for The Plain Dealer of Cleveland that his discussions with airlines these days have switched from talking about including CAK on new routes to trying to persuade them to add back service that has been suspended during the pandemic.

Before the pandemic, Akron-Canton hosted 25 flights a day provided by four airlines to Atlanta, Chicago, New York (LaGuardia), Newark, Houston, Washington (Reagan National), Charlotte, Orlando and Philadelphia.

The airport had seasonal service to Tampa and Fort Myers.

Now CAK has three flights a day with one each to Chicago, Charlotte and Philadelphia that on good days carry 20 to 25 passengers per flight.

It was worse. In late March and early April some flights into CAK carried a mere five passengers.

However, even before the pandemic hit, CAK had been struggling to attract travelers.

In 2012, Akron-Canton hosted 1.8 million passengers. Last year it hosted 834,365.

Much of CAK’s recent woes can be traced to changes happening 50 miles north at Cleveland Hopkins Airport.

For several years Continental Airlines operated a small hub at Hopkins and average air fares from Cleveland were among the highest in the nation.

But after Continental merged with United, the hub closed in June 2014 with United reducing the number of flights and destinations it had from Cleveland.

During the Continental hub days at CLE, Akron Canton Airport marketed itself as a lower cost alternative to Hopkins.

Most of those flights were provided by AirTran, which later merged with Southwest Airlines.

For awhile, Southwest continued most of the AirTran routes, but eventually it consolidated its Northeast Ohio service at Hopkins.

Akron-Canton also attracted low-cost carriers Allegiant, Frontier and Spirit.

Allegiant and Frontier ended service at CAK in favor of expanding service at Hopkins in an effort to fill the void left by service cutbacks by United.

Spirit continued to fly to CAK, but suspended its service there last month although it tentatively plans to return in July.

Some industry observers believe the future for airline service at CAK is bleak.

Transportation analyst Seth Kaplan told The Plain Dealer there’s no guarantee Delta will be back in October, or at all.

“They’re free to do whatever they want,” said Kaplan. “A lot of things aren’t going to make the cut.”

An analysis published by Forbes predicted that as a secondary airport Akron-Canton will struggle even after businesses reopen because there is likely to be less business travel and airlines will be hard pressed to make money.

The analysis drew a distinction between airports versus markets.

In a post-pandemic world, airlines will see Akron-Canton as a subset of the Northeast Ohio market based in Cleveland.

In effect, Delta has made that decision by dropping service to CAK. It presumes that whatever business there is to be had from the region around Akron and Canton can be accommodated by flights from Cleveland, which the carrier sees as its primary airport in the Northeast Ohio market.

The Forbes analysis said airlines are losing more money at secondary airports than they are at primary airports in the same market.

It concluded that although demand will largely, but not completely, return at those primary airports by the end of this year or early 2012, that is less likely to be the case for secondary airports.

The analysis said that historically airlines did well to fill 60 percent of the seats on most flights. But high demand for air travel in the past decade has led to 80 percent or more of seats being filled.

The Forbes analysis said that level of demand is unlikely even after the industry recovers from the pandemic, a process that will be measured in years and not weeks.

In time Delta might return to Akron-Canton but that remains to be seen.

In the meantime, CAK’s Camacho is eyeing using some of the $4 million in a fund established by JobsOhio that was created to help Ohio airports lure new airlines sevice.

However, at CAK, that money will be used to try to get airlines to return service they previously provided.

“The best we can do as an airport is to continue to dialogue with our airlines, to compile the cases to bring back the airlines,” Comacho said.

He said getting the local business community involved is key because corporate business travel is a massive industry.

Comacho is also working with local businesses such as Timken, Diebold and Smuckers as part of the effort to get service back.

“Where do they want to travel, either through this pandemic or post pandemic whether it’s six months from now or two years from now,” Comacho said.

CAK officials are trying to show airlines that there is enough potential business travel from CAK to merit a return of service those carriers once provided.

“The first premise for any airport is to make sure you retain existing service and then how can we build upon that, so we have to be mindful of all of those factors to ensure that we can rebound and rebound quickly,” Camacho said.

Still, he knows this won’t happen overnight.

“By the end of the year, I think we’ll see some uptick in traffic, but it’s not going to be what it was pre-pandemic. I don’t think we’ll get true air service restoration for maybe a year and a half, or two years.”

The timing of the pandemic could not have been worse for CAK. It is working to finish this year at $34 million airport terminal modernization project to spruce up a facility built in 1962.

A study commissioned by the airport last year found that it generates $1 billion in economic impact, including $663 million in direct benefits from airlines, hotels, restaurants, retail and rental car agencies.

The federal CARES Act provided direct assistance to U.S. Airports and CAK received $7.6 million, which Camacho said is enough to tide the airport over for now.

“We are optimistic that the airlines will return,” Camacho said. “The question is, ‘What does that resumed service look like?’ I wish I had a crystal ball, but I don’t.”

It may be that longer term what might save CAK is another coming of low-cost carriers looking to cash in on a finally thriving air market.

It may be that for now many people are unwilling to travel by air but you can’t enjoy a Florida beach or theme park or a Las Vegas casino online the same way you can in person.

If the fare is low enough people will return to the skies. If there is money to be made, airlines will find a way to tap make it.

In the short term businesses may have found that they don’t need offices and can conduct much of their business virtually, but once the pandemic is well in the rear view mirror CEOs might decide that there are benefits to in-person contact and having employees in the same building.

But nothing is guaranteed. The Youngstown-Warren airport was once served by United Airlines. In fact some United flights paired Youngstown with Akron-Canton.

Various airlines have come and gone and Youngstown has been without service since Allegiant pulled out in January 2018. Efforts to find another carrier have yet to pan out.

The “new normal” for air service may in the next three to five years look much different than it did as recently as February, yet that is not to say that “new normal” won’t change.

And if it does CAK officials hope to be able to take advantage of it just as they did years ago.

Until then, Camacho is looking and hoping for incremental progress.

“I think if we get to like 30 or 40 percent more traffic than where we are today, say by the end of the year, I think that’ll be a victory,” he said.

Airlines Don’t Expect Rapid Growth When Pandemic Social Distancing Restrictions are Eased

April 20, 2020

A Spirit Airlines Airbus 320 arrives in Cleveland after a flight from Myrtle Beach, South Carolina. Airlines are expecting low passenger counts even after the COVID-19 pandemic social distancing restrictions are eased or even removed.

Although state officials in recent days have spoken about easing their social distancing orders and allowing some businesses to reopen, airline industry observers expect the demand for air travel to continue to lag.

Some have predicted airlines will become smaller and have fewer employees.

The CEO of Southwest Airlines has reportedly approached his company’s labor unions about making concessions on wages and benefits once the emergency air from the federal government is exhausted and if traffic doesn’t immediately rebound.

Southwest, which is viewed as one of the nation’s best-managed airlines, has never imposed pay cuts or layoffs in its 49-year history.

In a recent message to employees, United Airlines CEO Oscar Munoz said the carrier had fewer than 200,000 passengers in the first two weeks of April compared to more than 6 million during the same period in April 2019.

United expects to carry fewer passengers this May than it did on a single day in May 2019 and to slash flights by 90 percent of the normal schedule.

Munoz expects the return of business after social restrictions are eased to be slow because many will remain concerned about the pandemic and the health risks of commercial air travel.

A writer for The Motley Fool, a financial investment firm, predicts it will take at least two years or longer for the airline industry to the level of traffic it had before the pandemic began.

The writer, who said he is optimistic that the airline industry will survive its economic headwinds, expects air travel demand to be muted for the rest of 2020.

Some carriers might not survive the economic downturn and the fate of others hinges on how quickly the travel market recovers.

The federal emergency aid ends on Sept. 30 and worker layoffs could follow.

United’s management has told its employees to expect a smaller workforce as early as Oct. 1.

American Airlines CEO Doug Parker said bookings for travel later in the summer have shown a slight rise and there may be a gradual recovery in the third and fourth quarters of 2020.

The conditions attached to the federal emergency airline aid has put some carriers in a dilemma.

They don’t want to offer the minimal levels of service that accepting the aid requires, particularly continuing to serve the airports they flew to before the pandemic struck.

The industry apparently thought that the U.S. Department of Transportation would allow them to temporarily drop numerous markets.

But DOT has not been inclined to allow that and has denied all but one of the requests for low-cost carrier Spirit Airlines for exemptions to the serve all airports rules.

Allegiant Air and Sun Country Airlines are also blanching at DOT’s position.

DOT has said that so long as airlines keep one flight to each city they’re in compliance with the law. The flights need not be daily.

Many airlines have fulfilled this requirement by ending all but one flight to some cities.

But discount carriers such as Spirit are unable to reduce 90 percent of their schedules and still meet the law’s intent because they favor typically once a day point-to-point service rather than flying to giant connecting hubs with multiple flights throughout the day.

Low-cost airlines say most of their passengers are leisure travelers and that market is virtually non-existent right now.

A recent story in the Los Angeles Times said that those still flying include airline workers going home after work shifts, medical staff traveling to regions hit hard by COVID-19 outbreaks, some business travelers, and people going to help family members affected by the pandemic and social distancing measures.

Some travelers are also heading home after having vacations, school terms and work assignments cut short by the pandemic.

The Times report said those flying in recent weeks described the experience as a mixture of anxiety over the increased risk of being exposed to the virus and amazement at near empty airport terminals and airplane cabins.

Airline officials say it is difficult to determine which passengers aboard their flights are flying out of necessity versus leisure travelers.

Far less affected by the pandemic have been cargo carriers that are operating pretty much their scheduled flights.

In some instances, passenger airlines are using their planes to fly cargo.

Food service aboard flights, even in first class, has been eliminated or reduced to box meals in order to minimize contact between passengers and flight attendants.

With so few passengers flying, there is plenty of room for those aboard to spread out as a form of social distancing.

“They pretty much sit there and watch movies on their computer and sleep because they have an entire row to themselves,” said Rock Salomon, an American Airlines flight attendant based in Boston. “My last trip to Phoenix had less than 20 passengers on each leg.”

Although airlines are not mandating passengers to wear gloves or masks, they have encouraged that practice while allowing flight attendants to wear them while interacting with passengers.

In the meantime, another battle has begin over refunding canceled tickets.

Airlines are generally offering passenger who cancel flights during the pandemic travel vouchers rather than cash refunds.

Three U.S. senators issued a statement saying the industry is sitting on $10 billion in travel vouchers.

The senators said airlines have been obfuscating the right of passengers to receive a cash refund by offering travel vouchers as a default option and requiring passengers to take burdensome steps to request refunds.

New agency Reuters said it reviewed the responses the senators received from the nation’s major airlines as to their refund practices and found that most carriers did not share the total value of the travel vouchers and credits they have issued during the pandemic.

Some carriers said they are following U.S. Department of Transportation guidelines which require cash refunds if an airline cancels a flight.

But only Allegiant and Spirit indicated they are offering cash refunds as a first option for passengers who voluntarily cancel their tickets.

Low-cost carrier Sun Country said offering cash refunds to all passengers who cancel their reservations “would put the company’s future at risk.”

American Airlines said more than 90 percent of its passengers who were offered a refund for flights the company itself canceled chose that option over a travel voucher.

Some of the travel vouchers that passengers who do not specifically request a refund are being issued will expire within a year.