MY TALK AT TRB (June 2023)

A4A's Chief Economist #JohnHeimlich, who chairs the Airlines Subcommittee of the #TransportationResearchBoard asked me to participate in their mid-year meeting held two days ago. He has listened to my unvarnished messages over the years at MIT and other forums.

The room in DC was full of many stakeholders with many zooming in as well. #EdwardRussell, transport editor and reporter for #AirlineWeekly was also in the room and wrote an excellent story. https://lnkd.in/g8wNjwjb.

Lots of whining in DC today. Each time the FAA is in need of being reauthorized by Congress, funding for EAS, SCASD and a myriad of pet projects becomes part of the discussion. Smaller airports believe they will shrivel and die an economic death if they were to lose their 2 times a day commercial service to somewhere. NOT!

There are 107 EAS-designated airports in the lower 48 states today. 71 are within 120 miles of a larger airport that likely has a better menu of service that provides air travel consumers a choice that their existing local service likely does not.

There are 168 nonhub airports located in the lower 48 states and 136 are within 120 miles of a larger airport. Nonhub airports as defined by the FAA account for nearly 2/3 of the commercial air service airports in the lower 48. As aircraft get bigger, how many airports do we need? These airports generate 4% of the traffic/revenue earned by the air carriers serving those markets.

THAT ECONOMICS THING

For those who believe they are entitled to commercial air service in perpetuity, be honest and appreciate that markets morph, markets grow, and many markets do not produce the same demand as they did 4 1/2 decades ago. It is time to "common-sense" many things.

Case Study: Persian Gulf. These countries recognized that their oil reserves will not support their economy forever. Their ESSENTIAL is to remake their economies in anticipation of that event. And they are. Look no further than the UAE and the making of Dubai into a business center with leisure attributes. New economic generation.

ALL NONHUB AIRPORTS PAY ATTENTION

Why is this even being mentioned? Because it is likely that the local economies at many points on the US map still believe in air service entitlement despite not generating the same historic economic activity.

Going forward, every nonhub airport master plan should be required to have two scenarios or not be funded: 1) with commercial service; and 2) without commercial service. Airport boards, like any board, should be thinking about how the airport infrastructure they oversee can maximize its economic generation.

Economic generation is much more than air service. Just think, a small airport that loses its commercial service steps back and incents another industry to locate on the airport that will generate jobs and increase the tax base just might attract better air service tomorrow. Look at the Gulf States.