Airport Leakage Improves 18 Percent

 

faucet2.jpg Today I have some really good news to report: our airport has seen an 18 percent decline in the number of customers leaving the market to fly from other airports. The news comes from a leakage study we commissioned late last year. The results just came in. “Leakage” is the aviation term used to describe customers leaving the market to fly from other airports. It’s typically caused by two things: cheaper fares at other airports and more non-stop destinations.

 

The last time we did a leakage study was in 2005. The finding back then was that 30 percent of our potential customers were leaving the market to fly from other airports. A study in 1997 reached the same conclusion. We expected that the new study might show some slight improvement, but the 18 percent decline blew us away.

 

What does the finding tell us? It tells us that Springfield fares are still high, but not as high as they used to be. It also says that the vast majority of customers are deciding the difference in price isn’t worth the drive to airports in Kansas City, St. Louis or Tulsa.

 

The study cites two reasons for the improvements: the addition of Allegiant Air service in April 2005, and the addition of Delta service to Atlanta in December 2005.

 

As many of you know, Allegiant flies from here to Las Vegas, Orlando and Tampa. Round trip tickets are sometimes as low as $200. Before Allegiant’s arrival, it cost twice or three times as much to reach those cities. As for the impact of Atlanta service, that has less to do with cost and more to do with connections. The service makes it much easier to connect from Springfield to the East Coast and Europe. 12 direct destinations. While the study doesn’t mention it, I think that’s another reason for the leakage improvement. Nine of those destinations are big hub airports. This makes it possible to reach most places from Springfield with only one connecting flight.

 

What’s the practical, real world impact of this improvement? I think it’s a strong selling point for new or additional service. As the author of the leakage study put it, “Airlines generally prefer existing strong capture rates rather than the potential to recapture traffic with new service. In the age of $95 oil, most airlines don’t want to work any harder chasing passengers than they have to and most are also risk adverse."  

 

Bottom line: when we’re talking to airlines we’ll use this study to show them the strength of the market. If you give us the seats, we’ll fill them.

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