ECoastLife Updated Opinion

Sat, 14 May 2005 19:40:21 GMT

Airport Traffic De-Mystified

My Letter to the News Herald, May 14 :

Your story on May 14 (no link, $ubscription) did not cover the airport board's full discussion about the travel market in Bay County, and I do not think analysis requires speculation.

This is not an "equipment" problem - the cancelled flights only account for a fraction of the decline, and some if not most of those passengers were flown on later flights.

This is a market issue. The airport has not met any of its traffic forecasts since 2000, when 217,000 enplaned were forecasted for 2005. The actual traffic for 2005 is tracking toward 190,000 enplaned, about 12% (three years) behind the forecast.

It is pretty clear that several adverse factors are in play. First, the forecasts were too high - FAA has reduced its forecast but our airport consultants continue to raise theirs in pursuit of a new airport. Second, the transition of hospitality units from "motels" to condos (and the demise of entertainment venues) has dampened the Spring Break and seasonal market, at least for now. Third, some potential visitors believe hurricane damage is substantial, and they avoid unpleasantries like beach dredging. Fourth, the early convening of schools has abbreviated the summer season. Mr. Patronis commented that his restaurant business is down 11,000 visitors from 2004, a figure exceeding the decline in air passengers because most visitors drive.

It is true that Delta and Northwest have limited the seats compared to some markets, but this will continue as long as the alternative markets are also dominated by Delta/Northwest (Delta and Northwest have code-sharing agreements that effectively make them one network). Delta/Northwest gets the revenue regardless of the airport selected in the region. Both Okaloosa/Eglin and Tallahassee are substantially larger markets than Bay County and their traffic is growing briskly, yet they have not been able to sustain a low-fare competitor. Airlines discount some seats in these markets because even they cannot fill mainline airplanes at full fares. Currently, there is very little difference in fares among the markets, and the financial condition of airlines may lead to even less competition.

This is not a problem that can be solved by a local airport. Air traffic in Bay County will grow as the economy grows, and airport infrastructure is not limiting the economy, as shown by recent activity. In 2001, we had 22 to 24 airline departures daily - now we have 13, due to introduction of larger regional-jet airplanes to handle the modest growth. Restoring the schedule to 22 per day, using regional jets, would add capacity for 165,000 additional enplanements (to a total of 355,000, or approximately the year-2025 forecast). Blending in 3 to 5 737's would raise the capacity to the 2030 forecast and beyond. All of this flying will be LESS THAN 25 AIRLINE DEPARTURES OVER A 16-HOUR DAY, and less than two departures per hour. This growth pattern is typical of non-hub airports all over the country, until they reach the market size to sustain a low-fare airline, which for us is about 2030. These traffic statistics are common knowledge among airlines. Traffic, not local aspirations, will drive airline route decisions. Of all our local infrastructure, the airport has the most unused capacity and lead time.

Sat, 11 Dec 2004 17:11:22 GMT

US Air Express Quits Bay County and All Florida Service

US Air Express announced this week that most service in Florida is being discontinued. For Bay County, this means six less departures daily (three to Orlando and three to Tampa).

Bay County had 21 airline departures daily when the Feasibility Study to relocate the airport was issued in 2000. With these US Air reductions, we now have TWELVE daily departures, all served by Delta and Northwest. Delta and Northwest operate under code-sharing agreements that provide common route structure and pricing, so effectively Bay County is now part of only one airline route system. Delta Connection's new service to Orlando should benefit from the ex-US Air traffic.

Since the traffic forecasts only show FOUR new flights required by 2020, US Air's departure has provided all the airspace "de-confliction" to be gained by relocation.

But we have drifted into the world of reality - not to be confused with the world according to the airport board and its consultants/boosters - stay tuned.

Sat, 25 Sep 2004 15:02:53 GMT

Delta's Restructuring

It looks like a "big bang" is in store for Delta in January, but will it be done with or without bankruptcy? Delta will probably have to go through Chapter 11 to achieve the cost reductions necessary for survival.

What about the restructuring plan? No airline has ever shrunk to prosperity, and the Delta plan looks promising by preserving or even modestly expanding capacity. The Dallas hub is collapsed, but overall the airline gains 50-60 mainline flights and loses 70-80 regional flights for a modest capacity increase. It's not clear how the new schedule can be flown with 7,000 fewer employees unless a good portion of the layoffs will be replaced with contract/offshore staffing.

Locally, Bay County gains one flight daily to/from Orlando, and loses weekend service to Dallas/Ft. Worth. USAir has offered Orlando service, but never jet service, so the Delta Connection flight has potential. The Orlando flight will also test Delta's plan for more intra-Florida service. Historically, east-west service along the Gulf coast has been weak, but the intra-Florida focus is a recent pattern that may succeed.

Delta is moving at last to bring its costs and fares in line with the mass market. At Cincinnati, fares have been simplified and reduced in a move Delta says will be expanded over the other hubs. That is good news for customers and ultimately the only way forward for Delta. Let's hope the benefits reach down to smaller markets like Bay county.

Mon, 30 Aug 2004 18:38:40 GMT

On Politics and the War

As we approach the election season, Britt Blaser has some cutting insights on politics and the war on terrorists. He also points to John Robb, who poses the most coherent view I have seen of the assymetric war.

I can't improve on their points, so read on...

Mon, 26 Jul 2004 02:14:18 GMT

Airtran Quits Tallahassee - Whither Bay County?

AirTran announced this week they are quitting Tallahassee, both north to Atlanta and south to Tampa. I thought AirTran had survived the competition in TLH, but apparently Delta swamped the market and made it too painful to continue. Back in April 2002, I expressed doubt in this blog that AirTran could make money in Tallahassee. Subsequently, they leased some R-jets, reduced their service in Tallahassee to all R-jet, and announced that "At last, supply and demand are in balance in the Tallahassee market...". That seemed to work until this year, when AirTran announced the R-jet costs were too high and cancelled the leases. Then they tried to serve Tallahassee with their mainline Boeing 717, whereupon Delta piled four more mainline "loss leaders" into the market. This was the last straw and AirTran capitulated, as they did earlier in Eglin/Okaloosa.

This leaves the only discount service in NW Florida at Pensacola, and again it is AirTran. Pensacola's airport commissioned an excellent traffic study in 2003, which concluded that AirTran was setting the price level in Pensacola and even influencing Delta and Northwest to compete on price in Eglin/Okaloosa to prevent "leakage" to AirTran.

At Tallahassee, AirTran was capturing a portion of the Bay County market, but Delta was not competing on price from Panama City/Bay County airport, choosing to limit seats instead. AirTran's departure from TLH probably means higher fares in both markets, although Delta will have to discount some seats in TLH until they can unwind the oversupply they used to defeat AirTran.

Whither Bay County? This cannot be good news for the new "regional" airport, because it confirms that somewhere north of 500,000 enplanements are necessary to attract a discount airline (Tallahassee had 512,000 last year including AirTran, and will relapse to less for now. Pensacola has about 800,000.) Bay County is struggling to approach 200,000 enplaned, and will probably not reach 500,000 before 2030-2035.

What about Southwest? Pensacola's traffic study concluded that Pensacola could not attract Southwest yet, but PENSACOLA HAS THE ATTRIBUTES SOUTHWEST WILL SEEK WHEN THE TIME IS RIGHT ( Interstate highways to collect regional passengers, over a million potential enplanements, of which Southwest could expect to get 400,000). Southwest will probably replace AirTran in Pensacola someday, but not for a long, long, time.

It appears to me that Bay County is still the "odd man out", too small to attract a discount airline and too close to more competitive airports (Eglin/Okaloosa and Tallahassee). If the construction of a West Bay/St. Joe airport is fast-tracked, it will face all these competitive pressures with no effective strategy. Better relax and try to get a better deal from St. Joe because the only near-term purpose for the new airport is window-dressing for the Sector Plan. We are on track to squander $400 Million in grants, relocate all the jobs at the airport away from Panama City, commute 50 miles for the same air service, kill much of General Aviation, and MAYBE attract 10 new charters per year. The only people pushing for the new airport are the Chamber of Commerce and St. Joe - what are THEY bringing to the table, if not passenger traffic?

Tue, 15 Jun 2004 01:32:03 GMT

Musings on Air Force Two (A Boeing 757-200 Today)

The Vice President visited Bay County today, which put the new-airport crowd into absolute contortions to explain why the 757 could visit our present airport and yet we must have a new one to accomodate fullsize jets. Amy Ausley, "Partner in Progress", stuck her neck out the furthest, "explaining" that an airline 757 would have to be essentially empty to take off from Bay County.

I just looked up the range of a 757-200 with full passengers and bags from a 6000 foot runway: it is approximately 2500 miles, which is consistent with the 2000-mile flights daily from 5700-foot Orange County CA. Let's see, from Bay County it is 750 miles to New York, 2000 miles to Seattle, so Vancouver would just about max out the 757 from here.

Just remember, this is not about aviation. It IS about real estate and politics, the true economic base of Bay County.

Mon, 15 Mar 2004 22:33:46 GMT

Myth of the Week - "Florida Aviation Trust Fund"

Airport advocates have again stated that the new airport is being funded by a "State Aviation Trust Fund". No such fund exists. The FDOT funds spent so far (over $20 Million) have come from targeted special appropriations controlled by legislative leadership. Without this unusual political funding, the project would be proceeding much more deliberately.

Mon, 15 Mar 2004 22:02:25 GMT

The Airport Referendum: 55-45 No, but to What Effect?

We finally had our non-binding referendum, and in spite of the presidential primaries being already decided, over 20% turned out to express themselves on the new airport.

The results are a resounding vote of "no confidence" in the present approach. It is time for local elected and appointed officials to require accountability from the airport manager and his consultants. They have spun a convoluted "story", going so far as to collude in a bald negative political campaign against themselves . Where is the impartial justification, the objective analysis of alternativess, in short the case for this project?

Sun, 14 Dec 2003 22:24:33 GMT

"Partners in Progress" - A Great Investment

The political goodwill created by "Partners in Progress" paid off handsomely on Friday. Assuming St. Joe contributed circa $1 Million to the PIP "BayCountyFirst" campaign, the return on investment was super.

On a day when the stock market stood still and the only news about The St. Joe Company was Bay County's approval of the Sector Plan land use proposals, JOE stock surged 5%, adding $130 Million to market capitalization. The holdings of management insiders gained millions too. Anybody holding December 35 call options gained 60% overnight!

Well done, Bay County Commission and "Partners"! Here's hoping you get the gravy you anticipate soon. After all, it's "our" turn.

Wed, 26 Nov 2003 12:30:54 GMT

Southwest to be Featured on A&E in 2004

From the Southwest web site:

It's a Bird. It's a Plane. It's Southwest Airlines in a New A&E Network Documentary Series

Southwest has partnered with A&E Network for an all-new, real-life adventure series - a behind the scenes look at the drama surrounding commercial airline travel. The ten half-hour episodes of Airline are set to
debut in January 2004. Los Angeles International and Chicago Midway are two of the airports that will
feature prominently in the documentary. Airline will not only focus on the highs and lows of passengers who hop on board Southwest flights bound for destinations across the United States. The program will
also follow our airline's staff and crew, from the high-flying pilots through to the check in staff and supervisors who work with Customers day in and day out.

Wed, 12 Nov 2003 17:03:50 GMT

AirTran Solicits Vote on Next Service Point

Airtran asks here for customers to choose the next AirTran city from 36 suggested markets. Neither Bay County nor Huntsville (our current darling) is listed, although write-ins are invited. Citizens in Huntsville are organizing a write-in Campaign. Our "Partners in Progress" are silent, while still bleating about "doing nothing".

Mon, 10 Nov 2003 12:57:38 GMT

News Herald "Flying High" Airport Traffic Story - More Numbers

The story on Bay County airport traffic deserves a bit more analysis. Dividing the total passengers by the total flights shows the usual 30 passengers per flight. An 8% gain over 2002 looks good, but 2002 was a very depressed year. The bigger story is that the projected traffic for 2003 (approximately 380,000) is 6% less than predicted for 2003 in the Feasibility Study recommending relocation. The airport is approximately two years behind the traffic forecast FAA made in 2000, and $3 Million behind the capital surplus forecast in the Feasibility Study.

Tue, 28 Oct 2003 11:54:14 GMT

AirTran Reduces Capacity in Tallahassee, Exits Subsidy

The regional jet continues to re-shape service to small markets (anybody listening in Bay County?) AirTran was able to drop its subsidy request in Tallahassee after reducing its service to all regional jets effective in November. An AirTran spokesman said "We have at last matched our capacity to demand in the Tallahassee market."

Delta continues to over-supply Tallahassee, but watch for a re-balancing if Delta concludes it cannot dislodge AirTran. And yes, my crystal ball was wrong - the R-Jet ate it, and it now appears AirTran has found a formula to succeed in 500,000-enplanement markets.

AirTran Jet Connect, the regional-jet operator, is probably the best bet for low-fare service to Bay County. Stay tuned...

Sun, 19 Oct 2003 13:10:00 GMT

Our Beautiful Bay

Had an opportunity Friday to go sailing with a friend on St. Andrew Bay. A gorgeous day, great conversation, and a few hours of consummate leisure/sport, sailing. Sailing is like poetry, totally unnecessary in the modern age, but so satisfying at a primal level. Thanks, friend, for a great day!

Sat, 18 Oct 2003 14:23:47 GMT

My Guest Appearance at the Airport Options Forum

Thanks to everybody who attended my talk at Gulf Coast College on October 16 - I think we all learned something, and I hope we had a little fun too. The airport debate has been far too acrimonious of late. I was disappointed that neither the airport board nor the County Commission attended. "Partners in Progress" sent a videophotographer, and hopefully our local officialdom will see some or all of it. I will do a repeat for any public body or civic/church group having a screen to host a PowerPoint presentation (the material almost demands detailed graphics for the discussion). My op-ed in the News-Herald is a very compressed abstract.

My apologies for the length of the lecture - it should have been covered in 45 minutes and I went over an hour.

I would like to put the material on this (or another) web site, but the files are large and I may not be able to afford the bandwidth.

About the groups who hosted the forum: their concerns are primarily environmental protection and growth management, and I share some of those concerns but not as passionately. My "aviation planning" concerns and their "community planning" concerns just overlap enough that they made the arrangements for convening the meeting. Thanks to their volunteers and donors for making it possible!

Thanks also to WKGC-FM 90.7 for broadcasting the entire presentation and Q&A. The station manager saw the tremendous public interest in my viewpoint during my appearance on "RapLine" October 13, and decided to cover the forum in spite of the limitations of radio for a largely graphic presentation.

Sat, 18 Oct 2003 13:57:38 GMT

Mike Boyd Reports on his Forecast Conference

Please visit Boyd Group and follow the links to the 2003 Forecast Conference and Mike's always-interesting "Hot Flash".

Thu, 09 Oct 2003 23:50:44 GMT

Boyd Group Issues Passenger Traffic Forecast

The New York Times covers Mike Boyd's Nashville forecast conference - as usual, Mike breaks some surprising scoops, including the rise of Long Beach and Flint MI.

Sun, 14 Sep 2003 15:03:48 GMT

Coming into Focus: Cost of the Sector Plan

The proposed new airport is at least $252 Million, and now it's becoming clear that the 37,000 acre "West Bay Preservation Area" is 10,000 acres of pinelands donated for airport mitigation, about 14,000 more acres of pinelands for various mitigations, and finally about 13,000 acres of waterfront and riparian buffer lands to be offered for sale to the State of Florida, subject to funding for the airport being approved first. If pineland donated for the airport is $3,000 per acre, let's assume conservation land is $12,000 per acre, being much more desirable. So, conservation costs will total $150+ Million.

Summing up, the front-end cost of the Sector Plan is north of $400 Million, before the first tax nickel is collected or the first industrial employer is recruited. If the State declines to buy the conservation land, it remains the property of The St. Joe Company, and the shoreline development wrangle continues. The airport is moved to the St. Joe Sector, and the eastern county waits for the St. Joe tide to lift its boat. You won't need to hold your breath - this tide isn't coming any time soon.

Thu, 11 Sep 2003 12:44:09 GMT

Aviation Manufacturing in Wichita: Minus 14,000 Jobs

The TopekaCapitalJournal reports 14,000 jobs at average wage of $50,000 have been lost. The Wichita economy, one of the most manufacturing-oriented in the country, is a wreck because the aviation industry is in the lowest cycle in history.

This huge overhang of aerospace capacity does not bode well for startups and aspiring aviation industry recruiters. Our airport boosters should take note...

http://www.cjonline.com/stories/090703/bus_turmoil.shtml

Thu, 28 Aug 2003 14:12:25 GMT

News Herald Gets It Right After All

Kevin Porter followed up on the Flight 4441 story, and found (as his TV colleagues did) that Delta Connection returned Flight 4441 to Atlanta because Atlanta has mechanics and spares, not because of runway length. Porter also noted that the companion story of a USAir Express diversion from Ft. Walton (12,000 ft runway) to Bay County was also driven by maintenance capabilities - Bay County has mechanics for the Beech 1900.

Wed, 27 Aug 2003 11:17:36 GMT

The Flight 4441 Story - Consider Your News Source

Today's News Herald ($Subscription required) reported that Delta Connection Flight 4441 turned back to Atlanta a couple of days ago after the pilot announced a minor mechanical problem and that the runway in Bay County was too short to land with this problem. The News Herald reported this part of the story, along with the connection with the proposal to relocate the airport to the St. Joe Sector. The NH also reported that it was unable to determine what the problem was on Flight 4441.

WMBB - Ch. 13 reported the same story several hours earlier than the NH deadline, and followed up with Delta to verify the report. Delta stated the airplane returned to Atlanta because the airline had mechanics and resources there to repair the problem, and that the runway at Panama City was adequate if the crew had chosen to land here.

Given a choice, an airline will always go to a maintenance base rather than a remote airport with few resources to fix a problem. This scenario occurs almost every day in an operation with hundreds of airplanes and thousands of flights.

The News Herald was either lazy or biased toward the version of the story that supports new-airport boosters - take your choice.

It is truly regrettable that the airport relocation debate has sunk to this level. To their credit, airport officials did not comment publicly on this episode.

Sat, 23 Aug 2003 05:42:07 GMT

LinkAlert: Mike Boyd on the Airline Biz

I have added a link to the The Boyd Group - Mike Boyd is as no-nonsense as you will find among airport consultants. I don't know how he keeps attracting clients with his contrarian approach, but he tells the truth. Looks like there is still a market for it.

Tue, 19 Aug 2003 22:01:16 GMT

A Nice Week in the Panhandle

Last week was an exception to the rain-rain days of this summer. We had children/grandchildren in town and took time to do some sightseeing. South Walton county and Grayton Beach (the town and the state park) have to be the prettiest accessible beaches in the U.S. My personal favorite is Camp Helen in western Bay county, but the half-mile trek is too much for toddlers and infants. Tip: put a chair under the boardwalk at Grayton state park, no need for an umbrella...

Tue, 19 Aug 2003 21:43:41 GMT

An Old Neighbor in Atlanta is in the News

The Hapeville Ford plant (literally at the end and below Runway 8L-26R at Atlanta airport) has a murky future...

Ford Plant Finds Efficiency Is No Protector. Ford's plant near Atlanta is one of the most productive car factories on the continent, but its future is in doubt. By Danny Hakim with Anne Berryman. [New York Times: Business]

Tue, 19 Aug 2003 21:26:50 GMT

PIP's Media Advisors

The Victory Group of Tampa is the apparent brain trust who advised the Airport Authority to "go negative" against itself. Victory Group's claim to fame is the meteoric rise of U.S. Rep. Katherine Harris, the orange-grove heiress who was Jeb's co-chair for the 1998 campaign and later was Secretary of State during the 2000 presidential election recount(s).

As I have said before, the airport project does create jobs: $20 Million or so for Bechtel in Orlando so far, . and now who-knows-how-much for this Tampa political boiler room. Bay County is not totally left out - Wm. Harrison (registered lobbyist for both Bechtel and St. Joe) is prospering. Be patient, though, no doubt the 3,000-job startup (Alliance Aviation) which couldn't raise $10 Million will return soon to claim the glass slipper and lift us all to prosperity.