ACI-NA Small Airports Committee Meeting June 4, Tom Rafter, A.A.E.
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1 ACI-NA Small Airports Committee Meeting June 4, 2017 Tom Rafter, A.A.E.
2 Nantucket Memorial Airport
3 Today s Discussion Nantucket Overview The Island The Airport Unique Air Service Characteristics Impacts of National Trends Our Approach Small Community Air Service Current Status What happened - How Did We Get Here? What Does the Future Look Like and Next Steps
4 Nantucket Island Overview One Island, One County and One Town 10-15,000 Population Year Round 55-60,000 Seasonal Population Average Home Price - $900,000-$1,000,000 In 2011 Nantucket was the 12 th wealthiest county in America Numerous Accolades Number 1 hotel in U.S. (TripAdvisor) World s Best Island (National Geographic)
5 Multiple Markets Distinct and Separate Travel Markets on Nantucket * : 1. Year-round residents 2. Second home owners 3. Seasonal residents Primarily employed in the hospitality and retail trade industry 4. Non-resident visitors Short-term, typically two weeks or less 5. Short-term workers Daily and weekly commuters * Per ACK Master Plan Chapter 5 Part 6.
6 Nantucket Memorial Airport (Home of the TV Show Wings) Non Hub Airport 138,752 Enplanements (FY16) 106,186 Operations (FY16) On certain days ACK has exceeded BOS in # of Ops High Yield Market (due in part to short haul) Year Round Service 2 Airlines with 9 seat aircraft to Hyannis and Boston Seasonal Service (May-Oct) JetBlue BOS,JFK,DCA American - DCA Delta JFK,LGA United EWR Significant Corporate Aviation Traffic Over 300 Medevacs Annually
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11 Peak Season Air Service Patterns BOS Seasonal PVD HYA Year Round HPN MVY ACK LGA JFK DCA Jumpstart PVD June
12 Each mode change = more waiting Wait for connecting flight Bus HYA to BOS 2:00 Flight BOS-ACK :60 Dock to Bus :20 Flight ACK-HYA :20 Wait for flight or bus or ride or Wait for taxi/uber to bus station High Speed Ferry :60 Wait for Ferry of flight Jumpstart PVD June
13 Monthly Jet A Gallons Sold Per Fiscal Year 450, , , , Gallons 250, , , , , July Aug Sep Oct Nov Dec Jan Feb Mar Apr May June FY11 296, , , , , , , , , , , ,264.0 FY12 308, , , , , , , , , , , ,260.0 FY13 313, , , , , , , , , , , ,209.0 FY14 347, , , , , , , , , , , ,379.0 FY15 345, , , , , , , , , , , ,124.0 FY16 390, , , , , , , , , , , ,256.0 FY17 402, , , , , , , , , , ,
14 ACK Air Service Characteristics Year Round Service Local passenger s travel habits have been formed by what makes our market different from other airports in the national system. Short haul market (very short if Hyannis)/High Yield High frequency Low volume per flight/small aircraft Limited destinations (two) Flat Rate Fee Structure No peak/incremental pricing structure Commuter Books (selling 10 at a time) NO Over the road alternative No charge to change reservations Reservations no show, no penalty No bag fees (Cape Air now has for second bag) Limited interline connectivity (requires changing terminals in BOS)
15 ACK Air Service Characteristics Cont d Limited connectivity to the system (one stop beyond BOS often required) Limited competition High Fares Limited size of the market Only 1 of 2 means to get to/from the island NO TSA screening required (HYA) Able to show up for flight minutes before takeoff More concerned about your weight than the weight of your bag Seasonal Service Visitors and passengers using seasonal carriers also experience some aspects of our market that they may not be accustomed to. No loading bridges No baggage belt (claim) Limited destinations High Fares depending on direction/day of travel Predominant flow of traffic is one direction
16 Our Approach Educate the Community Joint chamber Meeting on Cape Cod Focus Group on Island with Chamber Members Identify/Quantify Demand Surveys Add to Shoulder Season (Wedding Season) Think Regional Partnership with Hyannis
17 Industry Overview a.record Profits b.understanding the Airline Business Terms etc. c.unbundling of fees tax free d.increased Fares e.record low fuel costs f. Airline Ancillary Revenues g.economy Class Vs Basic Economy (Delta) i. Adding more seats seating on B777 as opposed to ii. Decreasing seat pitch h.consolidation 80% of market controlled by 4 Carriers i. Senator Markey Proposed legislation to curb fees Forbid Airlines from Imposing Ridiculous Fees Act of 2016 (FAIR) Recent CNBC interview with Markey Fare vs. Revenue) j. Pilot shortage and other regulatory hurdles k.reduction/complete Loss of service
18 Impacts on Small Community Air Service
19 Small Airports Current Situation Regulatory constraints have resulted in decreases and complete loss of service for many small communities Small community constituents forced to drive longer for increased hassle and journey time Secondary impacts/unintended consequences of Congress dictating regulations without due process (1,500 hour rule) ACK and Regional Overview Accustomed to harsh travel conditions not simply created by weather High fares, long journey time and circuitous/hassle-laden travel experiences are fairly typical in off season (7-9 months/year) Loss of main connection to America in December of 2015 (Island Air) Cape Air BOS Summer Schedule reduced by 50% due to pilot shortage National Approach Unified Strategy Needed
20 Small Community Air Service How Did We Get Here? Deregulation Predatory pricing Ability to compete on level playing field Fuel Prices Over Regulation 1500 hour Nine seat Rest time Consolidation 4 Airlines control 80% of US Market Hub Consolidation Profit Making Ancillary Fees
21 Consolidation 80% of market controlled by 4 Carriers Graphic: Tal Yellin/CNN Money
22 How to Address the Pilot Shortage & Maintain Profits Upgauge aircraft Reduce Frequency Maximize Capacity and reduce seat pitch Reduce/close markets with thin profit margins Eliminate redundant/overlapping markets (consolidation)
23 9 Seat Rule From the Cranky Flier
24 Summary Nantucket as a Microcosm of Small Community Air Service Impacts Magnified because of Geographic Location Significant Financial/Economic Impacts on Loss/Reduction of Small Community Air Service Impact of Federal Government Overreach Resolution Unified National Approach/Strategic Grass Roots Efforts to Educate Communities
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