Can anything be done to reverse the fortunes of the Colorado Springs Airport?
The answer might lie with airports in Grand Rapids, Mich., Long Beach, Calif., and Madison, Wis., where boardings are on the upswing.
The three airports, plus a fourth in Tucson, Ariz., are the focus of a task force that is studying ways to persuade airlines to offer more low-cost flights out of Colorado Springs.
Like the Colorado Springs Airport, these airports face competition from a major hub within 150 miles - Grand Rapids from Detroit, Long Beach from Los Angeles International, Madison from Milwaukee and Tucson from Phoenix. Yet all but Tucson increased passenger numbers between 2008 and 2012, according to reports from the Bureau of Transportation Statistics. Average fares for the second quarter also declined at the four airports compared with a year ago, the bureau said.
The primary difference between the Colorado Springs Airport and the ones being studied by the task force: All four had major service from at least one low-fare carrier.
In fact, that's a common theme among airports where business is soaring. According to a Gazette analysis of Bureau of Transportation Statistics data, the 10 fastest-growing airports in the U.S. from 2008 to 2012 had low-fare carriers start or significantly expand service.
A just-completed study by the Colorado Springs Airport's new marketing consultant, Virginia-based Seabury APG, reinforced that point. The $78,000 study found that nearly 2,000 people a day, or 47 percent of airline passengers traveling from the Colorado Springs and Pueblo areas, drive to Denver to catch flights, primarily because of the low fares. The availability of nonstop flights proved to be far less important.
An online survey of nearly 5,000 people in June and July by vacation-package provider Allegiant Air came up with similar results, finding that 87 percent of respondents are willing to drive to an airport that is "a little farther away if it meant saving significant money" on an airline ticket.
But having the numbers to support what might seem obvious - consumers want low fares - doesn't provide a blueprint for attracting low-cost carriers. That's where a study of other airports comes in.
Grand Rapids lesson
The airport that may provide the most instructive lesson for Colorado Springs is the one in Grand Rapids.
The Gerald R. Ford International Airport was in much the same place in 2007 as the Colorado Springs Airport is today. It had no low-fare carriers. Passenger numbers were declining amid flight cuts by Delta Air Lines. Travelers from Grand Rapids were hitting the road to Detroit or Chicago, where the average fares were $125 to $150 lower.
That prompted Dick DeVos, a former CEO of Amwayand resident of the Grand Rapids area, to organize an effort in late 2008 to expand airline service and bring down fares at his hometown airport. The result was the formation of the Regional Air Alliance of West Michigan, which included representatives from more than 60 high-powered companies.
The alliancestarted by compiling corporate travel data it shared with airlines to persuade them to start or expand flights in the region.
"We met with all carriers and showed them with data on how they could serve this market profitably," said Dan Wiersma, executive director of the Regional Air Alliance of West Michigan. "We were able to provide them information on the market on travel patterns including frequency, destination and demand profiles that allowed them to have access to information they could not get any other way that reduced the risk of them entering the market."
Those efforts paid off quickly. Allegiant launched service to Grand Rapids in 2009. A year later, AirTran began service to Grand Rapids from the Baltimore/Washington and Orlando international airports. To remain competitive, other carriers matched the airline's cut-rate fares and added flights.
Eventually, the difference in fares compared with Detroit narrowed by about three-fourths,and business at the airport turned around.Passenger numbers jumped 17.7 percent from the end of 2008 to the end of 2012 and continued to increase this year, largely as a result of low-fare giant Southwest Airlines launching service in August.
Southwest, which acquired AirTran, announced this year that it would double the number of daily flights to six and add Denver and St. Louis as destinations. The shift boosted passenger numbers by 9.4 percent in September, the first full month of September service.
The alliance estimates it has saved western Michigan residents $100 million. By the end of the year, the group will shut down. From the fruits of its labors, average fares in Grand Rapids have dropped to within $21 of the average fare in Detroit and $73 in Chicago.
Each of the four airports under the task force's microscope employed a different strategy to boost traffic and bring down fares, with Grand Rapids reaping the biggest rewards.
Long Beach Airport, just 20 miles from Los Angeles International Airport, had a 10 percent increase in passenger numbers from 2008 to 2012.
Long Beach Airport is served by low-cost carrier JetBlue, which has rights to about three-fourths of its takeoffs and landings. In 2009, JetBlue threatened to cut flights unless the airport renovated its aging terminal.
Long Beach spent $45 million to build a new concourse that opened nearly a year ago, with features that include a wine bar with fire pits, a sushi counter and a security checkpoint designed to speed travelers from their car to the gate in 20 minutes.
Airport director Mario Rodriguez attributes the rise in passenger numbers to the "resort hotel feel" of the new airport, which he says provides a competitive edge against LAX. Ultimately, though, JetBlue's low fares are what bring people in the door.
In Madison, passenger numbers grew 9.8 percent from 2008 to 2012, helped by low-fare service from Frontier and a strong local economy that has fueled growth among the city's major employers. The Dane County Regional Airport also expanded its passenger terminal, renovated its parking garage and launched a marketing campaign to combat the perception that travelers could fly for less out of Milwaukee or Chicago.
The fourth airport being studied by the Colorado Springs task force, Tucson International Airport, continues to have many of the same battles as the Colorado Springs Airport. Its passenger numbers have been declining for five years, but for different reasons. The airport lost half of its nonstop destinations in 2008 when regional ExpressJet Airlines halted a brief experiment of operating as a separate airline, instead of flying shorter routes for major carriers like United.
Tucson loses about 20 percent of its passengers to Sky Harbor International Airport in Phoenix, where Southwest and U.S. Airways engage in frequent fare wars. But fares in Tucson were just $34 higher than those in Phoenix during the second quarter and just $1 more than the national average, according to the Bureau of Transportation Statistics.
Limited options, some say
Damon Hylton is president of The Quotient Group, one of the consultants hired by the airport to improve its marketing efforts. His take: Colorado Springs still has a lot of work to do to attract low-cost carriers.
"Grand Rapids obviously won the lottery in terms of low-fare service. Colorado Springs is way behind the curve in terms of marketing and community support," Hylton said. "There aren't a lot of low-cost carriers who could come into Colorado Springs right now, but we have to get the community ready for that time."
He said that airport backers need to get better organized and create the communications channels to provide airlines with better information.
Seabury and Quotient representatives are meeting with corporate travel managers to better understand why business travelers fly from DIA instead of Colorado Springs, and gauge what type of air service top local employers need.
But two consultants not associated with the Colorado Springs effort - Scott Hamilton, managing director of Seattle-based aviation consulting firm Leeham Co. LLC, and Mike Boyd of Evergreen-based Boyd Group Inc. - say the airport has limited options for attracting additional air service.
Hamilton said an investment group that is buying Frontier with plans to turn the airline into an "ultralow cost carrier" might consider the Springs for new service. But most other low-cost carriers are committed to serving Denver and operate under business models that target large hub airports rather than smaller airports within a drive of an hour or two, he said.
"The opportunities in the airline industry are very limited because the industry is cutting service and not adding new flights very often," Hamilton said.
Southwest, however, serves Detroit and Grand Rapids, which are about two hours apart.
Boyd said the best hope for new service might be persuading JetBlue to offer a late-night flight to New York or Allegiant to begin service to one of its destinations in Florida once it starts taking delivery of longer-range jets scheduled to begin flying next year.
Whether the airport task force and city leaders agree may not be known until the group finishes its work late this year. Task force members were not available for comment.
Contact Wayne Heilman: 636-0234
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Numbers from the Colorado Springs Airport
• Passenger numbers have declined 20 percent or more every month since Frontier’s departure in April.</p>
• Average airfares in the second quarter increased by
11.5 percent, the biggest jump among the nation’s 100 largest airports. </p>
• The price of a round-trip flight in the April-to-June quarter rose nearly $46 from a year ago to $444.68 and was 17.8 percent higher than the national average. That made the Colorado Springs Airport the 11th most expensive among the 100 largest airports. At the same time, average fares at Denver International Airport fell 2.5 percent and were $120.96 less than the average fare in the Springs, the report said.</p>
• Officials are restructuring the airport’s operations and finances to stabilize and perhaps reduce the fees and other charges paid by airlines. The airport now charges airlines about $9 per departing passenger; the moves could lower those charges to as little as $6 — or about 14 percent less than the national median of $7.</p>
• Four of five top destinations for southern Colorado passengers leaving from Denver also have nonstop service from the Springs.</p>
Destination Colorado Springs: Our airport’s future
What: A free community conversation on the Colorado Springs Airport
When: 6-8:15 p.m. Tuesday
Where: Colorado Springs Airport East Terminal Unit
Who: Panel discussion moderated by Katie Carrol, The Gazette’s director of communications and public relations. Panelists include Dan Gallagher, the airport’s interim director; Damon Hylton, president of The Quotient Group, a marketing consultant to the airport; Steve Bartolin, president and CEO of The Broadmoor hotel and a member of the city’s Airport Air Service Task Force; Chris Thornton, chairman of the Colorado Springs Airport Advisory Commission; and Kathy Boe, founder and CEO of Colorado Springs-based defense contractor Boecore Inc. and a frequent flier.
Agenda:Panel discussion from 6-7:15 p.m. Small group discussion led by Food for Thought from 7:15-8:15 p.m.
Parking: Tickets from short-term lot will be validated by airport staff.