The airport seats that take off and stay away

Bucking the trend of fewer seats, US Airways flights and seat capacity are up in Philadelphia.
Bucking the trend of fewer seats, US Airways flights and seat capacity are up in Philadelphia. (KEVIN P. CASEY / Bloomberg News)
Posted: April 29, 2013

Airlines survived $147-a-barrel oil, a financial collapse on Wall Street, and a recession in 2008 by doing two things: slashing capacity - fewer flights, different-size aircrafts, recalibrated routes - and charging annoying fees for everything from baggage to "choice" seats.

Nationwide, there are 8 percent fewer airplane seats with passengers in them than five years ago, according to airline analyst Daniel McKenzie, of Buckingham Research Group in New York. He recently analyzed which cities got hardest hit with seat cuts and which had the most growth.

Philadelphia was among the top 10 for seat cutbacks on nonstop flights - down 15 percent, McKenzie reported.

Philadelphia airport officials dispute that number, and say the decline was more like 9.7 percent.

So what happened in Philadelphia? Simple: Southwest Airlines retreated.

The spunky low-cost carrier arrived in a blaze of glory in 2004. At the time, US Airways was in bankruptcy for a second time and on the verge of extinction.

But since mid-2008, Southwest has gone from a peak of 71 daily nonstops to 20 cities from Philadelphia to 20 weekday departures to nine nonstop destinations now.

Veteran airline analyst Bob McAdoo, of Imperial Capital L.L.C. in Los Angeles, said that Southwest has dropped nonstop flights from here to 11 cities in the last five years. Among those cities are Pittsburgh; Boston; Hartford, Conn.; Columbus, Ohio; Providence, R.I.; Manchester, N.H.; Jacksonville, Fla.; and Raleigh-Durham, N.C.

Philadelphia airport CEO Mark Gale said fewer airplane seats, called capacity, was due to several factors, including recent airline consolidations and mergers.

The differences

The mergers of Delta-Northwest, United-Continental, and Southwest-AirTran mean, in some cases, fewer flights. Air France and Air Jamaica left this market and Milwaukee-based Midwest Airlines went out of business.

Frontier Airlines, which had operated 11 flights a week, mostly to Denver, now flies just three times a week from here to vacation destinations for Apple Vacations. Apple's own airline, USA 3000, is no longer flying in Philadelphia.

On a bright note, US Airways flights are up 2.3 percent since May 2008 - from 3,068 departures a week to 3,140 now, McAdoo said. Seat capacity is up 6.8 percent on US Airways, in some cases because the airline is flying larger airplanes, Gale said.

Philadelphia has attracted four new airlines in the last year: Virgin America, Alaska Airlines, Spirit Airlines, and JetBlue Airways, which will begin nonstop flights to Boston next month.

Southwest noted on an earnings conference call last week that Atlanta will be a focus city, and not a hub, as it had been for AirTran.

"We want to put our planes where they are going to be the most profitable, and where our customers will choose to fly us," said Southwest spokeswoman Katie Coldwell. "If we are adding flights in a market, you can assume that means demand is strong, and we are seeing a good use of our resources. If flights are being retracted from a market, it may be that the demand wasn't there."

It's hard for an airline to make money in another carrier's international hub.

US Airways has 437 daily departures to 113 nonstop destinations, including 27 international, from Philadelphia.

Southwest does "point-to-point" flying, and must fill planes in Pittsburgh or Boston with enough paying passengers to make the route profitable.

US Airways has a "hub-and-spoke" network. It collects customers from towns, large and small, in the nation's interior and funnels them through hubs in Philadelphia; Charlotte, N.C.; Phoenix; and Washington - and then onward.

US Airways can take a Pittsburgh or Boston passenger on to Frankfurt, Germany, or Tel Aviv, or London. Until recently, Southwest flew only one large Boeing aircraft and had no international flights.

Deepest cuts

Hardest hit in airplane seat cuts have been Cincinnati and Memphis, down 58 percent and 55 percent, respectively, McKenzie reported. Those were former Northwest hubs where Delta has slashed jobs and flights.

New York City area airports have lost 7 percent of airplane seats. Chicago is down 7 percent. Las Vegas is down 11 percent. Orlando is down 13 percent. Los Angeles-area airports lost 5 percent of their airplane seats.

"Capacity is down, and it had to be down," US Airways CEO Doug Parker said in an interview Wednesday."There was too much capacity for the existing demand - and the demand still hasn't come back."

"That's the common theme across all this," US Airways president Scott Kirby said. "Lack of profitability in those markets, and that's where airlines cut."

Charlotte ranks first nationally for growth in seat capacity, up 14 percent in the last five years. Charlotte is US Airways' largest hub.

Parker said the seat decline in Philadelphia "is not a trend" but rather "the result of an airline that was there in a big way - Southwest - that is not there now in a big way."

"We have grown slightly, while capacity throughout the system has come down," Parker said regarding Philadelphia. "It's a great market for us. And the merger with American is just going to make that commitment stronger."


By the Numbers

Air-travel markets experiencing the biggest year-over-year decrease in nonstop, one-way

seat capacity, second quarter 2013 from second quarter 2012.

Market               Seat Decrease        % Change

Memphis                  357,277                  -30.4

Denver                  180,772                   -2.4

Orlando, Fla.            126,304                   -2.6

Milwaukee               116,639                   -9.6

Philadelphia             83,564                   -2.0

Miami Metro             77,402                   -1.2

San Juan                63,451                   -5.8

Colorado Springs          61,561                  -22.7

Atlantic City             59,772                  -28.4

Birmingham, Ala.          57,063                  -10.4

SOURCE: Buckingham Research Group


Contact Linda Loyd

at 215-854-2831 or lloyd@phillynews.com.

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