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  • Writer's pictureBrad Beakley

"Too Bad" Isn't Good Enough

Updated: Apr 8, 2022

There’s a debate swirling in aviation circles concerning the future of airline service to “small cities” as major airlines reconfigure schedules and fleets to recover from severe economic issues (i.e., pilot shortages, fuel costs, pandemic recovery).

As we noted in our March 31 post, “small” cities aren’t always small towns in far-flung places served through the government’s Essential Air Service (EAS) program – the government subsidy to provide service to areas with few customers. Today, scheduled service is being reduced or canceled outright in dozens of markets, including cities we typically don’t think of as “small,” such as Cincinnati, Indianapolis, San Antonio, etc. Predictably, the major airlines’ regional affiliates that fly to many of these cities are seeing their contracts altered or cut as the majors revise their business plans.

This is no dig at major airlines – they have bills to pay and times are tough, so they gotta do what they gotta do. These days, that means flying larger planes less frequently, disproportionately focused on routes between hubs and larger cities. This approach minimizes cost and maximizes revenue. For major carriers, this is a responsible business choice.

But its impact falls where troubled times in the airline industry historically fall: on smaller cities and the smaller carriers that serve them. Consumers in those cities face hours-long drives to larger airports; or fewer flights to a smaller number of hubs, or longer waits at hubs once they get there. Travel for these customers – business and leisure – is more difficult, time-consuming, expensive and less convenient. It also comes, ironically, at a time when COVID has led more consumers to move or consider moving to smaller cities for remote work.

The response by a number of industry observers and pundits is, essentially, “Oh, that’s too bad, but I guess that’s life in the little city. Prepare for even worse times because that’s how airline economics work. The big airlines may be back or maybe not. Time will tell.”

It’s a rather Darwinian view of air transportation. It’s also wasteful, tending to dismiss as collateral damage millions of dollars in airport and aircraft investments and thousands of aviation jobs, along with the economic potential that regular air service promises in any community. Taxpayer investments in airports and facilities were made in good faith, based in large part on projections of major carriers that they would provide the air service that would attract new business.

Whether those cities and regional carriers should have relied on those projections (and some argue in hindsight that maybe they shouldn’t have) the investments have been made and jobs are in the balance. So it’s no wonder that airport operators and regional carriers are looking for ways to stop the bleeding and prevent waste by exploring new ways of doing business, independent of The Way Things Have Always Been.

Our teams at Hospitio Consulting and Services and Current Aviation work with these regional carriers, airports and local businesses to turn the way things have always been to the way they could – and should – be, based on market-driven real-time data and honest assessments of a market’s or carrier’s potential.

We assess whether there is enough demand in a given market to sustain direct service to another airport outside of the hub-and-spoke system, say, Columbus, OH, to Milwaukee. Can a regional carrier avoid losing its investment in multi-million-dollar aircraft by utilizing now- or soon-to-be-grounded smaller aircraft on those routes? Can they fly their planes under their brand, the Current brand, or in another capacity? Can a rural market thrive with very small aircraft, flown by trained pilots building their hours? Do non-flying alternatives, such as flight-to-bus service, make sense?

Each market will deliver different results, but each requires a micro-analysis rather than a sweeping dismissal of their potential simply because “this is how it works.”

We estimated, pre-pandemic, that as many as 400 markets serving millions of customers were markets where people weren’t flying because it was simply too inconvenient. Weekend getaways made no sense when it took two days to get there; a day trip for business easily became an overnight excursion. Today, a family’s decision about where to live may hinge, in part, on accessibility to that city by air.

Some of these potential travelers are in small towns; others in not-so-small cities. Some of these markets may have great potential; others, not so much (subject to the “too bad” in our example above). Given the latest round of cuts, however, we expect there remains pent-up demand for air service to the right cities.

Current’s proposition is to provide a market-driven, reliable, easier flying experience by helping travelers in underserved and unserved markets get to their destinations in less time, with less hassle, and a sustainable model for carriers, airports, employees and the cities they serve. These days, the Current model may also serve to preserve or introduce regularly scheduled, convenient air service, on aircraft suited for individual markets, at reasonable prices. If you’re a regional airport or carrier, it’s worth having the discussion. We’re happy to talk.

Brad Beakley

President and CEO Hospitio Consulting and Services

Current Aviation, Inc.

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