Test yourself... True or false? In 2018, the Gen. Wayne A. Downing Peoria International Airport (PIA) had seven record months, including the busiest month in airport history, and set a new all-time passenger record. (True.)
Passenger traffic is up 14 percent at PIA over the last five years. (True.) PIA has daily nonstop flights to four of the five most-connected U.S. airports. (True.) In 2018, nonstop flights from Peoria to Detroit ended due to lack of use. (False. No, wait, true.)
How can these disparate facts—a record year and the loss of a longtime route—both be true?
A Market Update
“In today’s environment, every market needs to meet the airlines’ expectations, otherwise you’re going to lose service,” says Rhett Morgan, a director with Ailevon Pacific Aviation Consulting, who consults with PIA on air service. “That was the case with Detroit. There was poor overall demand so that aircraft was moved to a more profitable market for Delta.”
Peoria is not alone. At the same time Peoria lost Detroit, Delta either reduced or cut flights to several other Midwest airports—including nearby Bloomington, which lost service to Minneapolis-St. Paul. Airports in Kentucky, Michigan, Ohio and Oklahoma were also impacted by Delta’s restructuring. United Airlines did the same in Champaign, pulling all of its flights to Chicago after just over a year of service.
“The airline industry is very healthy right now,” Morgan notes. “Between industry consolidation, capacity discipline and lower oil prices, there are multiple growth opportunities for the airlines.” Because of that, all markets are heavily scrutinized, especially from a revenue perspective. This is why Peoria’s Fly Local campaign is so important.
“The only thing you can control as a community is to make sure people fly local,” Morgan adds. “And business travel is key, offering the most loyalty and the highest revenue for the airlines.”
A 2017 market analysis showed PIA captures just 58 percent of the air travel within a 25- to 40-mile radius. That means nearly 200 people a day who live near PIA are choosing to drive to another airport, mainly Chicago O’Hare.
PIA Director of Airports Gene Olson notes that’s good and bad news. “Of course, we want everyone in our community to choose PIA, but the fact that there are some who don’t means we have room to grow,” he explains, noting the airport’s goal to decrease “leakage” by four percent by the end of 2019. “We believe this goal is doable. We’re talking about convincing eight to 10 more people a day to fly PIA. As a community, if we all embrace flying local, we can meet that goal.
“One thing I used to hear a lot is that the last flight from Chicago is always canceled to Peoria. I don’t think that was ever true, but it’s good to note that our overall cancellation rate has dropped from 5.5 percent in 2014 to less than one percent in 2018. And, starting next month, we will have up to eight flights a day to Chicago. That’s a lot of options for travelers.”
Olson notes other highlights as well. “Over the past couple of years, we’ve seen new destinations—Charlotte, North Carolina and Destin, Florida—and American Airlines brought larger jets to PIA, giving us first-class service on our flights to Dallas/Fort Worth and Charlotte.”
At the same time, smaller airports like PIA have increasing challenges: Fewer airlines. Fluctuating fuel prices. A nationwide pilot shortage. “We aren’t just competing against our neighboring airports in Illinois,” Olson explains. “We’re competing against every airport across the country. The airline industry is very different from just a decade ago.”
In 2008, there were close to 20 airlines that communities could approach for air service. Today, there are nine. Of those nine, just five airlines—American, Delta, United, Southwest and Alaska—handle more than 83 percent of domestic demand. “There really aren’t that many [airlines] for us,” Olson affirms. “Several do not fly in our part of the country, and others only fly to large airports. For us, the best options are Allegiant, American, Delta and United.”
Another destabilizing trend is the industry’s continued focus on large hubs. Today, more than 75 percent of commercial air traffic flies through just 30 airports nationwide. PIA lies in the shadow of one of those hubs: Chicago O’Hare International Airport. And, according to a 2017 market analysis, more than 30 percent of travelers who should be flying through PIA are instead choosing O’Hare.
Between 2013 and 2018, 32 airports across the country lost all service, while 77 airports saw service cut by 50 percent or more, according to the Regional Airline Association. Leaking passengers to Chicago is Peoria’s biggest challenge. But, as Chris Setti, CEO of the Greater Peoria Economic Development Council, notes, “We have good, robust and convenient air service to the entire country. We have direct access to some really important parts of the country. Dallas, Atlanta and Charlotte immediately come to mind.
“I do think businesses appreciate what we have,” Setti adds. “I always fly PIA… I love how nice it is to so quickly and easily get from my house to the gate.”
A Smooth Landing
PIA is not the only airport operating in the shadow of a major hub. Rochester International Airport (RST) in Minnesota serves a population similar to Peoria and is only a 90-minute drive to Minneapolis-St. Paul International Airport (MSP). More than 70 Rochester businesses pledged to fly RST before Mayo Clinic joined the airport’s Fly Local campaign. Now, 95 Rochester businesses have pledged to fly local, says Tiana O’Connor, marketing and communications manager for RST.
Not only did Rochester have a record year in 2018—they’ve doubled their retention of local travelers from 12 to 24 percent over the last few years. “We are incredibly grateful for the increased support,” notes John Reed, RST’s executive director. “Local travelers are understanding their choice of airport can have a positive impact on our region and more often are choosing to fly local.”
Just one month after Mayo, Rochester’s largest employer, pledged to fly local, a third major airline started service, while the existing major carriers added more flights or brought in larger jets. “The wonderful thing about having a record year is that it gives something back to the community, too,” says O’Connor. “I like to tell our businesses, ‘You were all a part of this. This isn’t about the airport. It’s about you.’”
“Airlines are paying attention to this new commitment to use RST,” Reed adds. “Based on the travel data, we have a very strong case to recruit service to a major western hub like Dallas or Denver. The airport cannot recruit that service alone. It takes local travelers filling the planes now to bring more service to our region.”
The same holds true for Peoria. “I have no doubt that we can continue to grow,” says Olson. “We can make change—just like Rochester has and other cities our size have. Just imagine if we could get those 200 passengers a day out of their cars and into our airport.
“Go global. Fly local. And let’s see what comes next.” iBi
Visit flypia.com for more information.