Consultant: Riverton airport woes symptom of larger national airline issues, “be happy you have service”

The passenger terminal at Riverton Regional Airport. (Ernie Over photo) 

Part 1 of 2

(Riverton, Wyo.) – In a sobering reality check, an airline consultant told the Riverton City Council Tuesday night that Riverton Regional Airport was lucky to have the airline service it had, even with its problems. Nick Wangler spoke to the council via speakerphone and, through a PowerPoint presentation, spent about an hour outlining the woes of the industry which has resulted in many smaller airports, like Riverton, losing their passenger service altogether. He also said the current challenges facing the industry have resulted in a national 17 percent decline in the number of flights offered and an 11 percent decline in the number of passenger seats available.

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(click to enlarge-Nick Wangler, Forecast, Inc.)

Wangler said if Riverton wanted to improve its service, it has to decide what it wants and then go out and try to make it happen. He cited examples in Cody, Jackson, Gillette and Rock Springs where the communities guaranteed air service, agreeing to make up the difference between the cost of flying routes out of those airports and the revenue they generated. He said if Riverton wanted another carrier, even though those options are limited, they would have to do the same.

Wangler helped to create the state of Wyoming’s Air Service Enhancement Program (ASE) that is funded by the state legislature. Goal of the program was to provide airline incentives to retain and increase air travel opportunities in the state. Overall, the campaign has been very successful for the airports who participate in the program, and for the state. Riverton Regional is not one of those airports, as it bowed out of the program after only one year. Since the ASE program was established, the state has attracted two million more passenger segments than its historic average, resulting in 667,000 new travelers flying into the state. Additionally, airline fares have gone down in Wyoming, although they are still somewhat higher than the national domestic average, Wangler said.

Under the ASE program, since 2003, Wyoming’s departing seat capacity has increased 24 percent while nationally, the passenger capacity has declined by 11 percent. In fact, Wyoming ranks only behind North Dakota in growth of capacity, and Wyoming is one of only seven states to see a capacity increase.

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(Click to enlarge-Nick Wangler, Forecast, Inc.)

He said the consolidation in the national airline industry has impacted smaller airports. “In 1995 14 different airlines made up 90 percent of the United States market,” he said. In 2004 the number of airlines shrank to an even dozen, and today, the change has been really profound, only five airlines control 90 percent of the market. This will not stop, we know it is happening.”

Since 2008, some 31 small airports across the country have lost their commercial service, none in Wyoming so far. And Wangler said that trend is likely to continue. “The challenge we have is this. If we lose something, the odds of getting it back are slim.” He said that when routes are dropped, the aircraft that flew those routes are dropped from service.

He also said fuel costs are a major driver in the consolidation and cutbacks. And he had an example. “In 2003, United had a fuel contract that was 94 cents per gallon and their annual cost was $2.1 billion. Today, their fuel cost is $3.12 per gallon and their cost has escalated to $6.9 billion. That’s $4.8 billion in nothing but fuel increases, and that’s why you’re seeing charges for baggage, seat selection and such. And the price of oil isn’t going down.” He said smaller airports with five flights a day are being cut back to three flights a day and air fares are rising as airlines cope with the fuel costs.

In Part 2, What can Riverton/Fremont County do?