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Armstrong International Airport Soars in Strong Headwinds - 7/1/2013 -
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A recent study by the Massachusetts Institute of Technology
International Center for Air Transportation published in the Wall Street
Journal has found that airline mergers, a deep recession and surging
fuel prices have led to sharp cuts in airline service around the nation.
During the period of 2007 to 2012, scheduled domestic flights have been
cut by 14% with the number of seats dropping slightly less. These
reductions in service are the result of the airlines eliminating
less-profitable routes. This has been particularly bad for 35 medium
size airports that have lost an average of 26.2% of their flights in the
five-year period, while the number of seats declined simultaneously by
21%. Many airlines have also replaced multiple flights of small, 50-seat
planes with one or two flights using larger, 76-seat planes, the study
noted. Pushed by rising fuel prices, airlines are focused on "capacity
discipline”: flying fewer flights and making sure the planes are full. I
am happy to report that here in New Orleans we are "flying” in the
opposite direction. In fact, New Orleans is the only mid-size city that
has gained service in 2012 over 2007 and the increase is continuing. In
March, our total passenger activity was 8.2% greater than March 2012
with 842,954 passengers, the total airline passenger activity for the
year was 5.1% greater than YTD 2012 with 2,231,415 passengers, the March
average daily departures were 10% greater than March 2012 with 137.3
departures and the March daily carrier seats were 10.5% greater than
2012 with 16,948 seats and 8% greater than other U.S. Airports.
Gaining
flights and more passengers was not the only accomplishment of New
Orleans in the area of air service, our fares have been consistently at
the bottom of the third quartile of the top 100 U.S. Airports for some
time. This fact makes air travel to and from New Orleans more
affordable. A Bureau of Statistics 4th quarter 2012 Average Domestic
Fare Study recently released has ranked the New Orleans market 66th in
low fares with 100 being the lowest. This is made possible by the fact
that the New Orleans market has attracted a number of low cost carriers
due to low operating costs; the newest among them is SPIRIT Airlines
with daily service to Dallas (DFW), whose unique operating model is
empowering their customers to save money on air travel by offering
ultra-low base fares with a range of optional services for a fee.
SPIRIT’s low fare approach appears to be a key in their high load
factors and another reason we continue to expand our market share.
When
I joined the MSY Team in May, 2010, I was approached by a Southwest
Airlines officer with a request to help reduce their operating expenses
at Armstrong International by lowering the Cost Per Enplanement (CPE).
The CPE is composed of all landing fees, airside usage charges, fuel
flowage fees, terminal rents and other airline payments divided by
enplaned passengers. We told him that our goal was to lower the cost
between $8.00 and $9.00. He said they would be ecstatic if we could just
bring it under $10. Since that time, the New Orleans Aviation Board
(NOAB) and staff have taken the necessary steps to decrease the CPE from
a projected $16.31 in 2014 to under $8.41 today. Needless to say
Southwest Airlines, who happens to have over 35% of the passenger load
at our airport, is very pleased with the our efforts. They are so
pleased that they continue to add new non-stop destinations such as Key
West this spring and Austin this fall to their New Orleans’ lineup.
In
other airport news, I am pleased to introduce the new Chairwoman of the
NOAB - Ms. Cheryl Teamer. Ms. Teamer is the first woman to serve in the
Chair position on the Aviation Board. She was elected by the other
board members in the May NOAB meeting and Mr. Doug Thornton was
re-elected to the position of Vice-Chairman. Ms. Teamer is a New Orleans
native and was appointed to the board on January 19, 2012 by New
Orleans Mayor Mitch Landrieu. Aviation Board members are appointed to
five (5) year terms and serve without compensation. Ms. Teamer is an
attorney with more than twenty years of experience and is the founder of
Teamer Strategy Group, focusing on advocacy, business development,
event coordination, government relations, project management and
strategic planning. She is a civic leader that has dedicated a big part
of her life to helping our region. She replaces outgoing Chairman Nolan
V. Rollins, who accepted a position as the President & CEO of the
Los Angeles Affiliate of the National Urban League.
Finally, the
NOAB and staff are working to provide the best services and non-stop
destinations our passengers want at Louis Armstrong New Orleans
International Airport. We welcome the opportunity to make your airport
experience a pleasant one the year round as we continue trending upward
in air service.
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