According to a recent analysis by the Eno Center for Transportation, while air service has increased and prices have dropped at large airports over the past 15 years, the picture has been more mixed for medium-size airports.
In 2005, 853 million domestic travelers flew from large airports, a year marked by the US Airways purchase of America West and the subsequent consolidation boom in the U.S. airline industry. This led to five major airline mergers in eight years, resulting in a rise in domestic passengers at large airports to 985 million by 2016.
However, the situation for medium-size airports, which handle between 5 million and 15 million passengers per year according to the Department of Transportation, has been different. The aggregate domestic traffic at these airports declined from 284 million passengers in 2005 to 274 million in 2016.
While prices have decreased at large airports, with the average one-way domestic fare dropping from $256 in 2001 to $207 in 2016, the difference in ticket prices between large and medium-size airports has nearly converged. In 2001, the average one-way fare at medium-size airports was $213, but by 2016, it had decreased to $206.
Despite these trends, analysts are unsure of the cause and relevance of these changes, noting that there can be significant variation among different airports and factors such as regional economics, regulatory changes, and consolidation can all play a role in fluctuations in passenger traffic and ticket prices.
For example, while large hubs saw a 15% growth in passenger traffic between 2005 and 2016, Washington Dulles experienced a 34% decline due to increased traffic at nearby airports. On the other hand, San Francisco saw a 62% growth in passenger numbers due to a strong local economy.
In the medium airport sector, aggregate passenger traffic declined by 4% during the same period, with significant variations among individual airports. For instance, Dallas Love Field saw a 157% increase in traffic after the repeal of the Wright Amendment, which had previously restricted flights from the airport. Conversely, Cincinnati and Memphis saw large declines in passenger count due to Delta’s decision to close hubs it inherited from its merger with Northwest.
However, even when looking at individual airports, it is primarily users of large airports who have benefitted. Of the 30 airports that saw a decrease in fares and an increase in traffic between 2001 and 2016, 23 were large airports. Only one medium-size airport, Tampa, saw a decrease in traffic and an increase in fares.
Peter Belobaba, the airline industry program director at MIT, cautions against drawing too many conclusions from these figures, noting that they do not account for changes in the average length of flights at different airports. For example, while fares have risen by 22% at Dallas Love Field since 2001, the length of flights has also increased.
The Eno Center concludes that more research is needed to fully understand the trends impacting air service in different metropolitan areas, as various factors such as the 2008 economic crash, low fuel prices, a regional pilot shortage, and consolidation have all played a role in the U.S. airline industry over the past decade.
One researcher who has specifically studied the impact of consolidation on airline service is Vikrant Vaze from Dartmouth, who recently published a study on the topic in the journal Transportation Research. Vaze and his colleagues found that while overall consolidation has had a positive impact on U.S. flyers, there are regional differences in the effects, with passengers in the home region of the surviving carrier seeing gains while those in the region of the subsumed carrier experiencing less benefits or even losses.
In summary, while air service and prices have experienced mixed results at medium-size airports in the past 15 years, the changes have been more positive for large airports. However, there is still uncertainty surrounding the causes and relevance of these trends, and more research is needed to fully understand their impact on different regions.
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