Ed
06-29-2008, 04:03 PM
From OrlandoSentinel.com, 6/29/08
Sentinel special report
OIA flights clipped
Jason Garcia
Sentinel Staff Writer
June 29, 2008
Travelers to and from Central Florida will have fewer choices this fall about where and when they can fly out of Orlando International Airport.
An analysis of fall schedules shows that the number of seats, flights and destinations available out of OIA will drop sharply after the end of the busy summer-travel season, as U.S. airlines enact deep service cuts to combat unprecedented fuel prices.
In October 2007, airlines flew an average of 426 flights a day to 98 destinations out of OIA, according to the data supplied by OAG (Official Airline Guide). This October, they have planned an average of 363 flights a day to 88 destinations.
The number of seats departing OIA is scheduled to drop by nearly 6,900 a day.
Airport leaders say it is too early for alarm, noting that airline schedules will likely continue to shift in the coming months as oil prices move higher or lower. But the currently planned cuts, some of which have already occurred, are so severe that OIA risks falling back behind Miami International Airport as the busiest passenger airport in Florida.
Why Orlando?
Simply put, many travelers to Orlando are cheap.
Flights to Orlando are dominated by budget-conscious tourists who typically select an airline based on the lowest available fare, rather than any sort of brand loyalty. That has spawned intense competition here between low-cost carriers and legacy airlines.
That's good news for fares: The average cost of a round-trip ticket out of Orlando was about $259 during the fourth quarter of 2007 -- ranking OIA as 12th-cheapest of 100 airports across the country.
But that also means Orlando flights have become some of the biggest money-losers for airlines as oil prices have reached $140 a barrel, and it makes those flights obvious cost-cutting targets. Other tourist-heavy destinations -- such as Las Vegas and Honolulu -- are also being squeezed as airlines redeploy their jets to more profitable routes or ground them altogether
"If they're only making like $50, $60, $70 a leg [on Orlando flights] and they can make $200 a leg or $125 a leg somewhere else, it gets them closer to break-even," said Tom Parsons, chief executive of Bestfares.com.
Airlines also fear that travel to Orlando and other tourist destinations will trail off as the slumping economy forces consumers to scale back on spending or give up their vacation plans entirely. Orlando is "a heavily discretionary destination," aviation consultant Michael Boyd said.
And it'll get worse
The deepest cuts in Orlando will take effect in the fall, after the typically busy summer vacation season ends. Here's a look at how the number of seats available on flights out of OIA will shrink each month through the rest of the year, compared with the same months a year ago:
July... -4%
August... -6%
September... -11%
October... -12%
November... -13%
December... -13%
Effect on tourism
Fewer flights and higher fares make it all but inevitable that fewer people will travel to Orlando, said Abe Pizam, dean of the University of Central Florida's Rosen College of Hospitality Management.
"We will see a significant decline. Logic dictates it," Pizam said.
Many tourism executives say Americans have come to view vacations as a birthright -- something they are not willing to sacrifice even in a faltering economy. But Pizam said that even those vacationers could head elsewhere as it becomes harder to get to Orlando.
"People will not give up their annual vacation. But they will go where it's easier -- easier and cheaper," Pizam said. "That's the problem. This will really hurt us."
Executives at Orlando International Airport have discussed contingency plans in case flight counts and passenger traffic begin to drop -- eating into the airport's revenue, which is generated by everything from landing fees to concession sales. Airport Executive Director Steve Gardner said OIA could, if necessary, delay some construction projects or cut costs elsewhere.
But Gardner said it is still too early for such steps. It's possible that passenger traffic could hold steady despite the service cuts -- provided the airlines can sell more of the seats on their remaining flights. And oil prices are so volatile that schedules still could change.
"A lot of this forecast is very speculative, because a lot of it is based on the cost of fuel," Gardner said. "And I don't know what the cost of fuel is going to be tomorrow or next month, let alone October."
New markets
Although it is losing more markets than it is gaining, OIA will nonetheless have nonstop flights to four new destinations this October:
* Burlington, Vt. ( JetBlue Airways)
*Cancun, Mexico (JetBlue Airways)
*Myrtle Beach, S.C. ( Spirit Airlines)
*Santo Domingo, Dominican Republic (JetBlue Airways)
Orlando vs. Miami
Orlando International Airport surpassed Miami International Airport as Florida's busiest passenger airport in 2004. But airlines' upcoming service cuts will be more severe in Orlando than in Miami, which is less dependent on leisure travel and handles more overseas traffic.
Here's a look at how the two airports stack up:
Average daily departing seats
Oct. 2007 Oct. 2008 Change
From OIA 59,177 52,308 -11.6%
From MIA 55,260 55,154 -0.2%
Market shifts
The carriers flying certain routes out of Orlando also are changing, as some airlines try to gain an advantage from a rival's cuts. Some examples:
*Pittsburgh: US Airways plans to reduce the number of seats it flies between Orlando and Pittsburgh by about a quarter, but AirTran Airways plans a big increase on the route, and Southwest Airlines plans a smaller increase. Overall Orlando-Pittsburgh flights will rise.
*Richmond, Va.:s Delta Air Lines plans to eliminate all nonstop flights from OIA to Richmond, but AirTran plans to add flights between the markets. Overall, Orlando-Richmond flights will fall.
*San Juan, Puerto Rico: Delta and American Airlines will cancel nonstop flights to San Juan, and Spirit Airlines is trimming capacity. But AirTran and JetBlue Airways are expanding service to San Juan. Overall Orlando-San Juan flights will fall.
JetBlue: Bright spot
Despite record fuel prices and industry-wide turmoil, JetBlue Airways says it remains committed to expanding in Orlando. The Forest Hills, N.Y.-based carrier decided earlier this year to make Orlando a "focus city" of its flight network and is adding gates and flights at OIA.
The airline has added nonstop service from Orlando to four new markets since October, and company spokesman Bryan Baldwin said JetBlue sees room to add even more flights, particularly to Caribbean destinations.
"Orlando has proven itself to be very key and a huge piece of our route network," he said. "There's certainly room for growth, especially with the international service."
Jason Garcia can be reached at [email protected] or 407-420-5414.
Copyright © 2008, Orlando Sentinel
~~~~~~~~~~
Bottom line?
Expect crowded flights
Expect higher fares
Expect fewer choices of time of day to fly
Expect fewer non-stop flights
BOOK EARLY !!!
The upside (if there IS one) is that this might influence WDW and the other destinations in town to offer more specials and package deals. Time will tell.....
:(
Sentinel special report
OIA flights clipped
Jason Garcia
Sentinel Staff Writer
June 29, 2008
Travelers to and from Central Florida will have fewer choices this fall about where and when they can fly out of Orlando International Airport.
An analysis of fall schedules shows that the number of seats, flights and destinations available out of OIA will drop sharply after the end of the busy summer-travel season, as U.S. airlines enact deep service cuts to combat unprecedented fuel prices.
In October 2007, airlines flew an average of 426 flights a day to 98 destinations out of OIA, according to the data supplied by OAG (Official Airline Guide). This October, they have planned an average of 363 flights a day to 88 destinations.
The number of seats departing OIA is scheduled to drop by nearly 6,900 a day.
Airport leaders say it is too early for alarm, noting that airline schedules will likely continue to shift in the coming months as oil prices move higher or lower. But the currently planned cuts, some of which have already occurred, are so severe that OIA risks falling back behind Miami International Airport as the busiest passenger airport in Florida.
Why Orlando?
Simply put, many travelers to Orlando are cheap.
Flights to Orlando are dominated by budget-conscious tourists who typically select an airline based on the lowest available fare, rather than any sort of brand loyalty. That has spawned intense competition here between low-cost carriers and legacy airlines.
That's good news for fares: The average cost of a round-trip ticket out of Orlando was about $259 during the fourth quarter of 2007 -- ranking OIA as 12th-cheapest of 100 airports across the country.
But that also means Orlando flights have become some of the biggest money-losers for airlines as oil prices have reached $140 a barrel, and it makes those flights obvious cost-cutting targets. Other tourist-heavy destinations -- such as Las Vegas and Honolulu -- are also being squeezed as airlines redeploy their jets to more profitable routes or ground them altogether
"If they're only making like $50, $60, $70 a leg [on Orlando flights] and they can make $200 a leg or $125 a leg somewhere else, it gets them closer to break-even," said Tom Parsons, chief executive of Bestfares.com.
Airlines also fear that travel to Orlando and other tourist destinations will trail off as the slumping economy forces consumers to scale back on spending or give up their vacation plans entirely. Orlando is "a heavily discretionary destination," aviation consultant Michael Boyd said.
And it'll get worse
The deepest cuts in Orlando will take effect in the fall, after the typically busy summer vacation season ends. Here's a look at how the number of seats available on flights out of OIA will shrink each month through the rest of the year, compared with the same months a year ago:
July... -4%
August... -6%
September... -11%
October... -12%
November... -13%
December... -13%
Effect on tourism
Fewer flights and higher fares make it all but inevitable that fewer people will travel to Orlando, said Abe Pizam, dean of the University of Central Florida's Rosen College of Hospitality Management.
"We will see a significant decline. Logic dictates it," Pizam said.
Many tourism executives say Americans have come to view vacations as a birthright -- something they are not willing to sacrifice even in a faltering economy. But Pizam said that even those vacationers could head elsewhere as it becomes harder to get to Orlando.
"People will not give up their annual vacation. But they will go where it's easier -- easier and cheaper," Pizam said. "That's the problem. This will really hurt us."
Executives at Orlando International Airport have discussed contingency plans in case flight counts and passenger traffic begin to drop -- eating into the airport's revenue, which is generated by everything from landing fees to concession sales. Airport Executive Director Steve Gardner said OIA could, if necessary, delay some construction projects or cut costs elsewhere.
But Gardner said it is still too early for such steps. It's possible that passenger traffic could hold steady despite the service cuts -- provided the airlines can sell more of the seats on their remaining flights. And oil prices are so volatile that schedules still could change.
"A lot of this forecast is very speculative, because a lot of it is based on the cost of fuel," Gardner said. "And I don't know what the cost of fuel is going to be tomorrow or next month, let alone October."
New markets
Although it is losing more markets than it is gaining, OIA will nonetheless have nonstop flights to four new destinations this October:
* Burlington, Vt. ( JetBlue Airways)
*Cancun, Mexico (JetBlue Airways)
*Myrtle Beach, S.C. ( Spirit Airlines)
*Santo Domingo, Dominican Republic (JetBlue Airways)
Orlando vs. Miami
Orlando International Airport surpassed Miami International Airport as Florida's busiest passenger airport in 2004. But airlines' upcoming service cuts will be more severe in Orlando than in Miami, which is less dependent on leisure travel and handles more overseas traffic.
Here's a look at how the two airports stack up:
Average daily departing seats
Oct. 2007 Oct. 2008 Change
From OIA 59,177 52,308 -11.6%
From MIA 55,260 55,154 -0.2%
Market shifts
The carriers flying certain routes out of Orlando also are changing, as some airlines try to gain an advantage from a rival's cuts. Some examples:
*Pittsburgh: US Airways plans to reduce the number of seats it flies between Orlando and Pittsburgh by about a quarter, but AirTran Airways plans a big increase on the route, and Southwest Airlines plans a smaller increase. Overall Orlando-Pittsburgh flights will rise.
*Richmond, Va.:s Delta Air Lines plans to eliminate all nonstop flights from OIA to Richmond, but AirTran plans to add flights between the markets. Overall, Orlando-Richmond flights will fall.
*San Juan, Puerto Rico: Delta and American Airlines will cancel nonstop flights to San Juan, and Spirit Airlines is trimming capacity. But AirTran and JetBlue Airways are expanding service to San Juan. Overall Orlando-San Juan flights will fall.
JetBlue: Bright spot
Despite record fuel prices and industry-wide turmoil, JetBlue Airways says it remains committed to expanding in Orlando. The Forest Hills, N.Y.-based carrier decided earlier this year to make Orlando a "focus city" of its flight network and is adding gates and flights at OIA.
The airline has added nonstop service from Orlando to four new markets since October, and company spokesman Bryan Baldwin said JetBlue sees room to add even more flights, particularly to Caribbean destinations.
"Orlando has proven itself to be very key and a huge piece of our route network," he said. "There's certainly room for growth, especially with the international service."
Jason Garcia can be reached at [email protected] or 407-420-5414.
Copyright © 2008, Orlando Sentinel
~~~~~~~~~~
Bottom line?
Expect crowded flights
Expect higher fares
Expect fewer choices of time of day to fly
Expect fewer non-stop flights
BOOK EARLY !!!
The upside (if there IS one) is that this might influence WDW and the other destinations in town to offer more specials and package deals. Time will tell.....
:(