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VOL. 128 | NO. 204 | Friday, October 18, 2013

Airfare Competition Has Airport Authority Optimistic

By Michael Waddell

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Memphis-Shelby County Airport Authority officials remain optimistic about the future of Memphis International Airport, thanks to increased airline competition that is driving down airfares for travelers and businesses.

“Competition is a wonderful thing,” said board chairman Jack Sammons. “Ultimately, we are going to have a mosaic of frequent and affordable air service. The prices are already shockingly low in some markets.”

(Daily News File/Andrew J. Breig)

He cited fares of $77 each way from Memphis to Baltimore on Delta. Higher fares over the past few years had caused many to drive to nearby cities to catch flights at much lower rates.

“It’s an exciting time for businesses (and travelers) that no longer have to drive on the horrific highways to Little Rock and Nashville,” Sammons said.

He also mentioned that an unnamed charter service is very likely to be adding a direct flight from Memphis to Cancun, Mexico, next spring.

“We may well not be finished with Delta’s cuts. I don’t have a crystal ball, but the more cuts they make the more opportunities there will be for other airlines,” Sammons said.

The impact of the recent Delta de-hubbing was felt last month, as the number of nonstop flights dropped from August to September. Delta reduced its schedule from 44 nonstop flights in August to just 29 in September.

The number of available seats also dipped by more than 50,000 seats from August to September, decreasing from 288,340 available seats to 237,840.

For the fiscal year to date, total enplanements dropped 31.4 percent from 4.9 million through August 2012 to 3.3 million through August 2013. In September, total enplanements dropped 26.4 percent compared to August’s numbers, falling from 217,531 enplanements to 159,964.

While Delta’s moves caused the majority of the slide, Southwest’s overall enplanements increased, and Airport Authority president and CEO Larry Cox expects that trend to continue leading up to and following the Southwest/AirTran Airways transition on Nov. 3.

“To the extent that we fill seats, the airlines will provide more seats,” he said.

Airport officials expect to see new aircraft over the next few years as airlines phase out older, smaller airplanes.

“There is a shortage of airplanes in the world, particularly in the domestic market,” said Sammons, who cited the fact that main airlines have new aircraft on order. “There are many exciting names and logos that I hope in the next couple of years you will see flying in and out of Memphis.”

Sammons also expressed excitement over the debut of a new 767 aircraft by FedEx Friday.

Total cargo handled for September decreased 0.77 percent year-over-year, with roughly 723 million pounds handled compared to 728 million pounds handled in September 2012. For the 2013 fiscal year to date, cargo handled is up 2.7 percent, with 6.55 billion pounds handled through September 2012 versus more than 6.7 billion pounds handled so far this year.

Parking revenue was up 20 percent last month due to increased activity at the new ground transportation center that opened earlier this year. Richard White, Airport Authority vice president of properties and business development, plans to tweak the center’s parking offerings over the next few months in an attempt to generate an additional $1 million in revenue per year.

“We’ve added more long-term parking to our presentation,” White said. “We also hope to add another product: a valet service in which people will be able to drop off their car in front of the terminal building, and it will be waiting on them when they return.”

Recent fiscal year 2013 audit results were very positive for the airport. Operating revenue increased 1.5 percent year-over-year, jumping from $110.8 million to nearly $112.5 million. Operating expenses rose 5.2 percent from $55.2 million to more than $58 million.

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