Airline woes pinch Arizona tourism

PHOENIX -- Airline flight cuts and higher airfares this fall will bring fewer visitors to Arizona, delivering a punishing one-two punch to the state's limping economy.

In Phoenix, more than 1 of 10 flights are gone from a year ago. Nearly 70 daily departures have disappeared from Sky Harbor International Airport's schedule, the equivalent of losing service from almost every major airline except US Airways and Southwest.

Fewer seats for sale means airlines can charge more. Tickets for Phoenix flights departing in October are up an average 28% from a year ago, according to Farecast.live.com. Flights to Boston and Chicago are each up 50%.

In a tourism hotbed where the majority of visitors arrive by plane, fewer flights and higher fares mean fewer customers for hotels, restaurants, spas and golf courses.

At risk: A substantial slice of $19 billion in annual visitor spending in Arizona.

This comes after months of reduced numbers in hotel occupancy and airport traffic as people struggle with a plunging stock market, the housing meltdown and other economic woes.

"We know we're in for a period of some rough times," said Steve Moore, chief executive officer of the Greater Phoenix Convention and Visitors Bureau.

The fuel factor

Airlines are trying to find their footing against soaring fuel prices. When oil was near its peak of $147 a barrel this summer, US Airways said its fuel bill was running $2 billion a year higher.

The flight cutbacks, which began after Labor Day, are designed to cut airlines costs and force fares higher. The size of the cuts vary by airline and airport, with a handful of carriers slashing 10% or more of their U.S. seats this fall.

The cutbacks after the Sept. 11 terrorist attacks were deeper but temporary. Most airlines' flight schedules returned to normal within months.

US Airways CEO Doug Parker said these flight reductions are permanent as the industry adjusts to the likely reality of permanently higher oil prices. Prices have retreated below $100 since summer, but the airline's fuel bill is still running $1.6 billion higher than a year ago.

The fallout for Phoenix, where US Airways is the busiest carrier: 11% fewer seats overall, slightly above the national average for airports.

The city is losing non-stop service to a handful of destinations, including Birmingham, Ala.; Little Rock; Eugene, Ore.; and Cedar City, Utah.