Big losses in flights at MacArthur Airport

A Boeing 737 jet comes in for landing A Boeing 737 jet comes in for landing at MacArthur Airport in Bohemia on March 29, 2012. Southwest Airlines says it made a record $152 million in the first quarter of 2014, more than doubling the $59 million profit it had during the same time last year. Photo Credit: Newsday / J. Conrad Williams Jr.

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Long Island MacArthur Airport lost 46.4 percent of its commercial departures from 2007 through 2012, the steepest decline of any small airport hub in the United States, according to a report by MIT's International Center for Air Transportation.

In 2012, the arrivals and departures were the fewest at the airport since 1999, the year that the facility's current major carrier -- Southwest Airlines -- began operating there.

Higher fuel prices, a down economy and efforts by domestic airlines to decrease redundant flights at small airports are hurting many small hubs across the country. But MacArthur's problems have been compounded because of its proximity to nearby large airports and its reliance on a single carrier, Southwest Airlines, said Michael Wittman, one of the authors of the white paper that came out last month/from MIT's ICAT, a top research center for the aviation industry.

"It's indicative of a lot of the towns we're seeing in a lot of metropolitan regions," Wittman said. "The small hub right now -- it's just changing."

Officials at the town-run Ronkonkoma airport say they're working diligently to build up MacArthur's flights and services again. Since 2012, officials have made management changes and broken ground on several airport improvement projects, including a roadway realignment and the lengthening of two taxiways.

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"We're staying ahead of the curve and looking at what the market is on Long Island," said Islip Town Supervisor Tom Croci. "We're past leveled out, we're on the incline now. We went from having about 16 flights a day in January 2012 when I came into office, and now we're up to about 24 flights a day, and that's going to go up all summer."

The airport generates between $500 million and $1 billion annually in economic activity for the region, Croci said.

The Islip airport's troubles are mirrored nationwide. Overall, domestic departures at 74 small hubs across the country have dropped 18.2 percent since 2007, and departures at medium-sized hubs are down 26.2 percent. And at the 29 airports defined as large hubs, flights are down 8.8 percent.

Wittman and others said that small hubs -- defined by the FAA as catching between 0.05 percent and 0.25 percent of the total number of passenger trips nationwide for the previous year -- shouldn't expect an abundance of flights, destinations and network carriers to return.

"As airlines continue to consolidate their service at their largest hubs, and continue to consolidate with each other, small community airports will also likely see further reductions in their connectivity to the global air transportation network," the ICAT report said.

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Changes in the industry

Starting in 2007 and 2008, fuel prices escalated and airlines started reducing their capacity to fight rising costs, said industry analyst Robert Mann, president of R.W. Mann & Co., an aviation consultancy based in Port Washington.

In addition, faced with a weak global economy, air carriers began practicing capacity discipline. Instead of operating a greater number of flights in order to have a larger market share, they slowed down on establishing new service, cut back on existing service and began consolidating at larger airports to increase their profitability, experts said.

"If it doesn't make business sense to operate out of the smaller community markets, airlines will remove those flights and sacrifice providing service," said Joseph Loccisano, president of the Long Island Business Aircraft Association. "This is typical for a slow economy and has been the trend at Islip."

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Wittman said he doesn't expect airports like MacArthur to lose more service than they've lost already.

"I think for airports in metropolitan areas the size of Islip, there's definitely a floor to the amount of capacity that can be cut," Wittman said. "It's unlikely we'd see a large drop in capacity in a place like Islip because it's already gone through so many capacity cuts in the last six years."

MacArthur went from 14,784 departures in 2007 to 7,930 in 2012. The airport has 24 or 25 departures a day from its two carriers, with 75 percent coming from Southwest's service to its Baltimore hub and several Florida locations and the others from US Airways Express.

The airport's dependence on the Dallas-based airline has contributed to its flight decline, Wittman said.

"I think it's just a combination of being so built on Southwest service and being so close to other airports in the region," Wittman said. "Those are both sort of hallmarks of airports that lost a lot of service over the last six years."

Wittman compared MacArthur to Manchester-Boston Regional Airport in Manchester, N.H., another small hub with a heavy Southwest presence, just 55 miles from Boston's Logan International Airport. Manchester has lost 41.2 percent of its flights since 2007.

Strategy shift

Aviation industry analysts said there's been a profound shift in Southwest's strategy, from flourishing in mainly small and medium markets to cutting service in those markets and entering larger ones. The report notes that from 2007 through 2012 "Southwest Airlines was cutting scheduled flights at many of the markets it helped create."

In that time frame, the carrier dropped 10 percent of its domestic flights at smaller airports and increased its service at the 30 largest airports by 6 percent -- a move that is counter to the company's former longtime strategy, Mann said.

"You clearly see Southwest having decided that they will go ahead into airports that they previously had avoided, examples being LaGuardia, Boston-Logan," Mann said. "If you look at both Islip as a proxy for New York and Providence or Manchester, N.H., as proxies for Logan, service there has come down as Southwest has gone into the primary market."

Southwest's entry into MacArthur in 1999 was an instant game-changer. The airport went from roughly 8,000 air carrier arrivals and departures in 1998 to 21,688 the next year, according to FAA reports. Southwest service peaked there in 2007 with 11,416 departures and dropped to 5,875 in 2012.

Despite the trend, Southwest spokeswoman Whitney Eichinger said the carrier's routes on Long Island are healthy.

"Short-haul traffic for everyone across the country has declined overall. That has been a trend over the past decade," Eichinger said. "But our dedication to serving smaller markets has not changed. I think for our entire history, Southwest has gone into smaller and larger markets."

Eichinger said demand drives Southwest's service, and the company isn't shunning smaller markets -- it added service to Des Moines, Iowa, and Portland, Maine, in the last two months.

"I think we continue to see seasonal changes there at MacArthur and those will continue, that's our strategy -- we look to see where customers want to go and adjust accordingly," she said. "That hasn't changed and it won't change, and neither has our dedication to MacArthur."

Still at risk

However, as airlines continue to merge with each other and merge their services at the largest airports, Wittman and others said, small airports in proximity to major hubs -- like LaGuardia, Kennedy and Newark Liberty -- could be at risk of losing "all their network carrier service in the next five years."

Terry Hennessey, deputy airport commissioner at MacArthur, said the airport took a hit when Southwest entered LaGuardia and took its service to Chicago with it, and when Southwest ended its service from MacArthur to Las Vegas.

To combat these industry shifts, Croci said MacArthur is "courting everyone," from major network carriers to the ultra-regional airlines that have begun to pop up among small airports. In March, the town announced that starting next month, MacArthur would host two new daily round-trip flights with Alaska-based regional carrier PenAir to Boston.

To get PenAir in, the town agreed to waive the airline's rent, office, operational fees and landing fees for two years, a package worth more than $120,000.

But analysts like Mann warn that until the economy on Long Island comes back, MacArthur shouldn't expect to see huge leaps in service -- and once the sweeteners go, so does the service.

"The airport can extend an olive branch with dollars attached to it to a variety of people," Mann said, "but when the subsidy is gone, the question is, 'Does the service remain?' and the track record on that is it usually doesn't."

LONG ISLAND MACARTHUR AIRPORT'S HISTORY

1942 Town of Islip contracts with U.S. government to build an airfield.

1944 Lockheed Aircraft Corp. builds first hangar.

1949 First terminal building opens.

April 4, 1955 A United Airlines Douglas DC-6 on a pilot test flight bound for LaGuardia Airport loses control soon after takeoff and crashes, killing all three crew members on board.

1960 Allegheny Airlines is first commercial airline to offer scheduled flights from Islip.

Late 1960s The makers of the film "The Out of Towners" used MacArthur as the small Ohio airport from which Jack Lemmon's and co-star Sandy Dennis' unhappy odyssey began.

1997 Islip and Southwest Airlines clinch a deal under which Southwest would make its New York-area debut at MacArthur. "He was the guy who made that airport," longtime travel agent Larry Austin said of Islip Town Supervisor Peter McGowan.

August 2004 A dedicated Southwest Airlines terminal opens. The terminal is named after Islip Town Supervisor Peter McGowan.

March 2006 McGowan resigns from office and pleads guilty to taking kickbacks and illegal use of campaign funds. Terminal is renamed.

June 2006 Investigators find serious fire hazards in the Southwest terminal.

2006

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