We received an email from Tim this morning:
"I travel 2-3 weeks of each month. The new SGF airport is very nice and I am very glad to see the advantages of a comfortable place to fly in/out of the SGF area. My daughter flies 3-4 times per year to Mexico for school, employment and leisure; I fly 24-30 times per year with work; my wife and I fly 3-4 times for vacation. I find it very frustrating that flights from XNA (NW Arkansas Regional Airport) are consistently less than from SGF. I do realize Wal-Mart, Tyson Foods, etc. create an advantage with the XNA area, but SGF has a larger metropolitan population than the Fayetteville/Rogers/Bentonville area. XNA offers flights to EWR, CLT, LGA, DTW, MSP and CVG that SGF does not currently offer (some of which have been eliminated in the past 12-18 months). With these additional destinations, XNA has a greater advantage monetarily and convenience-wise than SGF. What can be done to add these additional destinations/departures from SGF to be more competitive in fares?"
Tim, it all boils down to numbers. Let’s begin with population. The most recent population estimate puts the Fayetteville MSA at: 443,000. The most recent population estimate puts the Springfield MSA at: 426,000. And then there’s per capita income—ultimately it’s more important than MSA population. Fayetteville MSA per capita income: $32,400. Springfield MSA per capita income: $30,104. Bottom line: there are more people in the Fayetteville MSA and they have more money to spend.
At first blush, the differences between these numbers may seem insignificant. But in the hair-splitting world of airline revenue sheets, they make all the difference. And when you add in the business traveler impact of Wal-Mart, Tyson Foods and JB Hunt…well…that’s why XNA has the service it has.
As for fares, we don’t hear nearly as much about this as we used to. In fact, a study commissioned in 2008 showed that SGF fares were slightly lower. The data below reflects the first and second quarter of 2008: Of course, this data is two years old. And we’ve never claimed that fares are always lower at SGF. On average, though, we will claim that SGF and XNA fares are roughly equal.
There are no magic bullets out there that will bring more service and lower fares to SGF. Ultimately, airport growth is a reflection of the Springfield MSA: as the MSA grows, the airport grows. More people means more demand. More demand means more service. More service means a bigger supply of seats. The greater the supply of seats, the lower the fare.
It really is all about numbers.