Hello from bizjournals.com! Bill Hough (psa188@xxxxxxxx) thought you might like the following article from Business First: http://www.bizjournals.com/industries/travel/airlines_airports/2003/04/07/buffalo_story3.html Airline slump misses WNY Joe Iannarelli Business First ------------------------------------------------------------ As many major airlines continue to struggle with an industry-wide downturn, the airports they service are forced to work harder to remain viable. Two of Buffalo's busiest carriers, American Airlines and US Airways, have grappled with financial hardships that threatened the economic health of both airlines. American, Buffalo's eighth busiest carrier, avoided a Chapter 11 bankruptcy filing this week after settling labor disagreements and securing $1.8 billion in concessions from unions. US Airways completed all required transactions and conditions to its reorganization plan, allowing the company to meet its March 31 target for emergence from Chapter 11 protection. "In times of downturn, it's the small- to medium-sized airports that lose out the most," said Steven Lott, business editor of Aviation Daily, an industry publication. "That's where some services might be dropped." US Airways' future at Pittsburgh International Airport as its major hub is in question following the airline's emergence from bankruptcy protection. The airline will renegotiate its leases at the airport and its related facilities because it did not "assume their terms" as part of the airline's reorganization, company officials said. The story is different at the Buffalo Niagara International Airport. "Buffalo is somewhat of an exception," Lott said. "They have a great degree of low-cost carriers like Southwest and JetBlue. For the traveling public, that means great fares and service. That can drive out the bigger airlines like United and US Airways. They have high labor and operating costs. Add in stiff competition and it doesn't get any better. There is still a market for the larger airlines though. There are still travelers in Buffalo that need to fly internationally. Southwest and JetBlue don't provide that." Bankruptcy protection United Airlines, the world's second largest airline, filed for bankruptcy protection on Dec. 9, 2002. The airline averages 18,000 flights a day and recorded $1.7 billion in losses for the first three quarters of 2002. The airline accounted for 11 percent of the total flights at the Buffalo Niagara International Airport in February. United boardings totaled 13,283 that month. United reached a tentative, six-year agreement with the Air Line Pilots Association on March 27 that creates a new framework for its labor costs and productivity. United officials said the agreement was a "significant step forward" for the airline to compete more effectively. The agreement has yet to be ratified by United's pilots. The Buffalo airport's largest carrier, US Airways, filed for bankruptcy protection on Aug. 11, 2002 but continued to operate while it restructured its finances. US Airways accounted for 34 percent of the total flights at the airport in February. US Airways boardings totaled 33,545 that month. US Airways closed on financing this week that provided the carrier with $1.24 billion in liquidity, including a $240 million equity investment from Retirement Systems of Alabama Holdings LLC and a $1 billion loan. "Considering the current state of the airline industry with multiple bankruptcies pending, this will ultimately have a negative effect on the consumer in terms of pricing and schedule frequency," said Ron Luczak, director of marketing for The Travel Team Inc. "In the short-term, we don't anticipate any immediate effects unless one of the major carriers were to enter into Chapter 7." Vanguard Airlines ceased operations in August 2002, but only accounted for 1 percent of the total traffic at the Buffalo airport. Shuttle America began service in Buffalo on Sept. 28, 1999, flying $59 one-way fares to Hanscom Field, 20 miles northwest of Boston. Shuttle America officials said then bankruptcy protection was needed to attract additional capital for expansion. After dropping flights to Albany and Hartford, Shuttle America saw its Buffalo passenger count drop 20.3 percent between 1999 and 2000, going from 156,393 to 124,694. After emerging from bankruptcy protection, Shuttle America left the Buffalo market in 2001. Lott said the key for any transportation authority is to show that there is still a market for the flying public no matter what the destination. "They need to show the airlines that there is still a strong demand for air travel," he said. "Nonstop service is the most popular along with regional service. From Buffalo, you need access to the business and leisure markets." Marketing the Buffalo airport is an ongoing process to increase its options for Western New York customers in terms of frequency and destinations, said Douglas Hartmayer, director of public affairs for the Niagara Frontier Transportation Authority. "We also work very hard to keep the airport as cost effective as possible for our airlines to operate," he said. "Their cost of doing business in Buffalo is comparable of doing business at another airport of similar size. It's important to maintain that focus as airlines continue to change the way they do business." Passenger boardings for the month of February were down almost 2 percent because of a 10-hour closure on Feb. 23 due to bad weather. Boardings totaled 137,159, compared to 139,341 in February 2002, down 1.57 percent. Total flights were down nearly 5 percent for the month at 2,321, compared to 2,431 in February 2002, a 4.52 percent difference. The airport had nearly 4.2 million passengers in 2002 with 4.3 million passengers in 2001 and 4.2 million in 2000. Added service Despite turmoil for some of the major airlines, others continue to flourish here. Delta Air Lines will expand its connection service between Atlanta and airports in Buffalo and Rochester starting June 1. At Buffalo, the new schedule will feature two new nonstop Delta Connection round-trip flights, expanding service between Buffalo and Atlanta to seven nonstop flights daily operated by Delta Connection carrier Comair. At Rochester, the new schedule also will feature two new nonstop Delta Connection round-trip flights, expanding service to Atlanta to six nonstop flights daily, flown by Comair and Atlantic Southeast Airlines. Delta had 16,085 passenger boardings at the Buffalo Niagara International Airport in February. With 214 flights, Delta accounted for 9 percent of the airport's total flights for that month. Northwest Airlines increased its Minneapolis seasonal service with one daily nonstop flight this month. Northwest accounted for 8 percent of the total passenger boardings at the airport in February with 174 flights. US Airways is increasing its weekend service by adding one regional jet to New York City on Sundays, increasing service to seven flights. The airline will also add one additional mainline jet to North Carolina on weekends to handle seasonal Florida demand. Boardings for Southwest Airlines increased nearly 4 percent, totaling 23,617 for the month, compared to 22,716 in February 2002, a 3.97 percent increase. Southwest arrived in October 2001 with 10 daily nonstop flights to Baltimore/Washington, Las Vegas, Orlando and Phoenix and direct or connecting service to 27 other cities such as Los Angeles, Nashville and Tampa Bay. Fares started at $65. Boardings for JetBlue Airways increased nearly 17 percent, totaling 15,575 for the month, compared to 13,327 in February 2002, a 16.87 percent difference. JetBlue entered the market in February 2000 with two direct (single-plane) flights and one connecting service daily to Ft. Lauderdale. The airline has since added two daily connecting services to Tampa/St. Petersburg. Copyright(c) American City Business Journals Inc. All rights reserved. You can view this article on the web at: http://www.bizjournals.com/industries/travel/airlines_airports/2003/04/07/buffalo_story3.html