MacArthur's low fares both asset, liability
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Long Island MacArthur Airport consistently is cheaper to fly out of than most other U.S. airports, but industry experts warn that less-expensive airfares don't always translate to more flights.
The average one-way ticket out of MacArthur in the fourth quarter of 2012 was $188, according to statistics from Colorado-based aviation consultancy Boyd Group International Inc., compared with $230 nationwide.
Of the top 100 airports for domestic passengers in 2011, only 15 had a cheaper average fare than MacArthur, Department of Transportation records show.
Officials at the Islip Town-run airport would like to attract more carriers and flights. The facility lost 46.4 percent of its commercial departures from 2007 through 2012, the steepest decline of any small airport hub in the United States.
But its cheaper fares may not lead to more airlines looking to come to Islip, industry analysts say.
The airport's reputation for inexpensive tickets might deter new carriers because they may not want to have to compete with Southwest Airlines, Boyd Group International chairman Michael Boyd said.
In addition, MacArthur's fares to its destinations often are slightly more expensive than its closest competitors -- Kennedy and LaGuardia airports -- and the Islip facility relies on leisure travelers, who have been known to drive a few extra miles to take a cheaper flight.
Some industry experts and Islip Town Supervisor Tom Croci said people who fly MacArthur don't choose it for the ticket price -- they choose it for its ease, convenience and small-hub feel.
"We've always felt that MacArthur is a bargain and competitive in their pricing, but the real bargain is the convenience because you don't have to go through the expense or the hassle of going into Kennedy and LaGuardia," Croci said.
He added that the airport's newest airline, PenAir, will begin its nonstop service to Boston on July 25 with an introductory one-way rate of $119.
"At MacArthur, you can get on a nonstop flight for $25 more and not fight the highway," Boyd said. "Parking is easier. There's no question flying out of MacArthur is a whole lot easier than getting to Kennedy and LaGuardia."
The U.S. Department of Transportation's Bureau of Transportation Statistics has ranked MacArthur's average fare below the national average since 1988. In the fourth quarter of 2012, the agency quoted MacArthur's average fare as $320.30, and the nationwide average as $374.24. Of the 447 airports handling commercial flights in 2012, Islip ranked 386th in ticket prices -- one of the cheapest.
The bureau's figures are based on 10 percent of all airline tickets sold and include both round-trip and one-way fares.
Robert Mann, who heads an aviation consulting group, and Boyd say that lumping round-trip flights and one-way trips together doesn't always give the best picture. "It overstates the cost," Boyd said.
Aviation analysts said MacArthur's fares look inexpensive compared with the nationwide average for a few reasons: MacArthur mainly flies to nearby East Coast destinations instead of zigzagging across the country, and the airport's predominant carrier, Southwest, was for years known as the low-cost leader in commercial aviation.
"You can take a look at who is the airline and what sort of markets are being flown," said Mann, president of R.W. Mann & Co., an aviation industry consulting group based in Port Washington. "If you have a low-fare airline and leisure or short-haul destinations, the absolute fare numbers are going to tend to be lower."
But MacArthur's fares may not be as cheap in reality as the data suggest, analysts said. A calculation of one-way fares to the destinations that Islip serves, such as Orlando and West Palm Beach, Fla., shows that Kennedy Airport and LaGuardia Airport usually have cheaper flights, Boyd said.
"The number one market out of Islip is Orlando and the fare is just about the same as LaGuardia and Kennedy -- actually a couple bucks ahead, so Islip is a little more expensive to Orlando," Boyd said.
"To the places where the majority of people want to go from Islip, it's not necessarily cheaper."
Of the top 15 destinations where MacArthur fliers ultimately travel -- including those who require connecting flights -- Kennedy and LaGuardia provide cheaper one-way flights to all but five of them: Baltimore, Washington-Reagan, Atlanta, Las Vegas and Norfolk, Va., according to 2012 data compiled by Boyd Group International.
MacArthur's top destinations are in Florida and are considered leisure travel locales. And when it comes to leisure travelers, low fares are particularly important, said Michael Wittman, a student in MIT's International Center for Air Transportation, who has published white papers on the recent changes in the aviation industry. Leisure travelers are quick to use another nearby airport if its fares are cheaper.
"I think low fares are one of the most important determinants behind a passenger's choice to choose one airport over another in a region," Wittman said by email. "Research has shown that leisure passengers in particular are very sensitive to small changes in fares."
But while cheaper fares could draw more passengers, they can deter airlines on the basis of too much price competition.
"You bring more customers, but if the fares are real low it's hard to attract new airlines because they don't want to go to places where fares are real low," Boyd said. "That's the problem Islip has because it's so much Southwest service, so other airlines are going to say, 'Why do I want to go there to fight with Southwest?' "
Despite the desire for low fares, airports in the end have no control over what their carriers charge. And while analysts said having low fares won't bring new service to an airport -- and at times, can scare away airlines who don't want to compete with an established low-cost carrier -- airports with slightly higher fares can lose passengers who might drive to a nearby airport for a cheaper ticket.
"It's essentially the airport's business is to run an airport," Mann said. "The airline's business is to advertise low fares."
The best thing an airport can do, he said, is to pursue low-cost carriers -- and keep their own prices, for things like rent and landing fees, competitive.