News Column

El Paso Airport Hurt by Economic Decline

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The El Paso International Airport is facing a decline in passenger traffic and additional cancellations of flights -- something that is causing growing concern among city leaders.

Tight economic times and ongoing challenges of airline companies have caused city officials and leaders to search for ways to maintain and increase the airport's flights and passenger traffic.

The airline industry's struggles with profitability, increasing fuel costs and mergers have drastically affected small and midsize airports that depend on airlines for business, said Brent Bowen, professor and head of aviation technology at Purdue University.

The El Paso airport, with a taxpayer-funded budget of about $48 million, is not immune.

The airport's traffic is down 15 percent since 2010, said Monica Lombrana, the city's director of aviation. Lombrana also said Southwest Airlines, which operates more than half of El Paso's daily flights, plans to stop its direct flight to San Diego in the near future.

The announcement comes a few months after the airline stopped its two nonstop flights to Albuquerque.

"It's a pretty stark situation for medium-sized airports," Bowen said. "And it has pretty much everything to do with the airline industry, which those airports have little or no control over."

The airport's struggle to increase passengers and add flights coincides with a decade-long tailspin of the airline industry that's brought consolidation, bankruptcies, mergers and cuts. The New York Times reported that most airlines have struggled to turn a profit, while some airports, including Pittsburgh and St. Louis, are searching for ways to use empty space because of decreased traffic.

Passenger traffic at the El Paso airport used to hover at more than 3 million a year, even in the 2008 and 2009 recession years. But in 2012, the number dropped below 2.9 million.

So far this year, it doesn't look better. Through the first three months in 2013, the number of passengers was down 3 percent compared with the same period in 2012.

The airport also faces another uncertainty.

In October 2014, the federal Wright Amendment, which restricts flights from Dallas Love Field to certain states surrounding Texas, expires. The amendment was part of the International Transportation Act of 1979 and designed to protect and grow Dallas Forth Worth International Airport.

The amendment has meant that Southwest flights going from Dallas to many destinations such as San Diego, Las Vegas, Phoenix and Los Angeles could not be direct and had to stop in a bordering state or Texas city such as El Paso.

Southwest, based in Dallas, states on its website that repealing the Wright Amendment will not necessarily reduce or add to flights at other airports. Rather, the company says passengers will have more options while cities, such as El Paso, can market itself to previously unreachable cities.

Southwest is based in Dallas, and Love Field is getting multimillion-dollar improvements.

Lombrana said that the El Paso airport is carefully monitoring the situation. She said the cancellation of the San Diego flight could be part of Southwest's plans with the end of the Wright Amendment.

Southwest spokeswoman Katie McDonald said that she could not comment on future plans and that scheduling strategy is based on demand. Southwest has 28 nonstop departures to eight cities out of El Paso. The next closest airline is American, with 12 daily flights that serve three cities.

"We've got some challenges," Lombrana said. "But we're not alone."

Other airports around the country are facing similar situations, Bowen said. Bowen explained that it's more profitable and cheaper for airlines to send 10 regional jet flights -- that have about 40 and 70 seats -- between two major cities relatively close to each other rather than send a full-size plane once or twice a day to a distant midsize city.

The numbers are not all doom and gloom, Lombrana said. Lombrana pointed out that while travel dropped 15 percent since 2010, prices have increased at a rate of 23 percent.

El Paso also has not suffered as much as some other Southwest cities, according to a study provided by a consultant to the El Paso airport.

From 2008 to 2011, El Paso lost 10 percent of its traffic while the Albuquerque airport traffic fell 12 percent and Reno, Nev., airport traffic dropped 15 percent. From 2008 to 2012, Tucson had nonstop service destinations fall nearly 50 percent, while El Paso lost 30 percent.

El Paso has a bigger population than all three of the other cities and fewer gates at the airport.

Bowen said El Paso has some intrinsic advantages. Though its isolation makes travel more expensive, there are no other close alternatives, and car trips are long.

"People are going to need to travel out of El Paso by air," he said. "And unlike some smaller airports that are an hour or two away from major airports, El Paso is not in that situation."

Outreach

El Paso, however, cannot rely just on isolation to attract passengers, Bowen said. The city must campaign and promote the airport, tourism and business opportunities.

That's exactly what Lombrana and airport officials are doing. They have had meetings with Southwest officials and are trying to tap into the Mexican market by reaching out to Aeromexico and Volaris.

Bowen said keeping Southwest active in El Paso is critical, given the airline's financial strength and current traffic at the airport.

In a meeting with the City Council, Lombrana showed a part of a presentation given at the Southwest meeting. The slide show highlights El Paso as regional destination with Juarez and Southern New Mexico. It points out magazine rankings and accolades such as best midsize city for job growth, safest city, one of the best cities for the cost of doing business and a top metro area for projected job growth.

Border business gets significant time in the presentation -- in 2011, 18 percent of all trade between the U.S. and Mexico came through El Paso -- while the $5 billion expansion at Fort Bliss is highlighted.

Lombrana said the next step is proving that the El Paso airport is affordable and worth the airline's money. The tax the airport charges the airline per passenger is well below the national average, but she said the city needs to do more.

As a result, officials want to increase the existing incentives to airlines. Lombrana said the airport now matches the airline's marketing up to $25,000 if the airline adds a new, nonstop destination that departs at least five times a week.

Airport officials want to increase that incentive to $50,000.

Other incentives include a reduction in landing fees.

Airport officials and City Council members agree that the private sector must get involved. City Rep. Steve Ortega said Albuquerque was able to add a nonstop flight to New York City by guaranteeing a certain number of seats purchased.

Lombrana said that had to do with business, something the airport can't do under government regulations.

"We have to market ourselves as a growing city that's not just a border town but with growing industry like electronics and systems," Ortega said. "We need cooperation from the business side."

Officials in December met with Southwest officials about adding nonstop service to the Washington, D.C., area with flights to Baltimore. Lombrana said Washington, D.C., is by far the top destination for El Paso passengers the airport doesn't have nonstop service to. It has 35 percent more passengers than the next-closest city, New York.

Lombrana attributes that to Fort Bliss and government agencies such as the Department of Homeland Security.

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(c)2013 El Paso Times (El Paso, Texas)

Distributed by MCT Information Services




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