Employees from startup airline PEOPLExpress spent Veterans Day removing equipment from the terminal at Newport-News Williamsburg International Airport, marking the third time in three years a low-fare airline has moved out of the Peninsula’s lone major airport.
A fourth low-fare airline is slated to leave in January, when Frontier Airlines will cease offering nonstop service to Denver. The departed airlines are all low-fare carriers, and their loss is a particular challenge for an airport whose president says it thrives when competition abounds in the airline business.
“The more competitive this industry is, the better off a market like Newport News will be,” said Ken Spirito, the president.
More competition in the airline business means more airlines offering service, which makes Newport News a more attractive target for an airline looking to get a leg up on the competition.
The loss of the four airlines — AirTran, PEOPLExpress, Allegiant and Frontier — leave the airport with two service providers: Delta and U.S. Airways, which offer nonstop service to Charlotte, Philadelphia and Atlanta. Those two carriers are large, national operations, which Spirito said tend to charge higher fares than their low-fare counterparts.
The transition away from low-fare airlines dovetails with an almost 50 percent decline in passenger numbers at the airport. In 2011 — the last full year before the airlines began leaving — Newport News served 1,058,505 passengers, almost twice the 544,031 served in 2013. Airport spokeswoman Jessica Wharton said 457,054 passengers have used the airport in 2014, a figure that is about even to that point in 2013.
“Without a low-fare presence like AirTran, [air travel in the region has suffered],” Spirito said. “Fares are higher and the choices are fewer.”
The largest slice of the missing passenger pie is that of AirTran, which left the airport in March 2012. The low-cost airline carried nearly 500,000 of the passengers who visited the airport in 2011. AirTran officials announced the airline was leaving in August 2011, about three months after Southwest Airlines acquired it.
Both Spirito and Charles Braden, the director of marketing for the Norfolk Airport Authority, said the majority of the AirTran passengers either stopped traveling or transitioned to other forms of transportation to reach their destinations. A small number of them moved on to either Norfolk or Richmond.
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A loss of low-fare carriers
AirTran, March 2012: The departure of AirTran cost Newport News-Williamsburg International Airport almost 500,000 annual passengers.
Allegiant, August 2014: The low-fare carrier offered semi-weekly service to Orlando until it left. It has since resumed service to Florida from Richmond International Airport.
PEOPLExpress, September 2014: The fledgling airline announced a suspension of service Sept. 26, however a self-imposed deadline for resuming flights has passed and airline officials have not announced a new date.
Frontier, January 2015: The low-fare carrier still offers semi-weekly service to Denver, but the last flight is scheduled for Jan. 6.
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The acquisition of AirTran by Southwest is part of a broader trend playing out across the country. Airlines are consolidating, which dampens the competition Spirito said Newport News needs to thrive. There is also a focus among large, national airlines to shift from offering many nonstop flights to concentrating on routing passengers from smaller airports to major hubs.
These changes are causing significant losses to smaller airports across the nation, according to a white paper from the Massachusetts Institute of Technology’s International Center for Air Transportation. Airlines in Newport News and throughout the region have slashed flights from local airports in response.
Braden said nonstop flights from Norfolk by Southwest Airlines to destinations including Atlanta, Jacksonville, Tampa Bay and Nashville have all been axed. Newport News has lost service to destinations across the East Coast, including the New York City area, Boston, Pittsburgh, New Orleans and St. Petersburg, Fla. In Richmond, service has been reduced or lost entirely to destinations including Pittsburgh, St. Louis, Memphis, Cleveland and Cincinnati.
“[The destinations lost to Richmond] are all good connecting markets, but have insufficient local traffic to support nonstop service as airlines re-work their route maps and fleets,” Capital Region Airport Commission Director of Marketing and Air Service Development Troy Bell wrote in an email.
Though the lost passengers have mostly stopped flying, Spirito said they are still in the area and will resume use of the service when a low-fare carrier returns. The Frontier flights to Denver tended to be 90 percent or more full, while flights from Allegiant, which stopped offering service in August, were 100 percent full in its final days.
A Frontier spokesman said last month the decision to leave Newport News was difficult, noting the decision was made because the low-fare airline is transitioning away from flying its passengers to its Denver hub and is instead relying on airport-to-airport nonstop service.
Air travel has also taken a hit in the area because of sequestration, the across-the-board federal spending cuts that went into effect in 2013.
A 2013 report from the Hampton Roads Planning District Commission estimates defense-related activities and spending accounts for 41.2 percent of the region’s economy, so when federal spending diminishes, the area’s economy feels the pain.
Spirito said sequestration affected Newport News, but the majority of the trouble at the airport is attributable to the higher fares caused by the dearth of low-fare options. Braden said the effect of sequestration was more pronounced in Norfolk, where it was evident throughout 2013, when passenger levels from the previous year dropped from 3.3 million to 3.1 million.
For Newport News, there are other paths to the revenue needed to stay open besides passengers. About 45 percent of the airport’s revenues are generated by commercial airline service. The remainder comes from sources including land and equipment the airport leases out, such as hangers, fuel depots and other goods used by corporate and private flights.
Wharton, the Newport News airport spokeswoman, said that while those resources are valuable, the replacement of the lost air service is important.
“We understand there are destinations that our community needs to get to,” she said. “It’s a huge priority for us.”
One potential path to bringing that service back in the wake of AirTran’s departure was PEOPLExpress, a startup low-fare airline that began operating from the airport on June 30 after more than two years of planning. It served markets lost from AirTran’s departure, like the New York City area and Boston.
The airline operated until Sept. 26, when flights were suspended after one of its two planes was sidelined by mechanical issues and the other was struck by a vehicle on the tarmac. Its leadership initially said flights would resume Oct. 16, but that date passed and no formal date has been announced for when service will begin again.
In a November interview with Norfolk CBS affiliate WTKR, PEOPLExpress Founder Mike Morisi said the airline would begin taking reservations in January for flights set to resume in March.
A spokesman for the fledgling airline declined to confirm his statement to WYDaily.
In the meantime, airport officials in Newport News are in active talks with their attorneys about possible legal action against the airline, which they say owes the airport about $100,000 in fees already collected from passengers. The lack of payment is what caused them to kick the airline out of the terminal over Veterans Day Weekend, Spirito said in November.
PEOPLExpress also received $650,000 in grant money from the Peninsula Airport Commission, which was reimbursed by the U.S. Department of Transportation.
Related Coverage:
- Frontier Airlines to Leave Newport News Airport
- Allegiant Air to Stop Offering Service from Newport News
- No Timetable for PEOPLExpress to Resume Service from Newport News
- PEOPLExpress Scrambles to Restart Service to Keep Federal Grant Money
- PEOPLExpress Suspends All Service Until At Least Mid-October
- Upstart Newport News-Based Airline PEOPLExpress to Offer Service to Orlando
- Upstart Airline PEOPLExpress Service Begins in Newport News
- PEOPLExpress Starts Service June 30 from Newport News to Northeast Cities
- AirTran to Stop Service from Newport News/Williamsburg
