Rural air service study

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ARIZONA
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ARIZONA STATE AVIATION ¶ ~ YSTEM PLAN - VOLUME IV
u u h"-- L4,
• H-. The Airport Technology and Planning Group, Inc.
&• i lul l l= l .! = L~ ( AirTech)
TABLE OF CONTENTS
I1.
III.
EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Economic Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Arizona's Air Service Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
4. Study Airports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
5. Study Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
6. Data Gathering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
7. Service Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
8. Airport Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
9. Demand for Commercial Airline Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
10. Potential Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
11. Route Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
A. Bullhead City/ Laughlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
B. Flagstaff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
C. Grand Canyon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
D. Kingman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
E. Lake Havasu City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
F. Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
G. Prescott . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
H. Safford . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
I. Sedona . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
J. Show Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
K. Sierra Vista . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
L. Winslow- Holbrook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
M. Yuma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12. Findings and Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
INDUSTRY TRENDS AND REVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1- 1
1. Airline Industry Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1- 2
A. Major/ National Air Carrier Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1- 2
B. Regional/ Commuter Carrier Trends . . . . . . . . . . . . . . . . . . . . . . . . . . 1- 6
C. Impact of Trends of Arizona . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1- 9
2. Previous Air Service Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1- 11
A. Flagstaff Marketing Package . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1- 11
B. Commuter Air Service Feasibility Study . . . . . . . . . . . . . . . . . . . . . . 1- 13
C. Four Corners Commuter Air Service Study . . . . . . . . . . . . . . . . . . . 1- 14
3. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1- 16
INVENTORY OF AIR SERVICE AREAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 1
1. Airport Facility Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 1
2. Service Indexing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 1
A.
B.
C.
D.
E.
F.
Bullhead City ( Laughlin/ Bullhead City International) . . . . . . . . . . . . . . 2- 5
Flagstaff ( Flagstaff- Pulliam Airport) . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 6
Grand Canyon ( Grand Canyon National Park Airport) . . . . . . . . . . . . 2- 7
Kingman ( Kingman Airport) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 8
Lake Havasu City ( Lake Havasu City Municipal Airport) . . . . . . . . . . . 2- 9
Page ( Page Municipal Airport) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 10
.
.
.
A°
B.
I.
J.
K.
L.
M.
Prescott ( Ernest A. Love Field) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 11
Safford ( Safford Regional Airport) . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 12
Sedona ( Sedona Airport) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 13
Show Low ( Show Low Municipal Airport) . . . . . . . . . . . . . . . . . . . . . 2- 14
Sierra Vista ( Sierra Vista Municipal Airport) . . . . . . . . . . . . . . . . . . . 2- 16
Winslow ( Winslow Municipal Airport) . . . . . . . . . . . . . . . . . . . . . . . . 2- 17
Yuma ( Yuma International Airport) . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 17
A.
B.
C.
D.
Airport
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
Socioeconomic and Demographic Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 19
Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 19
Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 19
Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 21
Summary of Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 21
Meeting Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 21
Bullhead City ( Laughlin/ Bullhead City International) . . . . . . . . . . . . . 2- 23
Flagstaff ( Flagstaff- Pulliam Airport) . . . . . . . . . . . . . . . . . . . . . . . . . 2- 24
Grand Canyon ( Grand Canyon National Park Airport) . . . . . . . . . . . 2- 26
Kingman ( Kingman Airport) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 27
Lake Havasu City ( Lake Havasu City Municipal Airport) . . . . . . . . . . 2- 28
Page ( Page Municipal Airport) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 29
Prescott ( Ernest A. Love Field) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 30
Safford ( Safford Regional Airport) . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 31
Sedona ( Sedona Airport) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 32
Show Low ( Show Low Municipal Airport) . . . . . . . . . . . . . . . . . . . . . 2- 33
Sierra Vista ( Sierra Vista Municipal Airport) . . . . . . . . . . . . . . . . . . . 2- 35
Winslow ( Winslow Municipal Airport) . . . . . . . . . . . . . . . . . . . . . . . . 2- 35
Yuma ( Yuma International Airport) . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 36
Issues Addressed in Airport Meeting . . . . . . . . . . . . . . . . . . . . . . . . 2- 37~
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 39
IV. SURVEY ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3- 1
1. Passenger Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3- 1
2. Travel Agency Survey and Ticket Log . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3- 7
A. Travel Agency Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3- 7
B. Travel Agency Ticket Log . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3- 10
3. Business Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3- 12
4. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3- 14
V. SERVICE AREAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4- 1
1. Theoretical Service Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4- 1
.
A°
B.
C.
D.
Actual
A.
B.
C.
D.
E.
F.
MajodNational Commercial Service Airports . . . . . . . . . . . . . . . . . . . 4- 2
Regional/ commuter Commercial Service Airports . . . . . . . . . . . . . . . 4- 2
Potential Commercial Service Airports . . . . . . . . . . . . . . . . . . . . . . . . 4- 5
Statewide Commercial Service Coverage . . . . . . . . . . . . . . . . . . . . . . 4- 7
Market Service Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4- 9
Bullhead City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4- 11
Flagstaff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4- 11
Grand Canyon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4- 12
Kingman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4- 13
Lake Havasu City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4- 13
Page . . . . . . . . . : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4- 14
Table of Contents ( con't)
.
G. Prescott . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4- 14
H. Show Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4- 15
I. Sierra Vista . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4- 15
J. Yuma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4- 15
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4- 16
VI. MARKET POTENTIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 1
1. The Economic Significance of Commercial Airline Service . . . . . . . . . . . . . . 5- 4
2. Community Initiatives to Improve Commercial Airline Service . . . . . . . . . . . . 5- 4
A. Statewide Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 5
1. South Dakota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 5
2. North Dakota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 5
3. Minnesota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 6
4. Michigan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 6
5. Maine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 6
B. Airport- specific Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 7
1. Aspen, Eagle County, Steamboat Springs, Montrose, and
Durango, Colorado . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 7
2. Newport News, Virginia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 7
3. Gulfport, Mississippi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 7
C. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 8
.
.
Comparable Market Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 8
A. Factors Influencing Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 9
B. Comparison to Other Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 11
1. Large Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 13
2. Intermediate Communities . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 16
3. Small Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 17
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 18
VII. UNCONSTRAINED AND POTENTIAL DEMAND ESTIMATES . . . . . . . . . . . . . . . . . 6- 1
1. Existing Demand for Air Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 2
2. Potential Demand for Air Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 7
A. Bullhead City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 10
B. Flagstaff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 11
C. Grand Canyon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 11
D. Kingman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 12
E. Lake Havasu City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 12
F. Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 13
G. Prescott . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 13
H. Safford . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 14
I. Sedona . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 14
J. Show Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 15
K. Sierra Vista . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 15
L. Winslow- Holbrook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 16
M. Yuma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 16
3. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 17
Table of Contents ( con't)
VIII. ROUTE ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 1
1. Review of Airport Travel Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 2
2. Hub Evaluation and Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 5
A. Large Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 7
1. Bullhead City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 12
2. Flagstaff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 14
3. Yuma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 16
B. Intermediate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 18
1. Lake Havasu City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 20
2. Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 20
3. Prescott . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 23
4. Sierra Vista . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 25
C. Small Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 25
1. Kingman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 25
2. Safford . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 26
3. Sedona . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 26
4. Show Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 27
5. Winslow- Holbrook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 27
D. Grand Canyon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 27
E. Summary of Hub Assignment Process . . . . . . . . . . . . . . . . . . . . . . . 7- 28
3. Cost of Airline Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 28
A. Direct Available Seat Mile Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 29
B. Other Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 31
C. Load Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 32
Do Discussions with Airlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 34
4. Route Analysis Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 35
5. Results of the Air Service Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 39
A. Bullhead City/ Laughlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 39
B. Flagstaff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 44
C. Grand Canyon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 52
D. Kingman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 55
E. Lake Havasu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 62
F. Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 70
G. Prescott . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 76
H. Safford . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 81
I. Sedona . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 85
J. Show Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 85
K. Sierra Vista . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 92
L. Winslow- Holbrook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 92
M. Yuma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 98
N. Winslow- Holbrook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 91
6. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 102
Table of Contents ( con't)
IX.
X.
FINDINGS AND RECOMMENDATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 1
1. Summary of Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 1
A. Bullhead City/ Laughlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 1
B. Flagstaff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 4
C. Grand Canyon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 4
D. Kingman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 5
E. Lake Havasu City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 6
F. Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 6
G. Prescott . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 7
H. Safford . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 7
I. Sedona . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 8
J. Show Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 9
K. Sierra Vista . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 11
L. Winslow- Holbrook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 11
M. Yuma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 12
2. Sensitivity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 13
A. Demand Sensitivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 13
B. Aircraft Size Sensitivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 17
3. Operating Subsidy Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 19
4. Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 21
A. Statewide Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 22
B. Airport- Specific Action Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 25
1. Bullhead City/ Laughlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 26
2. Flagstaff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 27.
3. Grand Canyon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 27
4. Kingman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 28
5. Lake Havasu City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 29
6. Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 29
7. Prescott . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 29
8. Safford . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 30
9. Sedona . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 30
10. Show Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 31
11. Sierra Vista . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 31
12. Winslow- Holbrook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 31
13. Yuma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 32
5. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 32
APPENDICES
Appendix A
Appendix B
Appendix C
Appendix D
LIST OF TABLES
Table 2- 1
Table 2- 2
Table 2- 3
Table 2- 4
Table 2- 5
Table 2- 6
Table 2- 7
Table 2- 8
Table 2- 9
Table 2- 10
Table 2- 11
Table 2- 12
Table 2- 13
Table 2- 14
Table 2- 15
Table 2- 16
Table 3- 1
Table 3- 2
Table 3- 3
Table 3- 4
Table 5- 1
Table 5- 2
Table 6- 1
Table 6- 2
Table 6- 3
Table 6- 4
Table 6- 5
Table 7- 1
Table 7- 2
Table 7- 3
Table 7- 4
Table 7- 5
Table 7- 6
Table 7- 7
Table 7- 8
Table 7- 9
Table 7- 10
Table 7- 11
Table 7- 12
Table 7- 13
Table 7- 14
Table 7- 15
Existing Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 2
Traffic and Service Summary: Bullhead City, 1982- 1997 . . . . . . . . . . . . . . . . 2- 6
Traffic and Service
Traffic and Service
Traffic and Service
Traffic and Service
Traffic and Service
Traffic and Service
Traffic and Service
Traffic and Service
Traffic and Service
Traffic and Service
Traffic and Service
Summary:
Summary:
Summary:
Summary:
Summary:
Summary:
Summary:
Summary:
Summary:
Summary:
Summary:
Flagstaff, 1982- 1997 . . . . . . . . . . . . . . . . . . . 2- 7
Grand Canyon, 1982- 1997 . . . . . . . . . . . . . . . 2- 8
Kingman, 1982- 1997 . . . . . . . . . . . . . . . . . . . 2- 9
Lake Havasu City, 1982- 1997 . . . . . . . . . . . 2- 10
Page, 1982- 1997 . . . . . . . . . . . . . . . . . . . . . 2- 11
Prescott, 1982- 1997 . . . . . . . . . . . . . . . . . . . 2- 12
Safford, 1982- 1997 . . . . . . . . . . . . . . . . . . . 2- 13
Sedona, 1982- 1997 . . . . . . . . . . . . . . . . . . . 2- 14
Show Low, 1982- 1997 . . . . . . . . . . . . . . . . . 2- 15
Sierra Vista, 1982- 1997 . . . . . . . . . . . . . . . . 2- 16
Winslow, 1982- 1997 . . . . . . . . . . . . . . . . . . . 2- 17
Traffic and Service Summary: Yuma, 1982- 1997 . . . . . . . . . . . . . . . . . . . . . 2- 18
Socioeconomic Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 20
Issues Raised at Airport Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 38
Passenger Survey Summary ( Distribution and Departures) . . . . . . . . . . . . . . 3- 4
Passenger Survey Summary ( Trip Purposes) . . . . . . . . . . . . . . . . . . . . . . . . 3- 5
Passenger Survey Summary ( Other Statistics for Majority) . . . . . . . . . . . . . . 3- 6
Travel Agent Survey Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3- 9
Socioeconomic and Demographic Factors for Study Communities . . . . . . . 5- 10
Comparable Market Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5- 14,
1997 Enplanements at Study Airports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 3
Enplanements Per Capita Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 4~
Average Capture Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 6
Unconstrained Demand Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 8
Summary of Demand Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6- 18
Regional Demand by Airport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 6
Potential Annual Enplanements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 7
Distance from Large Communities to Hubs . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 8
Daily Nonstop Departures by Hub Airport by State . . . . . . . . . . . . . . . . . . . . 7- 9
Demand Allocation by State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 11
Bullhead City Hub Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 13
Flagstaff Hub Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 15
Yuma Hub Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 17
Demand Allocation State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 19
Lake Havasu City Hub Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 20
Page Hub Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 22
Prescott Hub Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 24
Comparison of Direct Operating Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 31
Route Analysis Bullhead City - Las Vegas, B- 737- 300 . . . . . . . . . . . . . . . . . 7- 40
Route Analysis Bullhead City - Los Angeles, B- 737- 300 . . . . . . . . . . . . . . 7- 41
List of Tables ( con't)
Table 7- 16 Route Analysis
Table 7- 17 Route Analysis
Table 7- 18 Route Analysis
Table 7- 19 Route Analysis
Table 7- 20 Route Analysis
Table 7- 21 Route Analysis
Table 7- 22 Route Analysis
Table 7- 23 Route Analysis
Table 7- 24 Route Analysis
Table 7- 25 Route Analysis
Table 7- 26 Route Analysis
Table 7- 27 Route Analysis
Table 7- 28 Route Analysis
Table 7- 29 Route Analysis
Table 7- 30 Route
Table 7- 31 Route
Table 7- 32 Route
Table 7- 33 Route
Table 7- 34 Route
Table 7- 35 Route
Table 7- 36 Route
Table 7- 37 Route
Table 7- 38 Route Analysis
Table 7- 39 Route Analysis
Table 7- 40 Route Analysis
Table 7- 41 Route Analysis
Table 7- 42 Route Analysis
Table 7- 43 Route Analysis
Table 7- 44 Route Analysis
Table 7- 45 Route Analysis
Table 7- 46 Route Analysis
Table 7- 47 Route Analysis
Table 7- 48 Route Analysis
Table 7- 49 Route Analysis
Table 7- 50 Route Analysis
Bullhead City - Phoenix, DASH- 8- 200B . . . . . . . . . . . . . . . . 7-- 42
Flagstaff City - Las Vegas, EMBRAER 120 . . . . . . . . . . . . . 7- 45
Flagstaff City - Las Vegas, CANADAIR R J- 100 . . . . . . . . . 7- 46
Flagstaff City - Los Angeles, CANADAIR R J- 100 . . . . . . . . 7- 47
Flagstaff City - Los Angeles, EMBRAER 120 . . . . . . . . . . . 7- 48
Flagstaff City - Phoenix, DASH- 8- 200B( LAS) . . . . . . . . . . 7- 49
Flagstaff City - Phoenix, DASH- 8- 200B( LAS) . . . . . . . . . . . 7- 50
Grand Canyon - Phoenix, BEECH 1900 . . . . . . . . . . . . . . . 7- 54
Kingman - Phoenix, BEECH 1900 ( 7- Day Schedule) . . . . . . 7- 56
Kingman - Phoenix, BEECH King Air ( 7- Day Schedule) . . . 7- 57
Kingman - Phoenix, BEECH 1900 ( 6- Day Schedule) . . . . . . 7- 58
Kingman - Phoenix, BEECH KING AIR( 6- Day Schedule) .. 7- 59
Kingman - Las Vegas, BEECH 1900 ( 7 - Day Schedule) o.. 7- 60
Kingman - Las Vegas, EMBRAER 120 ( 7 - Day Schedule) 7- 61
Analysis Lake Havasu City - Las Vegas,
EMBRAER 120 ( All Demand) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 63
Analysis Lake Havasu City - Las Vegas,
BEECH 1900 ( All Demand) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 64
Analysis Lake Havasu City - Phoenix,
DASH- 8- 200B ( All Demand) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 65
Analysis Lake Havasu City - Phoenix,
BEECH 1900 ( All Demand) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 66
Analysis Lake Havasu City - Las Vegas,
EMBRAER 120 ( Two- Hub Scenario) . . . . . . . . . . . . . . . . . . . . . . . . . 7- 67
Analysis Lake Havasu City - Las Vegas,
BEECH 1900( Two- Hub Scenario) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 68
Analysis Lake Havasu City - Phoenix,
BEECH 1900( Two- Hub Scenario) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Analysis Page - Phoenix, DASH- 8- 200B ( All Demand) . . . . . . . . . . .
Page - Phoenix, BEECH 1900( AII Demand) . . . . . . . . . . . . .
Page - Las Vegas, EMBRAER 120 ( Two- Hub Scenario) . . .
Page - Phoenix, BEECH 1900( Two- Hub Scenario) . . . . . . .
Prescott - Phoenix, DASH- 8- 200B ( All Demand) . . . . . . . . .
Prescott- Phoenix, BEECH 1900( AII Demand) . . . . . . . . . .
Prescott - Las Vegas, BEECH 1900( Two- Hub Scenario) ..
Prescott - Phoenix, BEECH 1900( Two- Hub Scenario) . . . .
Safford - Phoenix. BEECH 1900 ( 7- Day Schedule) . . . . . . .
Safford - Phoenix BEECH KING AIR ( 7- Day Schedule) . . .
Safford - Phoenix BEECH KING AIR ( 6- Day Schedule) . . .
Sedona - Phoenix BEECH 1900 ( 7- Day Schedule) . . . . . .
Sedona - Phoenix BEECH KING AIR ( 7- Day Schedule)...
Sedona - Phoenix BEECH KING AIR ( 6- Day Schedule)...
7- 69
7- 72
7- 73
7- 74
7- 75
7- 77
7- 78
7- 79
7- 80
7- 82
7- 83
7- 84
7- 86
7- 87
7- 88
List of Tables ( con't)
Table 7- 51
Table 7- 52
Table 7- 53
Table 7- 54
Table 7- 55
Table 7- 56
Table 7- 57
Table 7- 58
Table 7- 59
Table 7- 59
Table 7- 59
Table 8- 1
Table 8- 1
Table 8- 2
Table 8- 3
Table 8- 4
Table 8- 5
Route Analysis Show Low - Phoenix,
BEECH 1900 ( 7- Day Schedule) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7- 89
Route Analysis Show Low - Phoenix,
BEECH KING AIR ( 7- Day Schedule) . . . . . . . . . . . . . . . . . . . . . . . . . 7- 90
Route Analysis Show Low - Phoenix,
BEECH KING AIR ( 6- Day Schedule) . . . . . . . . . . . . . . . . . . . . . . . . . 7- 91
Route Analysis Sierra Vista - Phoenix, DASH- 8- 200B . . . . . . . . . . . . . . . . . 7- 93
Route Analysis Sierra Vista - Phoenix, BEECH 1900 . . . . . . . . . . . . . . . . . . 7- 94
Route Analysis Winslow - Phoenix, BEECH 1900 ( 7- Day Schedule) . . . . . . 7- 95
Route Analysis Winslow - Phoenix, BEECH KING AIR ( 7- Day Schedule) o. 7- 96
Route Analysis Winslow - Phoenix, BEECH KING AIR ( 6- Day Schedule) .. 7- 97
Route Analysis Yuma - Los Angeles, CANADAIR R J- 100 . . . . . . . . . . . . . . 7- 99
Route Analysis Yuma - Phoenix, Los Angeles, EMBRAER 120 . . . . . . . . . 7- 100
Route Analysis Yuma - Phoenix, Phoenix, DASH- 8- 200B . . . . . . . . . . . . . 7- 101
Existing Service ( Page 1 of 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 2
Summary of Service Improvements( Page 2 of 2) . . . . . . . . . . . . . . . . . . . . . . 8- 3
Demand Sensitivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 14
Impact of 10% Demand Reduction on Route Analysis Findings . . . . . . . . . . 8- 16
Aircraft Sensitivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 19
Operating Subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8- 21
LIST OF EXHIBIT
Exhibit 2- 1
Exhibit 4- 1
Exhibit 4- 2
Exhibit 4- 3
Exhibit 4- 4
Exhibit 4- 5
Exhibit 7- 1
Exhibit 7- 2
Communities Analyzed in Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2- 22
Theoretical Major/ National Airport Service Areas . . . . . . . . . . . . . . . . . . . . 4- 3
Theoretical Airport Service Areas ( Existing) . . . . . . . . . . . . . . . . . . . . . . . . 4- 4
Theoretical Airport Service Areas ( Potential) . . . . . . . . . . . . . . . . . . . . . . . 4- 6
Theoretical Existing & Potential Service Areas . . . . . . . . . . . . . . . . . . . . . 4- 8
Actual Airport Service Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4- 10
Geographic Distribution of Demand for Study Airports . . . . . . . . . . . . . . . 7- 4
Air Service Model Route Analysis Summary . . . . . . . . . . . . . . . . . . . . . . 7- 36
A D 0 T A eron atttics Division
Arizona Rural Air Seta, ice Study August 1999
EXECUTIVESUMMARY
1. INTRODUCTION
Since deregulation of the nation's commercial airlines more than twenty years ago, scheduled
commercial airline service in Arizona has undergone notable change. Smaller and more rural
communities in Arizona have been most noticeably impacted by changes in commercial airline
service since deregulation. Concurrently with these changes has come statewide recognition related
to the economic significance and importance of scheduled commercial airline service. While the
economy of each state is, to some extent, linked to the availability of scheduled commercial airline
service, commercial airline service in Arizona is particularly important due to the high level of
tourism that supports Arizona's economy.
2. ECONOMIC CONTRIBUTION
A recent study, The Economic Impact of Aviation in Arizona, 1998, by the Arizona Department of
Transportation ( ADOT) showed that when all benefits related to businesses that support commercial
airline activity and to visitors who arrive in Arizona via a scheduled commercial airline are
measured, commercial airline activity has a substantial impact on the State's economy. Visitors
arriving on commercial airlines and on- airport businesses supporting commercial airline activities
are responsible for over 75,081 jobs throughout Arizona. These jobs have an estimated annual
payroll that exceeds $ 1.7 billion. Activities related to commercial airports in Arizona and to the
visitors who arrive via these airports account for over $ 5.6 billion in annual economic activity. This
means that for every person who boards a commercial airline flight in Arizona, an estimated $ 650
in annual economic activity transpires.
These figures help to demonstrate the importance of commercial airline service to Arizona's smaller
communities, not just from the standpoint of transportation, but also from the standpoint of local,
regional, and statewide economies. Recognizing both the important transportation and economic
roles that commercial airline service plays in Arizona, the Aeronautics Division undertook a study
to identify opportunities for improving service to smaller communities throughout the State; this
report summarizes the findings of that study.
3. ARIZONA'S AIR SERVICE ENVIRONMENT
Scheduled commercial airline service in Arizona is influenced by numerous factors. While some
of these factors relate to the characteristics of the State, others relate to events in the airline industry
which are more national in their scope and impact. The commercial airline industry is continually
changing; with change can come opportunity. One of the primary objectives of the Arizona Air
Service Study is to provide data on both a statewide and local basis that can be used to respond to
The Airport Technology and Planning Group, Inc. ( AirTech) executive summary- 1
A D 0 T A eronatttics Division
Arizona Rural Air Sen, ice Stud), August 1999
opportunities for new or improved commercial airline service. New and/ or improved commercial
airline service to communities analyzed in the Arizona Air Service Study will be affected by several
important factors. These factors include the following:
• Low volumes of passenger traffic at study airports
Limited number of airline connecting hubs that are within traditional range of
regional/ commuter aircraft from study airports
Significant level of commercial airline service available at larger, competing airports, most
notably Phoenix Sky Harbor International
Shift of regional/ commuter carriers to jet equipment and to aircraft with larger seating
capacities
Significant level of passenger demand that is discretionary in nature, leading to greater
sensitivity
These, and other factors influence the economic feasibility of improving commercial airline service
to airports analyzed in the Arizona Air Service Study. Since a primary objective of the study was
to identify air service improvements that could realistically be implemented, these factors were
weighed and considered accordingly in developing this study's final recommendations.
4. STUDY AIRPORTS
The Arizona Air Service Study was undertaken by the Arizona Department of Transportation,
Aeronautics Division, in the summer of 1998. The study focused on identifying viable opportunities
to improve scheduled commercial airline service at 10 Arizona airports that presently have
commercial airline service, and three additional airports that once supported commercial airline
service and could have the ability to support such service again. While Phoenix and Tucson both
have a significant level of commercial airline service, the focus of this analysis was on smaller, more
rural commercial airline markets within Arizona.
Airports analyzed in the study that presently have scheduled commercial airline service include
facilities serving Bullhead City, Flagstaff, Grand Canyon, Kingman, Lake Havasu City, Page,
Prescott, Show Low, Sierra Vista, and Yuma. The three additional airports that were analyzed to
determine their ability support new service included facilities serving Safford, Sedona, and Winslow.
5. STUDY METHODOLOGY
The primary objective of the Arizona Air Service Study was to identify opportunities for improving
scheduled airline service to and from the study airports. An underlying premise for this analysis was
that all service improvements identified should be economically viable from the viewpoint of any
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carrier who would be a candidate to provide the identified service. To accomplish this objective, the
air service analysis was undertaken in a series of separate but interrelated tasks.
Efforts were undertaken to gather data on each of the communities served by study airports. These
efforts included surveys of the traveling public and travel agents throughout the State. Meetings
were also held in conjunction with each study airport to obtain local input related to air service
concerns and issues. Secondary data sources were reviewed to obtain information on current service
levels and travel patterns, existing and historic passenger volumes, and top travel destinations. As
this information was available, it was collected and documented for each of the study airports.
Data obtained were used to establish theoretical and actual service areas for each of the study
airports. Determining service areas was important to understanding how the airports compete with
one another, as well as with larger, more distant commercial airports both within and beyond
Arizona. Establishing an actual market area for each of the study airports was also essential to
determining the total level of unconstrained demand for commercial airline travel that is associated
with each airport.
The study identified total annual volumes of commercial airline travel that are associated with each
study airport. These levels of total unconstrained demand levels represent all commercial airline
travelers, both residents of Arizona and visitors to the State, associated with each airport. Existing
enplanements for study airports, that presently have scheduled airline service, were used to show the
percent of total demand for commercial airline travel that each study airport currently captures.
Recognizing that passengers from Arizona's smaller market areas will continue to leave their local
market areas to begin their airline travel from larger, competing commercial airports, estimates of
potential demand were also developed. Potential demand estimates represent realistic enplanement
levels for each study airport, thus giving continued competition for passengers.
Potential demand estimates were then analyzed using a computer model to determine the ability of
each study airport to support new or improved commercial airline service. Results of the route
analysis formed the basis of the study's final recommendations. Specific follow- on activities for
individual communities and the State were documented in the study's action plan.
6. DATA GATHERING
Comprehensive diagnostics effort was the first step in analyzing opportunities for improving
commercial airline service to study airports. As part of this diagnostics effort, a series of meetings
were held throughout the State to provide each community the opportunity to provide direct input
into the study. These meetings provided businesses, airlines, airport management, tourism
representatives, community leaders, economic development interests, and others a forum to discuss
air service issues and concerns specific to their community.
Passenger surveys were conducted to gather information from both residents of Arizona and visitors
to the State who are using existing service at each of the study airports. Travel agents in proximity
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to the study airports were also contacted to provide additional insight for each community.
Information obtained from the diagnostics effort included:
• Size of each airport's actual market area
Percentage of air travelers using the local airport, as opposed to a more distant competing
airport
• Reasons for passenger erosion from each local market
• Attraction of Arizona air travelers to out- of- state airports
• Air service improvements desired by each study airport
Information obtained from the diagnostics effort was used in the technical analysis of the Arizona
Air Service Study
7. SERVICE AREAS
According to the Federal Aviation Administration ( FAA), a typical service area for an airport that
is served by regional/ commuter airlines is a 60 minutes drive time. In the highly competitive airline
environment, however, many smaller airports have found it difficult to attract passengers within their
" theoretical" service areas. When faced with competition from larger airports, many small
commercial service airports have " actual" service areas that are substantially smaller than their
theoretical service area. Such is the case for most of the Arizona study airports.
As a result of competition from Phoenix, Tucson, Las Vegas, and to a lesser extent, Los Angeles,
the radius for passenger attraction is much smaller than 60 minutes for most study airports. Results
of this diagnostics effort showed that not only do the study airports compete with larger, more distant
commercial service airports, but also with one another. For example, passenger and travel agent
survey results show that Bullhead City, Lake Havasu, and Kingman often compete for the same
passengers as do Flagstaff, Grand Canyon, and Prescott.
8. AIRPORT COVERAGE
Results of the diagnostics effort showed that Arizona air travelers usually have several choices for
a departure airport. In most cases, both resident and visitor- related air travelers are using an Arizona
airport to begin or end their commercial airline travel. For communities in the northwestern portion
of the State, however, a measurable level of passenger erosion to Las Vegas International takes
place. Diagnostic efforts also showed that some passenger diversion from the Yuma service area
takes place to Los Angeles. A small number of air travelers also reportedly exit the State to begin
their commercial airline travel from Albuquerque.
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Survey results indicated that a relatively small number of commercial airline travelers from
neighboring states use commercial airports in Arizona to begin their airline trips. These same survey
results also showed, however, that study airports loose a significant portion of the demand that is
associated with their local markets to both Phoenix and Tucson, but primarily to Phoenix. When
service areas for the State's commercial airports are considered, along with the additional coverage
that is provided by airports in neighboring states, all major population centers, and almost all of the
State, geographically fall within a one to two- hour radius of one or more commercial service
airports.
9. DEMAND FOR COMMERCIAL AIRLINE TRAVEL
The demand for commercial airline service is influenced by a number of factors. These factors
include total population, income levels, employment levels, type of employment, age of population,
tourism, and other similar factors. Each of the study airports annually record the level of
enplanements, the number of airline travelers that board at that particular airport. It is important for
each airport to understand the number of total passengers that are associated with their service area
and the percentage of that which is lost through passenger erosion to competing airports.
Based on the factors noted above, each service area has a level of total unconstrained demand for
commercial airline travel. Each study airport's current level of annual enplaned passengers
represents the percentage of the airport's total unconstrained demand for commercial air travel that
it presently captures. The ability of each study airport to capture the demand for commercial airline
travel in its service area is based on a number of factors such as the type of aircraft that serves the
airport, the number of daily flights, the cost and reliability of the service, and the proximity of larger
competing airports.
10. POTENTIAL DEMAND
This study's diagnostic efforts show that there are numerous reasons why air travelers leave the
service area of their local airport to begin commercial airline trips from more distant, competing
airport. For study airports throughout Arizona, reliability of service and fares are reportedly the
primary reasons for passenger erosion. Other factors that contribute to passenger erosion include
size of the aircraft that serves the airport, the frequency with which service is provided, the number
of airlines which provide service, scheduled arrival and departure times, the availability of non- stop
versus connecting flights, and the connecting hubs that are served.
Due to the proximity of Phoenix, Tucson, and Las Vegas to the study airports, continued passenger
erosion can be expected, even if viable service improvements are implemented throughout the State.
Each study airport's level of competition to determine what percentage of its total unconstrained
demand for commercial airline travel it may be able to capture, given reasonable service
improvements. This level of demand is referred to in the study as " potential" demand. Potential
demand estimates for each of the study airports were used in the route analysis to determine new
or improved service that may be supported at each study airport.
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11. ROUTE ANALYSIS
A computerized model was used to evaluate commercial air service opportunities for each of the
study airports. Analysis focused on identifying air service improvements that could be supported
if each study airport's existing commercial airline service stayed in place and continued to capture
each airport's existing level of annual enplanements. As a result of the level of demand associated
with several of the study airports, many will remain candidates for service only with smaller,
traditional turboprop regional/ commuter aircraft. The few number of airline connecting hubs in
proximity also limits additional air service opportunities for many of the study airports.
In some instances, the route analysis revealed that existing service could be enhanced to existing
connecting hubs either through more flights or with aircraft with larger seating capacities. For some
airports, the route analysis demonstrated the airport's ability to support new service to an additional
airline hub. Results of the route analysis showed that each study airport's ability to improve its
commercial airline service varies. Further, circumstances at some of the study airports indicated that
follow- on efforts will be needed solely to focus on maintaining existing commercial airline service.
Opportunities for improving commercial airline service for each of the study airports are discussed
below.
A. Bullhead City/ Laughlin
Existing service to this market consists of four daily round trip flights on the Beech 1900 to
Phoenix. Estimates of potential passenger demand for this market, however, indicate if the
airport is able to capture a higher percentage of its unconstrained demand for commercial
airline travel, scheduled airline service to an additional hub appears economically feasible.
Results of the route analysis show that Bullhead City/ Laughlin may be capable of supporting
either three or four daily round trip flights on a Boeing 737 aircraft to either Los Angeles or
Las Vegas. In addition, the route analysis shows that with potential demand levels, not only
can this market support new service to either Los Angeles or Las Vegas, but it can also
support upgraded service to Phoenix. Results of the route analysis showed that the airport
may be capable of supporting up to eight daily round trips to Phoenix on a Dash- 8 aircraft.
RECOMMENDATION: Work with incumbent carrier to secure larger aircraft and increased
flight frequency to Phoenix. Determine, on the local level, whether service to Las Vegas or
to Los Angeles best meets the community's needs and prepare further analysis and
marketing strategies to attract a carrier that would provide service to a second hub.
B. Flagstaff
Scheduled commercial airline service in this market consists of eight daily flights to Phoenix
using both the Beech 1900 and the Dash- 8- 200B. In addition to service to Phoenix, the route
analysis model showed that if potential demand levels are captured, this airport may also be
capable of supporting scheduled airline service to either Las Vegas or Los Angeles. Using
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a 30- passenger Embraer aircraft, the route analysis model indicated that seven daily flights
between Flagstaff and Las Vegas would be economically viable. On this same route, a total
of six daily round trips could be supported operating the Canadair Regional Jet. As an
alternative to new service to Las Vegas, the route analysis indicated that with potential
demand estimates, Flagstaffcould support six economically viable round trips per day on the
30- passenger Embraer to Los Angeles or five daily round trips on the Canadair Regional Jet.
In addition to supporting new service to an additional hub, either Las Vegas or Los Angeles,
the route analysis indicated that the Flagstaff market may also be capable of supporting
improved service to Phoenix. If new service were provided to Las Vegas. 10 daily round
trips on the Dash- 8 between Flagstaff and Phoenix could be supported. If new service to Los
Angeles were implemented, 11 daily round trips between Phoenix and Flagstaff would be
financially feasible.
RECOMMENDATION: Work with current carrier to upgrade all flights to Phoenix to the
Dash- 8 aircraft and to increase the daily frequency of these flights. Take local initiatives to
determine if additional airline service to Las Vegas or Los Angeles is best suited to the
community and take further action to attract additional scheduled airline service to one or the
other of these two airline hubs.
C. Grand Canyon
Grand Canyon National Park Airport currently does not have regularly scheduled
commercial airline service. The airport is, however, served by a large number of charter
carriers. Results of the route analysis showed that non- Canyon related passenger demand
should be able to support up to three profitable daily round trips between the airport and
Phoenix. This service would be provided on the Beech 1900 aircraft.
RECOMMENDATION: The airport should work with carriers who would be candidates to
provide regularly scheduled commercial air service between the Grand Canyon and Phoenix.
D. Kingman
Kingman's current commercial airline service is subsidized through the EAS program. In
addition, flights that originate in Kingman stop in Prescott before continuing on to Phoenix.
A Beech 1900 is presently used to serve the market, and four daily " shared" round trips are
provided on this aircraft. This study's potential demand estimates indicate that if Kingman
were served as a stand alone market without subsidy, it would have the ability to support
only one profitable round trip flight on the Beech 1900 to Phoenix. This finding indicates
that without EAS subsidy and commercial aircraft with smaller seating capacities, scheduled
commercial airline service in this market could be at risk.
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RECOMMENDATION: This market does not appear to have sufficient passenger demand
to support profitable commercial airline service. It appears that continued operating
subsidies will be required to maintain service in this market. Steps on the local level should
include exploratory talks with other communities who may need to rely on smaller 9-
passenger aircraft and on identifying local funding sources in the event that the federal EAS
program is curtailed or eliminated.
E. Lake Havasu City
Lake Havasu City currently has four daily round trip flights on the Beech 1900 to Phoenix.
The route analysis indicated that with potential demand levels identified for this market, the
aircraft could be upgraded to a Dash- 8 with four daily round trips continuing to be supported.
If service were provided to Las Vegas instead of Phoenix, the route analysis indicated that
five daily round trips on a 30- passenger Embraer aircraft or six daily round trips on a Beech
1900 could be supported. The route analysis indicated that if existing service to Phoenix is
maintained on the Beech 1900 at its current frequency, Lake Havasu City has only limited
capability to support service to a second airline hub; only one daily round trip to Las Vegas
is economically viable according to model results. Potential demand levels for this market
indicated that focusing service on one hub may be preferable to splitting passenger demand
between two airline hubs.
RECOMMENDATION: Focus on maintaining and improving service to Phoenix. Work
with the incumbent carrier to increase the number of daily flights on the Beech 1900 between
Lake Havasu City and Phoenix or work to maintain the current daily round trip flight
frequency of four and seek to obtain service on the Dash- 8 aircraft. The latter of these efforts
may serve this community better in the long- term as carriers retire thel 9- seat aircraft.
F. Page
Page presently has scheduled commercial airline service to Phoenix; this service is provided
on the Beech 1900 at a frequency of three daily round trips. Using potential demand
estimates developed in this study, the route analysis model indicated that this market may
be able to support six daily round trips to Phoenix on the larger Dash- 8 aircraft. If the
smaller Beech 1900 continues to provide the service between Page and Phoenix, the model
indicated that eight daily round trips appear economically viable. The route analysis
indicated that the level of service between Page and Phoenix on the Beech 1900 could be
increased to four daily round trips and that sufficient demand could also be available to
support three daily round trips on the 30- passenger Embraer to Las Vegas. For Page, either
improved service to Phoenix appears viable or current Phoenix service could be maintained
and additional service to Las Vegas implemented. It is important to note that existing service
to Page is subsidized through the EAS program; this indicates that achieving potential
passenger demand estimates for this market may be difficult.
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RECOMMENDATION: Efforts on the local level should be taken to increase ridership to
a level that scheduled airline service can be supported without operating subsidies. While
this community theocratically has the ability to support service to an additional hub, given
its history, it may be more prudent for the community to first work with its incumbent carrier
to increase flight frequency and to implement the use of aircraft with higher seating
capacities on the route between Page and Phoenix.
G. Prescott
Prescott's existing commercial air service to Phoenix is linked with service that originates
at Kingman. Commercial airline service at both Kingman and Prescott is presently
subsidized through the EAS program. There are four daily round trips to Phoenix on the
Beech 1900 that are shared by these two markets. If Prescott were able to capture all of its
potential passenger demand, the route analysis indicated that Prescott could support four
daily round trips on the larger Dash- 8 aircraft or six daily round trips on the Beech 1900 to
Phoenix. Again, assuming that Prescott is capable of capturing its potential enplanement
estimate, the market's current service ( three daily round trips to Phoenix on the Beech 1900)
could be maintained and additional service ( two flights per day on the Beech 1900) could be
implemented to Las Vegas.
RECOMMENDATION: Current airline service in this market is linked with Kingman. As
its number one priority, the community should work to increase its enplanements with two
goals in mind. One being to support airline service which is independent of another
community and the other to attract a level of demand that results in profitable service,
independent of operating subsidies. The community should initially focus on securing larger
aircraft and an increased frequency of daily flights to Phoenix before pursuing other air
service improvements that may be possible.
H. Safford
Although Safford is currently without scheduled commercial airline service, it was examined
for its ability to support financially self- sufficient airline operations in the near future. The
route analysis showed that, based on potential demand levels estimated for this market, only
one daily round trip on the Beech 1900 to Phoenix could be operated at a profit. By serving
the market with a smaller aircraft such as the nine passenger Beech King Air and reducing
service from seven to six days a week, the Safford market could support two profitable round
trip flights per day.
RECOMMENDATION: There does not appear to be sufficient demand in this market to
support a modest level of scheduled commercial airline activity which is economically self-sustaining.
If commercial airline service is a priority in this market, the community may
wish to explore the Show Low model and should identify local funding sources to subsidize
airline service.
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ADOT Aeronautics Division
Arizona Rural Air Service Stud), August 1999
I. Sedona
Scheduled commercial airline service is not presently available in this market, but its notable
level of tourism indicates that potential demand levels may be sufficient to support at least
a modest level of scheduled airline service. Using the nine- passenger Beech King Air and
a six day per week flight schedule, the route analysis indicated that Sedona may be capable
of supporting three profitable daily round trips to Phoenix.
RECOMMENDATION: Sedona should also consider following the Show Low model if the
community determines that commercial airline service is a priority. The level of demand
identified for this market and competition from other commercial airports indicated that local
financial support may be required to initiate and sustain commercial airline service. This
market does not appear to be a candidate for the larger regional/ commuter carriers that
operate in Arizona.
J. Show Low
Three flights per day on the Beech King Air are currently provided between Show Low and
Phoenix. Results of the route analysis for this market showed that if service were upgraded
to a Beech 1900, only one round trip per day would be financially feasible. Based on the
market's estimated demand potential, three daily round trips between Show Low and
Phoenix on the nine- passenger Beech King Air appear to be profitable. This indicates that
existing service is well matched to the market's characteristics.
RECOMMENDATION: The market's existing approach to providing commercial airline
service appears to be well- matched to the community's capabilities for supporting scheduled
service. The community's pragmatic approach to providing access to the nation's air
transportation system should serve as a model for other small communities examined in this
study.
K. Sierra Vista
Existing scheduled commercial airline service to this market consists of five round trips per
day to Phoenix on the Beech 1900. Among study airports, Sierra Vista is somewhat unique.
It has the most significant level of passenger erosion among all study airports, and its
geographic location within Arizona limit its ability to be connected to either Las Vegas or
Los Angeles by turboprop aircraft. The route analysis for this market focused accordingly
on its ability to support improved commercial airline service to Phoenix. If Sierra Vista were
able to capture its potential demand, the number of round trips to Phoenix on the Beech 1900
could theoretically be increased from the current level of five to seven.
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RECOMMENDATION: This community should work with its incumbent carrier to upgrade
the size of the aircraft serving the market while maintaining the current flight frequency.
Demand levels in this market are borderline for being able to support larger turboprop
aircraft, but a larger aircraft cannot be supported at the market's current daily flight
frequency. If larger aircraft are used in this market, flight frequencies would need to be
reduced or local operating subsidies provided.
L. Winslow- Holbrook
Winslow is presently without scheduled commercial airline service. Several different route
analyses were undertaken for this market to examine its ability to support profitable
commercial air travel. Results of the route analysis indicated that by operating the nine-passenger
Beech King Air on a six day per week schedule, the market could support one
profitable round trip to Phoenix.
RECOMMENDATION: Demand in this market may not warrant the pursuit of scheduled
commercial airline service. The Show Low model for commercial airline service would have
a difficult time succeeding in this market. If commercial airline service is pursued, a local
source for subsidization of airline service should be identified as a first step.
M. Yuma
Yuma is the only study airport that presently has regularly scheduled airline service to two
hubs, those being Los Angeles and Phoenix. Results of the route analysis indicated that
Yuma can support improved service to both of its existing hubs. Service to Los Angeles is
presently provided on a 30- passenger aircraft at a frequency of five round trips per day. The
route analysis showed that Yuma is capable of supporting 9 daily round trips on a 30- seat
aircraft to Los Angeles or 7 daily round trips on a 50- passenger regional jet. Service to
Phoenix now consists of six daily round trips; this service is provided by a mix of Dash- 8
and Beech 1900 aircraft. The route analysis also showed that Yuma can support up to five
profitable daily round trips to Phoenix, all on the larger Dash- 8 aircraft.
RECOMMENDATION: Yuma should work with its incumbent carriers to increase its
frequency of daily service to both Los Angeles and Phoenix. In addition, Yuma should work
with its carriers to obtain service on larger aircraft to both of its existing hubs.
12. FINDINGS AND CONCLUSIONS
Results of the Arizona Air Service study identified several opportunities for attracting improved
scheduled commercial airline service at some of the study airports in the near future. The study also,
however, concluded that some study airports could be at risk of losing their existing airline service
and that there is only a limited probability of initiating and supporting commercial airline service
at additional airports in the State.
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There are several factors which have the propensity to impact both existing and improved
commercial airline service at most study airports. All study airports will continue to experience
passenger erosion. For all study airports, the existing passenger erosion rate is estimated at 72
percent, however, if improved service can be attracted, the rate of passenger erosion could in theory
be reduced to 50 percent. Experience has shown that large airports typically have more notable
service improvements, making it difficult for smaller and more rural airports to effectively cut their
passenger erosion rates. It is important to note that all the identified improvements in scheduled
commercial airline service in the Arizona Air Service Study are predicated upon each airport
capturing higher demand levels. If resident and visitor- related air travelers continue to use the
highway to drive to more distant airports for commercial airline travel, service improvements
identified by the route analysis are not feasible. A statewide program to educate and encourage air
travelers to use existing airline service at study airports is considered vital to the success of potential
air service improvements identified in this study.
Scheduled commercial airline service to Kingman, Page, and Prescott is currently federally
subsidized through the EAS program. Continued or new airline service to these communities, as
well as to other study airports, could be contingent upon the continuance of the federal EAS program
or upon the identification of similar local funding sources. Passenger volumes at several of the study
airports have been and will continue to be able to support profitable self- sustaining service on 19-
passenger or smaller aircraft. Within the airline industry as a whole, however, there is general
movement away from the 19- seat aircraft. This trend may jeopardize continued or new service to
several study airports.
Similar to many communities in western states, scheduled commercial airline service to the Arizona
communities included in this study is limited, to some extent, by the fact that airports are beyond
the effective stage length of turboprop aircraft and that passenger volumes are often too low to make
the airports viable candidates for service by new generation turboprop or jet aircraft that are being
acquired by the regional/ commuter carriers. Circumstances within Arizona may prompt some
communities to band together to support future commercial airline service. The example set by
Show Low, in terms of a community acquiring its own aircraft to ensure service, may well serve as
a future model for other Arizona communities.
Initiatives to sustain and improve commercial airline service can only be successful when they are
formulated and supported on the local level. Given the competitive nature of many of the airline
markets within Arizona, the Department of Transportation is not in a position to support or promote
airline service at one airport over another. Further, financial resources do not exist on the State level
to fully and equally provide operating subsidies to all communities within the State that may require
this type of assistance to maintain or improve airline service. Airport specific opportunities for
improving commercial airline service identified in this study must be implemented from the bottom
up, not the top down. While the Arizona Department of Transportation can continue to function as
a technical resource and a source of funds for physical facilities that may be required to support
commercial airline service, communities that seek to implement study recommendations must gather
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strong local support and possibly financial commitment if commercial airline service is truly a
transportation and economic priority.
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Arizona Rural Air Service Study August 1999
CHAPTER ONE
INDUSTRY TRENDS AND REVIEW
In 1978, the Federal government deregulated the commercial airline industry within the U. S. Since
this event, many communities throughout the country have experienced notable changes in their
commercial airline service. As the number of airlines providing service has decreased and the
industry has experienced further consolidation of its remaining carriers, many smaller commercial
service markets have witnessed declining levels of service. Scheduled commercial airline service
is important to communities throughout Arizona. Commercial airline service is important to Arizona
not just because it provides Arizona residents and visitors with safe and efficient transportation, but
also because commercial airline service is an essential underpinning to Arizona's economy.
Recognizing the importance of commercial airline service to the State, the Aeronautics Division of
the Arizona Department of Transportation undertook this study to help smaller and rural
communities throughout Arizona to gain a better perspective of their air service needs and
opportunities. The study contains information that is essential to understanding what is happening
in the airline industry, and it provides insight on how these trends have impacted air service at the
airports being examined in this study. Through surveys, meetings, and other diagnostic efforts,
information on each airport and its associated service area is also detailed. Results of this study's
diagnostics efforts are used to estimated each study airport's ability to attract and increased level of
boarding or enplaning passengers, and these estimates of demand are in turn used to analyze each
airport's ability to support improved or new commercial airline service. Results of this study can
be used by the Aeronautics Division and individual communities throughout Arizona to develop and
implement appropriate action plans related to improving commercial airline service.
While the international airports serving both Tucson and Phoenix have significant levels of
scheduled commercial airline service, the focus of this analysis was on smaller communities in
Arizona that now have commercial airline service as well as a selected number of other communities
that may have the potential to support commercial airline service. Airports serving Bullhead
City/ Laughlin, Flagstaff, Grand Canyon, Kingman, Lake Havasu City, Page, Prescott, Safford,
Sedona, Show Low, Sierra Vista, Winslow- Holbrook, and Yuma were the focus of this analysis.
Arizona's statewide air service study is documented in this as well as seven additional chapters
which comprise the study's technical report.
While each state has its own individual air service environment, Arizona's population distributions
and concentrations, its geography, and its heavy dependence on tourism all combine to make
Arizona's air service environment unique. With the vast majority of the State's enplaning
passengers are using either Tucson or Phoenix, the State's smaller and rural communities are faced
with challenges not experienced in other states. As a result of its unique air service environment,
national trends in the aviation industry may have less of a propensity to influence near term air
service in Arizona. The following sections provide a discussion of trends that are anticipated in the
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aviation industry; while this discussion is divided between major/ national and regional/ commuter
airlines, because this study is focused primarily on small and rural communities in Arizona, the
trends in the regional/ commuter industry have the most direct applicability to the markets being
analyzed.
The purpose of this chapter is to provide an overview of the commercial airline industry, relate these
trends to existing conditions in Arizona, and review previous studies that have been conducted to
address Arizona air service issues.
1. AIRLINE INDUSTRY TRENDS
In preparing a comprehensive air service analysis for the smaller commercial service airports in
Arizona, it is important to have a general understanding of recent and anticipated trends in the
aviation industry as a whole. When these trends are considered, it is important to review factors that
have and could impact the commercial airline service in Arizona. Some trends will undoubtedly
have a more profound impact on Arizona than others; and, in fact, it is possible that some trends that
are anticipated and discussed in this chapter may have no pronounced impact on the State's
commercial aviation environment. For this discussion, the trends in the commercial airline industry
are segregated between those for the major/ national carriers and those that are anticipated for the
regional/ commuter airline industry.
A. Major/ National Air Carrier Trends
The Airline Deregulation Act of 1978 changed the face of commercial passenger air service
upon its implementation. Prior to Deregulation, the Civil Aeronautics Board ( CAB) awarded
routes to air carriers and established the fares which these airlines could charge. In order to
ensure that airlines would not suffer financial losses, the CAB balanced among the carriers
the award of profitable, less profitable, and unprofitable routes. Airline routes, which were
largely point- to- point, were often times granted with the condition that the carrier make
stops at one or more under- served airports, thus ensuring air service to smaller communities.
Hence, prior to Deregulation, many smaller communities that are now served exclusively by
regional/ commuter carriers, or that may have lost service altogether, were served by large
commercial jet aircraft.
Once the CAB was dissolved, airlines were no longer ensured financial stability, and the
carriers were free to serve the city pairs of their choice. With the advent of Deregulation, the
airlines undertook a near- universal adoption of the hub- and- spoke route structure. Hub- and-spoke
systems were thought to be better than the linear route systems that were in place
before Deregulation. Airlines utilizing the hub- and- spoke system transport passengers from
smaller " spoke" airports to larger " hub" airports, after which passengers are " sorted" and
board flights to their final destination. This approach increased load factors and increased
airline revenues.
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Once the hub- and- spoke system became the dominant route structure, airlines began serving
smaller markets with smaller aircraft. On unprofitable routes, many airlines left markets
entirely, thus allowing the void to be filled by the growing number of regional and commuter
carriers entering the industry. At many connecting hubs, airlines increased their share of
passengers to the point that they became the dominant carrier at the airport; these airports
became know as " fortress" hubs. Until the mid- 1980s, the number of airline connecting hubs
in the United States increased. However, due to various market forces, airline operating
strategies during the 1990s changed. Airline connecting hubs such as Continental's in
Denver and American's hub in Nashville were closed as the airlines attempted to reorganize
and streamline their activities to achieve higher profits.
Prior to Deregulation, routes were often times awarded to ailing carriers in order to keep
them afloat financially. Once this safety valve ceased, a rash of mergers, acquisitions, and
bankruptcies occurred which served to consolidate the airline industry. This included the
acquisition of Western by Delta, Republic by Northwest, Air Cal by American, Ozark by
TWA, Frontier and People Express by Continental, Piedmont and PSA by US Airways, and
Morris Air by Southwest. The net result of the hub- and- spoke system, along with airline
merger/ acquisitions, has been fewer commercial airline opportunities for all airports.
Most recently, domestic carriers in the U. S. have shown tendencies toward further
consolidation as Continental and Northwest have forged a strategic alliance and similar
alliances have been discussed by Delta and United and American and U. S. Airways. While
the final effects of such alliances have yet to be determined and experienced, further
consolidations in the airline industry could portend fewer opportunities for new air service
for all air travelers with the U. S., including those using Arizona's commercial airports.
This further consolidation in the airline industry also decreases the likelihood that additional
airline connecting hubs will be established by the nation's domestic carriers. While the hub
and spoke concept works basically the same for states that are in the East versus those that
are in the West, there are some essential differences, and these differences impact Arizona's
current air service patterns as well as its air service opportunities. The vast majority of the
major connecting hub complexes are located east of or at least in close proximity to the
Mississippi River. This gives communities in the East, of a size similar to those in Arizona
that are being analyzed in this study, more opportunities for obtaining service through a
number of connecting hubs operated by different airlines. For example, because of
geographic proximity, it would not be uncommon for a market in either West Virginia or
Virginia to have connecting service through Cincinnati and/ or Atlanta ( Delta); Charlotte
and/ or Pittsburgh ( US Airways); and Washington Dulles ( United).
For communities in states located in the West, the number of connecting hub opportunities
are more limited. While Sky Harbor International serves connecting traffic, the percentage
of connecting passengers served at this airport versus those that fall into the
origination/ destination ( O& D) category is lower than the percentage found at more
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traditional connecting hubs. At the larger connecting hubs, between 65 and 75 percent of all
enplaning passengers may be connections, and the airline serving the hub may account for
upward of 90 percent of ali the market's available seats. While the airlines serving both
Phoenix and Las Vegas do serve a notable number of connecting passengers, they are not as
hub- dominant as airports such as Cincinnati, Minneapolis, and Charlotte, because the activity
at both airports is distributed among a greater number of airlines.
The closest true connecting hubs to the Arizona markets being analyzed in this study are
those located at Salt Lake City and Denver. Hubs located in Dallas and Houston are beyond
the range of turboprop aircraft from the Arizona markets, but could be reached by new
regional jets. These aircraft will be discussed later in this section. Los Angeles also serves
some connecting traffic, especially for international destinations and markets which lie
along the West Coast. The hub- and- spoke system operated by most carriers is not expected
to change. Hence, this service pattern will continue to influence the near term air service
opportunities for communities throughout Arizona. Since much of Arizona's current airline
service is tied to service provided via connecting hub airports, in particular Phoenix, and the
establishment of new hubs is not envisioned, it is likely that Arizona's commercial air
service patterns will not undergo radical changes in the near term.
Until recently, seats per departure for the major/ national carriers remained fairly stable. The
FAA forecasts seats per departure to increase slightly each year. This is due largely to the
phase- out of aircraft which do not meet Stage III noise standards. Between January 1, 1995,
and January 1, 2000, Stage II aircraft must either be modified to meet Stage III noise
standards or be retired. Waivers may be granted to airlines which have at least 85 percent
compliance by July I, 1999, and can demonstrate firm orders for modification or replacement
of their remaining Stage II aircraft. Such waivers, however, expire on December 31,2003.
Much of the Stage II aircraft fleet consists of narrow- body aircraft, including:
Manufacturer Aircraft Type Typical Seating Capacity
Boeing 727- 100/ 200 112/ 145
737- 100/ 200 90/ 110
McDonnell Douglas DC- 9- 10/ 30/ 40/ 50 73/ 100/ 104/ 122
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Many of the Stage III aircraft replacing those in Stage II have larger seating capacities. These
Stage III aircraft include:
Manufacturer AircraffType Typical Seating Capacity
Boeing 737- 300~ 00/ 500/ 800 1311139/ 1081164
757 186
McDonnell Douglas MD- 88/ 90 140/ 149
Airbus A320 149
Fokker F100 98
The Air Transport Association ( ATA) reports that its members at the end of 1997 had nearly
80 percent Stage III aircraft in terms of their operating fleets. U. S. airlines that are members
of ATA have commitments ( orders or options) to purchase some 2,432 new aircraft. These
aircraft are expected to be delivered at a rate of 225 to 275 new aircraft over the next five
years. Several new wide- body aircraft with larger seating capacities have been introduced
into the U. S. fleet. These include the Boeing 777, McDonnell Douglas MD- 11, and the
Airbus A330 and A340. The FAA projects average seats per aircraft on domestic routes to
increase from 142.6 in 1997 to 165.2 by 2008)
It is important to note that while larger aircraft are on the drawing boards or in production
for several aircraft manufacturers, it is anticipated that many of these aircraft will see no or
only limited domestic use and that they will be used to serve only the high volume markets.
This industry trend is not anticipated to have any impact on scheduled commercial airline
service in Arizona.
According to the FAA, domestic passenger enplanements are expected to increase from over
540 million in 1997 to 821.5 million by 2009. When international enplanements are
considered, this figure is projected to exceed 924 million enplanements. According to data
published by ATA, enplaned passengers carried by major/ national airlines within the U. S.
grew 2.9 percent between 1996 and 1997, increasing from 530.7 million to 546.2 million.
During this same period, enplaned passengers carried by U. S. airlines to international
destinations grew by 4.4 percent, increasing from 50.5 million to 52.7 million. At the same
time, according to ATA, the number of actual departures by the major/ national airlines
operating in the U. S. declined by almost one percent. The increase in enplanements
combined with the decrease in departures lead to the average load factor for all domestic
airlines reaching an all time high in 1997. ATA data indicates that the average load factor
for the major/ national carriers has climbed steadily between 1987 and 1997, increasing from
62.3 percent to a reported 70.4 percent in 1997. While traffic has grown steadily, airline
Federal Aviation Administration, FAA Aviation Forecasts- FY 1998- 2009, March 1998.
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passenger yields, the amount collected by the airlines to fly one passenger one mile,
increased by less than 1.0 percent to 13.1 cents. This increase was less than the 2.3 percent
increase reported for the Consumer Price Index for 1997.
In the deregulated airline environment, any state's commercial airline service is influenced
first and foremost by its level of demand for such service. The demand for commercial
airline service can be and is influenced by many factors. These factors include the state's
total population and the demographic composition of that population; total employment and
the type of employment that is predominate in the state; the level of disposable income that
is available to residents in the state; and other factors such as tourism that bring visitors to
the state. While there is an inherent level of demand for commercial airline service in any
state and in each of its communities, how and where that demand for commercial airline
travel is actually served depends on a number of factors. In particular, competition from
airports both within and beyond Arizona that have more significant levels of commercial
airline service or offer more competitive fares can cause Arizona airline travelers to leave
their local market area and depart from a more distant commercial service airport either
within or beyond the State.
In today's air service environment, it is not uncommon to find passengers associated with
one market driving to a more distant airport to initiate their commercial airline travel.
Sometimes this passenger diversion occurs among airports in the same state and sometimes
the diversion is to airports beyond the state in question. In association with this study,
surveys were undertaken to identify and measure current passenger diversion for each of the
Arizona markets being studied. This type of information allows each community to have an
understanding of its unconstrained demand for commercial airline service, as well as an
understanding of its competition and the factors that contribute to passenger diversion from
each individual market in Arizona. While many states experience an outflow of passengers
from their smaller markets to airports which are beyond the state, a significant percentage
of the passenger diversion from the smaller markets in Arizona is to larger airports within
the State. Las Vegas is the only out- of- State airport in proximity to markets in Arizona that
is within a reasonable driving time. Actual results of the survey efforts to measure and
quantify current passenger diversion in each of the study markets is documented in a separate
section of this report.
B. Regional/ Commuter Carrier Trends
While a great deal of consolidation has occurred among the major/ national carriers, another
segment, the regional/ commuter carriers, has flourished. As previously mentioned, after
Deregulation, major/ national carriers were replaced by regional/ commuter carriers in many
markets.
Once the hub- and- spoke system was fully established, major airlines began depending on
regional/ commuter carriers to provide traffic feed. At first, this was in the form of interline
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agreements whereby the major/ national and regional/ commuter carriers could easily accept
tickets from one another. Eventually, these arrangements evolved into code sharing
agreements, offering passengers single ticketing, short connecting times, and close gate
proximity between flights. At first, regional/ commuter airlines were independently owned.
However, with the establishment of connecting hub complexes, carriers began to realize the
benefits of such alliances. Thus, a growing trend in the industry has been for major/ national
airlines to acquire an equity interest in their code- sharing partners, sometimes even
purchasing them outright.
According to the FAA, in recent years, the growth of the regional/ commuter market has
outpaced that of the major airlines. This trend is projected to continue, as major airlines
transfer many short- haul routes to their regional partners. In conjunction with this trend,
regional/ commuter aircraft manufacturers are continuing to introduce larger, more
technically advanced aircraft into the marketplace. Many of these aircraft offer amenities
found on larger jet aircraft, including stand- up cabins, food and beverage service, and
lavatories. One such aircraft, the Canadair Regional Jet ( CRJ), is a 50 passenger jet aircraft.
Based on the prevalence of larger commuter aircraft, such as the CRJ, the national average
for the number of seats per departure for regional/ commuter carriers is expected to increase
during the planning period.
It is anticipated that the regional airline component of the airline industry will continue to
be one of the most dynamic. The well- established process in which the major airlines have
favored longer- range routes and denser markets and have contracted with regional carriers
for their short haul operations is anticipated to continue. The impact of regional jets and
their continued acquisition by the regional carriers is also anticipated to continue to change
the airline industry as the competition between carriers operating these smaller jets becomes
more intense.
According to FAA forecasts, between 1997 and 2009, passenger enplanements for
regional/ commuter carriers are expected to increase from 61.9 million to 117.0 million;
average passenger trip length is expected to increase from 227.3 to 287.0 miles; seats per
departure are expected to increase from 31.2 to 40.3; and the average load factor is expected
to increase from 53.1 percent to 58.2 percent. Since the smaller regional jets are capable of
flying stage lengths well in excess of 1,000 nautical miles, this aircraft will provide
additional point- to- point and/ or connecting air service opportunities that have not previously
been available.
Airlines that fall into the regional/ commuter classification carry about 11 percent of the
nation's commercial airline passengers, arid this percentage is growing. Of the 782 airports
in the U. S. that have scheduled commercial airline service, according to estimates from the
Regional Airline Association ( RAA), over 70 percent of these airports depend exclusively
on service provided by regional/ commuter carriers. There is no doubt that the success of the
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regional/ commuter segment of the airline industry is largely related to their affiliation or
code- sharing with their major/ national partners. In fact, in 1996 ( the most recent year for
which data is available from RAA), over 95 percent of all passengers who traveled on a
regional/ commuter airline traveled on one that code shares with a major/ national partner.
While the number of passengers flying on regional/ commuter carriers has grown from 28.4
million in 1986 to 62 million in 1996, the number of regional/ commuter aircraft in service
increased from only 1,806 to 2,127 in this same period. This attests to the industry's
propensity to use aircraft with larger seating capacities to serve its customers. Increasing
seat size among carriers in the regional/ commuter category is a trend that will undoubtedly
impact commercial airports in the coming years. While aircraft that fall into the 19- seat
category continue to be the most prevalent type of regional/ commuter aircraft in operation,
this, according to RAA forecasts, is expected to change. According to RAA there are over
560 aircraft in the 19- seat category in operation today, and they expect this figure to decline
to fewer than 175 aircraft by 2007.
RAA sees the regional/ commuter airline industry moving away from turboprop aircraft and
into the jet age. RAA projects that over 75 percent of the regional/ commuter aircraft that are
ordered between now and 2007 will fall into the jet category. Regional/ commuter jet aircraft
are expected to fall into three categories. One is the regional jet, such as the Canadair
Regional Jet ( CRJ), seating 50 passengers. The other two categories, according to RAA, will
be the Large Regional Jet ( LRY) which will seat 70 or more passengers and the Micro Jet
( MJ) which will seat between 33 to 37 passengers. If all regional jets that are in the planning
stages come on- line by 2007, over half of the regional/ commuter aircraft, according to RAA,
will be jets. This will enable the average stage length flown by regional/ commuters to
increase from 230 statute miles to over 400 statute miles by 2007. This estimate for average
stage length by RAA exceeds that of the FAA, emphasizing RAA's belief that regional jets
will dominate the fleet by 2007.
RAA anticipates that as smaller aircraft are retired, the regional/ commuter airline role will
shift from serving smaller communities to primarily one of feeding the mega- carrier systems
at the hub airports. RAA indicates that while they anticipate that regional/ commuter
operations will expand, the number of points ( cities) served by regional/ commuter airlines
may actually decrease. With the switch to jet aircraft by many of the larger/ regional carriers,
there will be, according to RAA, a surplus of 19 to 30- seat aircraft available. Within the
industry, there is some debate as to exactly what will happen to these surplus aircraft. Some
envision that another tier of carriers will emerge to provide service to the smaller cities that
cannot support even the smallest of the regional jets. While others, including RAA in their
annual report, indicate that the emergence of a new class of carriers does not appear likely.
This conclusion is based largely on the assumption that mega- carriers will be unwilling to
forge alliances with carriers who fly small aircraft once the trend to the regional jets has fully
manifested itself. This trend has the potential to impact commercial service points in
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Arizona. There are several carriers discussing potential start- up commercial airline service
to some of Arizona's smaller markets; most of these carriers are proposing to use 19- seat or
smaller aircraft. Carriers such as Sunrise Airlines who is already operating at Show Low and
Page will most likely being flying as non- code sharing airlines. The fact that these start- up
carriers who will be operating smaller aircraft will not have code sharing arrangements with
major airlines has the potential to impact passenger travel in the markets that they serve.
These potential impacts will be discussed in the sensitivity analysis which will be presented
in Chapter 8 of this report.
C. Impact of Trends on Arizona
This section provides an overview of some of the specific trends in the aviation industry that
may have a pronounced impact on commercial airline service in Arizona in the near term.
As noted, one of the most prevalent trends in the commercial airline industry today relates
to the diversion of passengers from smaller markets to larger markets which offer levels of
commercial airline service which are perceived as being superior. One of the primary
reasons cited for passenger diversion by travelers throughout the U. S. is airline fares. While
market specific diversion rates for the communities being analyzed in this study are
discussed elsewhere in this report, a notable portion of the passenger diversion from
Arizona's small and rural markets occurs to other larger airports within the State ( i. e.,
Phoenix and Tucson airports).
Data from the U. S. Department of Transportation ( U. S. DOT) for the calendar year ending
in 1997 sheds light on one of the primary factors responsible for intrastate passenger
diversion. Data from the U. S. DOT groups airports throughout the U. S. by three categories:
large, medium, and small hub. For each category of airport, U. S. DOT also publishes
average fare data by stage length of the trip. While Sky Harbor International Airport falls
into the large hub category, Tucson International falls into the medium hub category. For
almost all reporting categories, fares at both Phoenix and Tucson were below the national
average for all stage lengths. As an example, for the large hub category, the national average
one- way fare for stage lengths in the 250 to 499 mile range is $ 106; the average one- way fare
for Phoenix for this stage length is $ 56. For stage lengths between 1,500 and 1,999 miles,
the average fare nationally is $ 193, while the average fare at Phoenix is $ 169. One of the
reasons why the average fare at Phoenix is consistently below the national average relates
to the percentage of the market that is made up of flights by low fare carriers. Nationally,
for the large hub airports, an estimated 12 percent of their flights are flown by carriers that
fall into the low fare category; at Phoenix, the percentage of the market flown by low fare
carriers approaches 33 percent. While the percentage of flights by low fare carriers at Tucson
International Airport is below the national average for medium hub airports, average fares
by stage length are still below the national average for most categories. For example, while
the average fare for the 250 to the 499 mile stage length nationally is $ 83, the average fare
from Tucson International for this stage length is $ 53. In the 1,500 to 1,999 mile stage
length, the average fare from Tucson, $ 207, is above the national average for all medium
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hub airports; the average fare nationally is $ 174. Since the primary reported factor for
causing diversion from smaller to larger markets across the U. S. is fares, it is not surprising
that smaller and rural markets in Arizona experience a significant amount of passenger
diversion to the State's larger commercial service airports.
As noted, growth in the regional/ commuter segment of the commercial airline industry is
expected to outpace those carriers in the major/ national category. The recent signing of a
long- term code- sharing agreement between Mesa Airlines and America West has the
potential to positively influence commercial airline activity in the State. Under the new
agreement, Mesa will provide feeder service to America West under the America West
Express banner. The new agreement also calls for Mesa to acquire 11 additional 37-
passenger and 10 additional Canadair Regional Jets ( CRJs) by 1999.
Mesa has indicated that its CRJs and its larger 37- seat Dash 8 turboprop aircraft will replace
some of its 19- seat Beech 1900 aircraft, but they have not officially announced a decision to
completely remove the Beech 1900 from their fleet. The Dash 8 is currently being used in
Flagstaff and Yuma, while the Beech 1900 is being used in the remaining Arizona markets
served by Mesa ( Bullhead City, Lake Havasu City, Sierra Vista, Prescott, and Kingman). As
indicated in the discussion of national trends in the regional/ commuter airline industry, RAA
anticipates a drastic curtailment of the use of turboprop aircraft on an industry wide basis.
With its recently signed agreement with America West, it is likely that Mesa Airlines will
be a key player in providing service to Arizona's small and rural communities in the
foreseeable future. Mesa has indicated that the FAA's imposition of Part 121 rules on
regional carriers has made it harder for regional carriers to make a profit operating smaller
aircraft such as the 1900. Nevertheless, according to Mesa officials, they plan to keep
operating turboprop aircraft in niche markets; many of Arizona's small and rural markets fall
into this category.
Growth within the airline industry, especially the regional/ commuter segment, does present
possible air service opportunities for Arizona markets. For example, National Airlines ( a
new entrant carrier that is seeking to secure adequate financial backing before filing for DOT
certification) plans to begin serving many major markets from Las Vegas using B- 757
aircraft. If the airline is successful, a Connecticut- based firm has already announced plans
to form a regional carrier to provide feeder service to the new entrant at Las Vegas. The
markets in the West have seen the preponderance of the start- up carriers that have initiated
service in recent years. The continuance of new entrant carriers and the possible start up of
regionals to feed the new entrants presents possible opportunities for Arizona's small and
rural communities for gaining new commercial airline service. Perhaps the biggest drawback
to such new service, however, is the fact that new entrant regionals in the West ( i. e., Aspen
Mountain Air, Mountain Air Express, and Air 21) have showed only limited staying power.
When carriers enter and then quickly exit a market, travelers become skeptical about the
reliability of other similar carriers when they enter the market. Reliability of service is highly
rated by all consumers when they make their selection for a departure airport.
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Air service in Arizona's small and rural markets is also influenced by the Essential Air
Service ( EAS) program. Arizona is one 17 states that has multiple cities whose commercial
air service is subsidized by the EAS program. The EAS program is funded by the Airport
and Airways Trust Fund. The program was initiated to help stabilize service in small
communities throughout the U. S. that would have otherwise lost service following
deregulation of the airline industry. Service to Kingman, Prescott, and Page is subsidized
through the EAS program. It is important to note, that on a per passenger basis, the EAS
subsidies in Arizona are among the lowest in the nation. Scenic Airlines is the current
service provider to Page; Sky West previously provided service in the market. A Utah- based
cartier, Sky West recently announced that it will sell the assets of air- tour based specialist
Scenic Airlines to Las Vegas- based carrier Eagle Canyon Airlines. Eagle Canyon has an
option to acquire two Beech 1900s that are used by Scenic to fly EAS routes to Page and Ely,
Nevada. Sky West has indicated that it does intend to also sell the Page tour operation with
two Twin Otter aircraft and several single- engine planes.
While the Federal government has implemented reductions in the EAS program and has
discussed its elimination, the program continues to survive. As air service options are
reviewed as part of this study, it will be important to determine the ability of communities
now receiving operating subsidies to support service which is economically viable and thus
independent of any type of operating subsidies.
2. PREVIOUS AIR SERVICE STUDIES
In addition to reviewing how airline industry trends are anticipated to affect commercial airline
service within Arizona, previous air service studies conducted for Arizona airports were reviewed.
Although these studies do not dictate the analysis conducted in this study, they did provide
background information for consideration in the analysis for Arizona's commercial air service needs.
These studies are discussed in the following sections.
A. Flagstaff Marketing Package
In February 1998, The Boyd Group/ ASRC conducted an analysis on the revenue opportunity
for Sky West/ Delta Connection service on a route from Flagstaff to Salt Lake City. As the
regional airport for northern Arizona, Flagstaff, according to the Boyd Airport, represented
a significant opportunity for Sky West/ Delta Connection to access an economically growing
area within substantial tourism. After reviewing the traffic and revenue potential for
Flagstaff, The Boyd Group/ ASRC analysis indicated that service utilizing Canadair Regional
Jets with three round trips daily to Salt Lake City could generate over 76,000 annual
passengers. Based on an average yield of $ 0.23 per mile, service would generate nearly $ 7
million in net new revenues for the Sky West/ Delta Connection system.
Results of the studies and inquiries done by The Boyd Group showed that Northern Arizona
University and Ralston Purina are major economic forces in the community that have a
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strong potential to generate more outbound traffic. Northern Arizona University generates
approximately 2,600 round trips per year. Due to Flagstaffs history of unreliable
commercial air service, these users send large portion of their passenger traffic to Phoenix
for airline departures. It was estimated as part of the Boyd study that up to 80 percent of this
passenger leakage to Phoenix could be stopped by providing viable service from Flagstaff.
In 1997, Ralston Purina generated 170 round trips. It was noted that most of their passengers
traveling to Phoenix could be recaptured with reliable jet service at FlagstaffPulliam Airport.
Local Flagstaff travel agency surveys conducted as part of the Boyd analysis indicated that
only 25 percent of their clients were booking flights from Flagstaff, while the vast majority
of the other 75 percent use Phoenix. The strongest factor influencing the traveler's decision
to travel from Phoenix was price, with the second and third factors being flight reliability and
reduced flight frequency at Flagstaff. Business travel accounted for 35 percent of all travel,
while leisure travel account for the remaining 65 percent. A large number of the agents
expressed support for new regional jet service to another hub, particularly Salt Lake City or
Denver.
Flagstaff's enplanement levels rose 20 percent from 1995 to 1997 due to economic growth.
This indicates that in spite of the previous service problems with America West Express, the
economic growth of the area could support additional air service options. The Boyd Group
estimated that Sky West jet service to a Salt Lake City hub would tap into this growth and
result in more than 38,000 annual enplanements.
At the time of the Boyd analysis, current traffic flows indicated that over 62 percent of
Flagstaff annual traffic was to the Southwest or West. It appeared that service to the East
would be greatly improved and traffic patterns would be distributed more evenly throughout
the U. S. with Sky West/ Delta Connection to the Salt Lake City hub. The amount of traffic
leaking from Flagstaff was analyzed to determine the number of passengers that could be
captured by Sky West/ Delta Connection. It was estimated that approximately 250,000
annual passengers are being lost to Phoenix. Approximately 50 percent of this leakage was
determined to be fare- driven, therefore, considered unrecoverable. The remaining 125,000
passengers were redistributed among the top Flagstaff markets and assessments were made
about the capture of traffic that could be obtained from each top market. This analysis
identified over 61,000 new passengers annually that could be carried by Sky West/ Delta
Connection, along with approximately 15,000 annual passengers using America West
Express to Phoenix who would be attracted by this new jet service. It was determined that
Sky West/ Delta Connection could recapture over 49 percent of the current passenger leakage
that is not fare- driven.
The Boyd Group projected revenue potential by assuming an annual traffic level of 76,439
passengers at a yield of $ 0.23 per seat mile with a stage length from Flagstaff to Salt Lake
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City of 390 miles. This would yield $ 6,856,581 in total annual revenue. The Boyd Group's
analyses indicated a load factor in excess of 74 percent could be realized.
The analysis concluded that the Flagstaff/ Northem Arizona Region is part of a growing
economic area that is a viable market for Sky West/ Delta Connection. The City of Flagstaff
is highly supportive of a new carrier and is prepared to assist Sky West/ Delta Connection in
marketing new service.
In July 1998, The Boyd Group also prepared passenger and revenue forecasts for the Los
Angeles/ Flagstaff market. Forecasts indicated that the Flagstaff market is a great
opportunity for Sky West/ United Airlines with 44,920 passengers annually, $ 8,926,363 in
revenue, and a load factor of 68 percent. Forecasts were developed on the following
assumptions: a 30- seat Embraer EMB- 120 Brasilia aircraft, three daily roundtrip flights,
United code- share only, reasonable levels of connectivity with existing United Airlines
flights at Los Angeles, and no measurable load restrictions. Results of this forecast
suggested potential demand does exist for this market and that there is a sufficient population
base for Sky West to establish air service from Los Angeles to Flagstaff. This service would
be as an option to the previously discussed Salt Lake service.
. . . . . . . . B~. Commuter Air Se~' ice Feasibility Study ................................................................
In 1981, the Commuter Air Service Market Feasibility Study observed that " the high costs
of fuel, equipment, and labor, and the subsequent high fare structure, has resulted in a
cutback in the number and frequency of flights in the smaller markets. This has led to lower
passenger demand. With the departure of regional and trunk carriers, replacement service
has come via the commuter air carriers."
This study forecast commuter service demand and identified 14 routes that had the ability
to break even by 1986. Of these 14 proposed routes in the 1981 study, only four had
comrnercial service in 1987. The remaining 10 were not being served due to lack of demand
and lack of airline interest in serving these routes.
In 1988, TRA Airport Consulting prepared a Commuter Air Service Feasibility Study to
provide the State of Arizona with a computer model which could be used to assess the
market potential for commuter air service between two cities and determine the costs
associated with specific routes. At that time, commuter service was provided from Phoenix
and Tucson to Flagstaff, Lake Havasu, and Yuma. With the exception of the Grand Canyon,
this left the northeast and east portion of the State without service. Five cities were eligible
for funding from the Essential Air Service Program, though only four, Page, Kingman,
Prescott, and Winslow, actually received subsidies at the time of the 1988 study. The FAA
viewed Flagstaff, the fifth city, as having sufficient ability to support unsubsidized service.
The computer software developed as a part of this study was used to assist planners in
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evaluating whether the same routes identified in 1981 could be implemented successfully in
1988, or if they remained unprofitable based on certain parameters.
The existing airport system was analyzed and it was determined that there were 256 airports
in Arizona, of which 81 are public use and 175 private use. These airports were classified
by the type of air service they provided to the community and the type of aircraft they could
accommodate. The status of existing routes was presented along with FAA summaries of
the EAS impact to each city. An air travel survey helped to determine business travel
patterns, top destinations, and important service factors such as aircraft model, ticket price,
and schedule. These surveys were distributed to businesses in 26 Arizona cities via
chambers of commerce. These 26 specific cities were surveyed because they had been
identified in the 1981 study as candidates for commuter air service. Survey results
concluded that Los Angeles was the primary out- of- state destination for 14 of the 17 Arizona
cities that returned surveys. Of the 26 Arizona cities examined, Phoenix was the primary
destination for nine ( 9) of the 17 cities. The primary factors, according to the smweys that
characterized good service were schedule convenience, followed by ticket price, and aircraft
type. Based on the results of the survey and other information, it was concluded that the East
Central and the Cliflon- Morenci/ Safford- Thatcher areas, two populated regions of Arizona,
were not being served by commuter aircraft.
....... The ias;( po- rtion 0- f the study focused on ti~ e fin~ ciai- fe- asibiiity of allsPice for spec{ fic
routes. A spreadsheet program that measured the costs of various commuter aircraft against
the costs of driving the equivalent route in an automobile was developed. The purpose of
this computer program was to determine the minimum passenger volume necessary for the
smallest commuter aircraft and the most appropriate aircraft to serve a route for a given level
of passenger demand. Input data to the program included personal driving costs and aircraft
block hour costs. The program first determined cost per block hour time, then annualized
it. Annualized aircraft costs were then compared with equivalent annualized driving cost.
This resulted in a series of appropriate commuter aircraft that could profitably serve a route,
given the chosen parameters.
C. Four Corners Commuter Air Service Study
In an effort to improve the quality of the Four Comers Regional air service, the Region's
Commission funded the Commuter Air Service Study that was conducted between June 1978
and June 1979. It had been recognized that improved air service in smaller communities was
needed. The study was conducted by Landrum and Brown and monitored and assisted by
the Utah Department of Transportation.
The Four Comers Region is comprised of communities in Arizona, Colorado, Nevada, New
Mexico, and Utah. This region, at the time of this prior study, was noted to be the fastest
growing area in the United States. As the economy and population of many small
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Arizona Rural Air Service Study August 1999
communities in the region grew, so did the need for reliable commuter service. Inconvenient
schedules, poor on- time performance, and financial losses contributed to unreliable service
within the area. The problem the study addressed was how the system could be improved
to sufficiently handle the present and future commuter air service demand. The study
contained four phases, including an Inventory, Demand Assessment, Presentation, and
Service Alternative phase.
The main purpose of the Inventory stage was to collect economic, demographic, and aviation
data for use in other study phases. Information was collected from aircraft manufacturers,
state coordinators, federal agencies, and community representatives. Communities and
airports in the Region were visited, and officials discussed the aviation- related problems in
their communities. The economic and demographic characteristics of each community were
studied and documented as well.
The Demand Assessment Phase was essential to provide a clear understanding of the factors
impacting commuter air service demand and also aided in identifying solutions to aviation
problems. Enplanement demand in the Four Comers Region was found to be a function of
the areas's remoteness from a major air carrier airport; community income, population, and
economic base; and the popularity of the area as a tourist destination.
The Presentation and Improvement Phase examined the existing situation and future growth
projections. This enabled the study team to identify and analyze existing problem or
potential problem areas. This process involved discussions, presentations, and briefings with
airline, state, and local officials.
The Service Alternative Phase analyzed the economic benefits of air transportation and
examined the service prospects with and without governmental action. A detailed route
analysis was performed to determine the relative profitability of individual routes. Findings,
conclusions, and recommendations were discussed in the latter portion of the study. It was
determined that the overall commuter air service route development process in the Four
Comers Region had not been well coordinated. This resulted in an underdevelopment of the
region's air transportation system.
Based on the findings and conclusions, recommendations for improving the air service
quality in the region were developed. The first recommendation, labeled as the
Communications Improvement Plan, would improve the level of communications between
state, local, and airline officials. This would be made possible by each community
appointing a community air transport coordinator, who would assist appropriate state and
local officials in a determination of aviation facility needs. Airlines would institute an
effective market awareness/ public affairs program that would help educate community
leaders on the benefits associated with air, versus ground transportation, and they would
work with these leaders in the development of facility plans and public transportation
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Arizona Rural Air Service Study August 1999
requirements. The five states in the Four Comers Region would develop state aviation
organizations that would be responsive to state and federal regulatory issues and market
requirements.
The other recommendation, the Community Air Service Action ( CASA) Program, contained
three different elements. The first element included holding the Four Comers Regional
Commission responsible for the institution, overall administration, and evaluation of the
program. The second element was that the community would work through its air
transportation coordinator, who would be responsible for eliminating community- related
problems that hindered the development of air service in their respective community. The
third element consisted of the Four Comers Regional Commission selecting communities
and routes that had been proven profitable and beneficial, and using them as part of the air
service demonstration project.
These recommendations were aimed at eliminating many of the problems associated with the
introduction of air service; improving the communications network between state, local, and
airline officials; and developing a complete understanding of the route development process
in the Region. Implementation of the recommendations presented in this study were
expected to aid in the establishment of an efficient and high quality commuter air service
......... system in the Four Comer Region, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. SUMMARY
The industry trends and review of previous studies provide a backdrop for actual technical analyses
that will be conducted in subsequent elements of the study. Information from industry trends and
previous studies will be considered as markets being considered in this study are analyzed and
recommendations for improving commercial airline service are developed later in this study. It is
worth noting that while Flagstaff continues to work on implementing recommendations from its
recent air service study, in- state service opportunities identified in the State's prior commuter air
service study as well as recommendations contained in the Four Comers Air Service Study have
remained largely unimplemented.
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Arizona Rural Air Service Stud), August 1999
CHAPTER TWO
INVENTORY OF AIR SERVICE AREAS
With information established on national and Arizona- specific trends which have or could impact
scheduled air service in the State, an inventory of Arizona's current air service environment was
conducted. To provide an overview of Arizona's air service characteristics, facility data were
collected, historic and current air service characteristics were indexed, socioeconomic and
demographic data were reviewed, and meetings were held. This inventory provides a basis for
understanding Arizona's existing air service system and evaluating the system for potential
improvements. Inventory efforts are described in the following sections.
1. AIRPORT FACILITY DATA
Information about each of the airports was gathered from airport managers, the NOAA
AirpoWFacility Directory, and the Arizona State Aviation Needs Study ( SANS). Runway data,
including the length, width, and orientation, for all study airports is depicted in Table 2- 1. The
airports are classified by the FAA based on the approach speed and wingspan of the most demanding
aircraft that uses each airport on a regular basis. This classification was done to establish an Airport
Reference Code ( ARC) for each airport. Factors that are important to consider when evaluating an
airport's capacity and ability to accommodate additional or improved air service are noted in Table
2- I. These factors include: lighting, available approaches, NAVAIDs, annual service volume
( ASV), terminal space, number of passenger gates, number of automobile parking spaces, and ARFF
index.
2. SERVICE INDEXING
Information presented on the 13 airports that were the focus of the Arizona Air Service Study was
drawn from a number of different aviation industry sources. No single source provides the entire
picture of a community's air service history, but together, the information from multiple sources
provides a more comprehensive overview. Because each of the air service descriptions draw on the
same types of information, this introduction is intended to familiarize the reader with the strengths
and weaknesses of each of the data sources utilized to develop market histories.
The Official Airline Guide ( OAG) is one of the single most comp