Airports are facing a new normal as high fuel costs, airline mergers and the world economy shape the aviation industry. RDU, which has an $8 billion annual impact on our region, is adapting to these changes as we continue to be a major economic driver in our community.
In the midst of changes to our business model, we were fortunate to hear recently from Greg Principato, president of Airports Council International-North America, an organization that advocates and lobbies for, as well as promotes the needs of, commercial airports throughout our continent. Greg gave us four keys to a strong airport future.
The longevity of profitable routes are no guarantee. Airlines are scrambling for profit, especially among domestic routes, and are looking for every opportunity to maximize that profit. Airlines may discontinue a profitable route at one airport to move the aircraft and place it on a route that promises even more profit on another route.
Airlines are dictating travel patterns. As major airline consolidations have occurred over the years, there are fewer opportunities for passengers to choose how to fly from point A to point B. Just a few years ago, 10 airlines controlled 90 percent of the domestic market. Earlier this month, it was five airlines controlling 85 percent of domestic flights. And, with the recent merger of American Airlines and U.S. Airways it’s now just four airlines dictating the 85 percent of flights domestically.
Incentives are now expected. A few years ago, financial incentives to lure flights were a nice bonus. Today, they’re required. Airlines are expecting airports and communities to work together to pay-to-play to attract new service. This happens through public/private partnerships that guarantee revenue on flights, underwriting airport costs or pledges among the business community to use tickets exclusively on an airline launching a new flight.
Greg also reminded us that with an $8.6 billion impact, RDU is a huge economic engine for our region, and we must invest in that engine to keep the region’s economy healthy. He also shared about national efforts to change the way airport and aviation infrastructure is funded in order to give us more opportunities to improve our facilities for the future.