Air service in the United States has become very interesting in recent years. Delta and Northwest Airlines merged forming a larger carrier in 2008. Following that there was a roller coaster of other mergers occurring throughout the years: Frontier/Midwest, Southwest/AirTran, United/Continental and soon the possibility of the New American. This activity has definitely taken its toll on the U.S. aviation industry and smaller communities in particular.
Newly merged airlines concentrate efforts on cost control and being competitive, and they have a tendency to cut flights in smaller markets. Because smaller aircraft are more costly to operate and oil prices continuing to rise, these new airlines are often forced to trim their fleet of smaller aircraft, which are heavily used in smaller markets.
St. Cloud, Minn., is a good example of a community impacted by mergers. St. Cloud is a typical college town of around 60,000 people. It is an hour-and-a-half drive from the Twin Cities. Northwest Airline’s business plan included servicing many small communities in Minnesota and St. Cloud was one of those locations. For more than 15 years, the St. Cloud Regional Airport was serviced by Northwest Airlines. The carrier averaged four to five flights a day through St. Cloud, typically using on a Saab 340 propeller plane. The aircraft had 34 seats and the flights were connecting through Minneapolis where the airline had its largest hub.
But when Delta Airlines and Northwest merged, it changed everything. Airport Director Bill Towle states, “Following the merger, the new Delta had a different business plan. Air service to smaller communities was no longer part of the plan.” Therefore St. Cloud was cut from the carrier’s route map--leaving St. Cloud without an air carrier.
Many other Minnesota cities also lost air service.“Delta did the same thing to other smaller communities in the state,” Towle says. “For those airports that were part of the Essential Air Service (EAS), Delta sent a letter of intent to the FAA to cancel or terminate service. However, St. Cloud did not have air service in 1978 and was not eligible for the EAS.”
Band Together
With the loss of its main carrier, it was essential that the airport and the city to work together to bring back service to the growing community.
The airport performed a passenger-demand analysis study and attended air service conferences to establish relationships with airlines. Through these efforts, the City of St. Cloud and the St. Cloud Regional Airport identified a need for flights to Chicago O’Hare International Airport. The airport is currently pursuing a major carrier to provide this air service.
The airport applied for and received a $750,000 Small Community Air Service Grant in 2011. Plans are to use this grant to offset the loss an airline would incur when starting new airline service in St. Cloud. It is hoped that these funds will help the airport attract airline service by reducing or eliminating an airline’s risk. The funds come with a couple caveats, however. The airport has just three years to use the grant or it will be lost, and it must be used specifically to obtain air service to O’Hare.
Besides the grant, the city and the Greater St. Cloud Development Corporation have teamed up to start a Travel Bank, designed to get area businesses to pledge to fly out of St. Cloud if an airline offers service to Chicago. “The Travel Bank pledges are very important to attracting air service,” Towle indicates.
To date, this partnership has been a huge success. The Travel Bank hoped to receive $5 million in pledges but it received well over $6 million, according to Towle.
“The collaborative effort between the business community and the region in general shows we want air service. What businesses committed in pledges is a guarantee of only a portion of their travel budgets,” he explains.“With the installation of reliable, cost-effective service, much more could be expected.”
The Travel Bank shows airlines that the airport would be used by local companies and that they have the funding and the data to prove it.
Other steps to restore air service have included attending air service conferences, such as Jumpstart and Network USA. The airport’s terminal also has been remodeled to attract air service. This renovation included expanding the terminal’s gate hold area, so that if two airlines were flying at the same time, there would be enough seating for passengers. Rental car counters and a baggage claim area were also added.
Landing a Successful Launch
While attaining service to Chicago is a primary need, the airport did not limit its talks to just major carriers. In 2012, the airport successfully landed low-cost carrier Allegiant Airlines, which offers two flights weekly to Phoenix-Mesa Airport. According to Micah Lillard, public relations specialist at Allegiant, “St. Cloud has been a great route for us. We were happy to offer a convenient, low-cost option for residents headed to the Phoenix area.”
Landing Allegiant didn’t happen quickly. According to Towle, “We talked to the airline for several years before St. Cloud became low-hanging fruit.”
There were many issues outside of the airport’s control that slowed the talks. Long distance travel to Phoenix on a smaller plane like an MD 80 is not the most fuel-efficient so high oil prices were a barrier, Towle explains.
Currently Allegiant operates a 156-seat Airbus A319 aircraft for its St. Cloud flights instead. “Throughout our network,” Lillard says, “we aim to fill 90 percent of our seats.”
The airport hopes their work with Allegiant provides flight data that will attract other airlines to the airport. And, they are hopeful that Allegiant will find success with its current routes and add more flights from St. Cloud to other hot spots. However, just the presence of Allegiant Airlines is a plus in attracting more service, Towle stresses.
Eye Toward the Future
The future growth of air service at St. Cloud Regional Airport depends on many factors. First, airlines have to look at expanding. After all the merger activities begin to wind down, adding flights and expanding into new areas may begin to happen. Then, the airlines will have the ability to evaluate their route maps, where they overlap and what new flights to consider. The price of fuel also plays a significant role in the process. If oil prices rise, airlines may continue to phase out smaller aircraft, in essence hurting the chances of smaller communities in restoring airline service. Lastly, the city and the airport must continue to pursue and gather local support to convince an airline that the community is ready for new air service.
Smaller community airports can learn a lot from St. Cloud’s experiences. For instance:
- Gathering data and going after local businesses proves to airlines that the community is in support of regaining air service and would adequately and consistently use such services if flights returned.
- Towle advises other communities and airport managers to “be persistent.” It takes many talks and much time before doors are opened.
- He also indicates that communities must know their market. “Passenger-demand analysis studies must be thorough and kept current,” he says. The airport must prove that the population can support air service and the service sought must be in line with what the business community and residents will use. Support must come from the business community–not just the airport manager. “It takes a village to bring air service in,” Towle chuckles.
It may take many years before smaller communities can put their cities back on the aviation map. However, over time as airlines are fully merged, the economy picks up and oil prices stabilize, we may see airline services return to smaller markets. Until then, airports officials and their business communities must continually work to prove to airlines that there is a need and an opportunity in their community.
