No Fly Zone: Cities Hit Hard by Airline Crisis

June 2, 2008— -- A bird's-eye view of today's airline industry shows that high fuel prices have dealt a heavy blow. The price of doing business has resulted in bankruptcies, cutbacks, even US Airways' decision this week to ditch the pretzels to get rid of extra weight that burns more jet fuel.

But as summer begins, which parts of the United States will be hard hit by the air travel industry's difficulties?

Data shows the the airline industry's problems are hitting cities large and small. According to airline consultant Michael Boyd, what's happening is "basically a chainsaw being taken to a lot of markets.

"They've done that already. It's just more and more markets are becoming unprofitable," Boyd said.

Some cities that exemplify the air travel industry's financial crunch include:

HONOLULU, HAWAII

The airline industry's struggles are apparent in large cities as well as small ones. Honolulu is a clear example of what happens when a city, and in this case an entire state, relies on carriers that suddenly go bust. This spring, Aloha Airlines shut down its operations, followed two days later by ATA, which also served the islands.

"The biggest city that's going to be hurt the most at the moment is going to be Honolulu," said Rick Seaney, president and CEO of FareCompare.com. "The prices are up dramatically since Jan. 1 of this year."

Data from Official Airline Guide-OAG found that June seats out of Honolulu are down 18 percent since last year, which is creating a ripple effect to other Hawaii destinations. Compared to last June, seats on flights out of the island of Maui's largest airport, Kahului, are down 21 percent. The number of seats out of Hilo is down 27 percent. Out of Kona, seats are down 28 percent, and out of Kamuela, seats are down 61 percent.

"Unfortunately, unfair competition has succeeded in driving us out of business, bringing to an end a 61-year-old company with a proud legacy of serving millions of travelers in the true spirit of Aloha," said Aloha Airline's release announcing the shutdown. "We realize that this comes as a devastating disappointment to our frequent fliers and our loyal business partners who have supported this company for many, many years."

TOLEDO, OHIO

About 60 miles from Detroit, Toledo is one of several midsize cities within 100 miles of a larger hub that still have service, but less of it. Effective May 1, Delta Airlines stopped flying from Toledo to Atlanta because of the rising cost of jet fuel. Delta also stopped flying one of its smaller flights to Cincinnati.

Data compiled by OAG revealed that the number of seats available out of Toledo in June 2008 will be down 13 percent from the number offered in June 2007.

"It is important to understand that the decision to terminate our current once daily Atlanta flight is not being caused by the lack of support from our community; however it is a direct result of soaring operating costs," said Eric J. Frankl, airports director for the Toledo-Lucas County Port Authority in a statement announcing the plans.

The numbers stack up similarly at other midsize airports close to larger hubs. About 90 miles west of Detroit, several carriers reduced service out of Lansing, Mich. According to OAG, seats out of Lansing are down 15 percent from June 2007 to June 2008 -- from about 32,000 to 27,000.

"What we're looking at is reduced access, not necessarily total loss of air service," Boyd said. "It's entirely because of fuel."

ERIE, PENNSYLVANIA

Erie, Pa., exemplifies what's happening at airports slightly farther from major cities.

"Any midsize market where an airline is accessing traffic there to a hub that's more than 100 miles and they're doing it with small jets, it's a candidate," Boyd said.

About 100 miles to Cleveland and Buffalo, and farther to Pittsburgh, Erie still offers flights to places like Cleveland, Detroit and Philadelphia. But since last summer, travelers out of Erie can no longer opt for Delta and can no longer fly to Atlanta. Seats out of Erie are down 19 percent, from about 18,900 to 15,400, since June 2007, OAG reported.

"The smaller markets are really the ones that are getting squeezed the most -- the Lansings, the Eries, the Toledos," said Kris Nichter, director of marketing, business development and community affairs at Toledo Express Airport.

OAKLAND, CALIFORNIA

OAG calculated that seats out of Oakland will be down 15 percent -- from 868,390 last June to 738,383 this June.

In large measure, the loss is because the airport lost three airlines this year when Aloha, ATA and Skybus airlines filed for bankruptcy. In Oakland Airport's media relations department, Rosemary Barnes said that between those three airlines, Oakland lost 12 flights and more than 1,800 passenger seats per day.

Other airlines have also reduced service, said Barnes. Among the reasons: high fuel prices and slow economic growth.

But new service has also arrived in Oakland this year, offsetting some of the losses. For instance, this month Hawaiian Airlines launched a daily flight from Oakland to Honolulu, and Southwest Airlines added a daily flight to Austin.

Nonetheless, a bit less service remains in store for Oakland after the summer. In early May, American Airlines announced it would stop serving the airport from which it currently operates three flights each day. That change is not scheduled to take effect until early September. To deal with high fuel prices and a tough economy, American announced May 21 that it would cut costs by significantly reducing its fourth-quarter capacity by 11 to 12 percent.

BAKERSFIELD, CALIFORNIA

Even in Bakersfield, Calif., where OAG estimated a 12 percent increase in seats this June, travelers are not immune to cutbacks.

According to ABC affiliate KERO, the carrier Mexicana announced in March 2007 that it was stopping its service from Bakersfield to Guadalahara. More cutbacks are on the way for Bakersfield in August: U.S. Airways recently announced it would stop service to Las Vegas, and ExpressJet announced it will pull out of Bakersfield then, ending service to San Diego and Sacramento.

Still, for now the service additions outweigh the cutbacks. United has added service from Bakersfield to Denver, and US Airways has switched to larger aircraft out of Bakersfield that holds more people.

WILMINGTON, DELAWARE

A small airport close to big cities, Wilmington's New Castle Airport is an example of a place that's lost service this year altogether, as commercial flights have ceased operations at the airport. Wilmington is shoved between East Coast hubs like Philadelphia, Baltimore and New York. The airport is also a 10-minute drive to an Amtrak train station with 90-minute connections to New York and Washington, D.C.

Wilmington isn't the only city hit. According to the Bureau of Transportation Statistics, 36 other tiny airports have seen their numbers sink this year to zero scheduled commercial departures.

Wilmington never had too many seats available, but now only charters leave the runway. Last June, the airport had nearly 3,000 commercial seats available leaving the airport; this June, it has none, according to numbers compiled by OAG.

NEXT UP: WASHINGTON, D.C.?

If United and US Airways were to merge, Boyd and Seaney agreed that Washington, D.C., could take a hard hit.

According to Seaney, United and US Airways' routes out of the Washington area overlap quite a bit, meaning the carriers may face choices about whether to consolidate those routes should they merge.

"If it occurs, it's going to hit Washington, D.C. the most," Seaney said.