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ABQ Sunport braces for impact

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Copyright © 2013 Albuquerque Journal

Albuquerque officials are expecting their airport – already reeling from lost business in recent years – to suffer a “significant” blow when the Wright Amendment expires next year giving Southwest Airlines the legal right to fly right over us en route to other destinations.

Luggage is loaded onto a Southwest airliner at the Albuquerque Sunport on Nov. 8, 2013. (Dean Hanson/Albuquerque Journal)

Luggage is loaded onto a Southwest airliner at the Albuquerque Sunport on Nov. 8, 2013. (Dean Hanson/Albuquerque Journal)

For decades, the amendment has forced Southwest to restrict its nonstop flights from Dallas Love Field to destinations within Texas and nearby states. The country’s largest domestic airline, as a result, often touched down at the Albuquerque International Sunport on its way from Dallas to popular destinations like Los Angeles and Las Vegas, Nev.

But when the amendment expires next October, Southwest – which represents about 60 percent of the Sunport traffic – will be free to bypass New Mexico when heading to bigger population centers in the Western U.S.

While Southwest is not divulging its plans, local officials are bracing for service cuts to an airport that already is seeing steady decreases in traffic.

“It’s going to be a negative impact, there’s no doubt about that,” city Aviation Director Jim Hinde told the Journal. “(It’s) certainly not going to be positive.”

Southwest says it’s “too early to tell” what the impact will be at the Sunport.

“We’re excited that we’ll be able to offer nonstop service out of Dallas Love Field, but at this point we do not know what our service options will look like,” Southwest spokeswoman Michelle Agnew told the Journal in an email.

The airline certainly is itching to be rid of the Wright restrictions. Dallas media reported that the airline set up a countdown clock at its headquarters in preparation for Oct. 13, 2014, the date it will be free to offer nonstop service from Dallas to anywhere in the Southwest system.

The Wright Amendment, part of the International Air Transportation Competition Act of 1979, prevented aircraft with more than 56 seats from flying out of Dallas Love Field – Southwest’s home – beyond a certain geographic area.

The law was intended to protect the then-new Dallas-Fort Worth International Airport and initially restricted nonstop flights except to a handful of nearby states.

Congress repealed the amendment in 2006 with an expiration in 2014.

Hinde said the Sunport probably won’t know anything until just before Southwest releases its schedule for the post-Wright era, something expected early next year.

“There are so many assumptions involved. We’re really hesitant to throw any number out there,” he said when asked about the projected impact. “We just know it will be relatively significant and it’s going to be negative.”

Southwest has been the Sunport’s leading carrier for decades, typically representing as much as 60 percent of the airport’s business.

This month, the Sunport will average 78 departures a day, excluding trips within the state. Of those, 38 are Southwest flights. No other airline comes close: United and American are tied for a distant second with 13 flights per day each.

Southwest Airlines is responsible for more than half of the traffic at the Albuquerque International Sunport, but it remains to be seen what will happen to service when the Wright Amendment expires next year. (Dean Hanson/Albuquerque Journal)

Southwest Airlines is responsible for more than half of the traffic at the Albuquerque International Sunport, but it remains to be seen what will happen to service when the Wright Amendment expires next year. (Dean Hanson/Albuquerque Journal)

Southwest maintains its dominant status at the Sunport even after the recent elimination of several short-haul routes from Albuquerque to cities like El Paso, Lubbock, Midland and Tucson.

“One of the bigger questions is will we actually lose destinations,” said Dan Jiron, the Sunport’s public relations and marketing manager. “We don’t think that’s going to be the case.

“We do think there will be some frequencies that go away. There may not be as many flights to Los Angeles or Vegas or some of the other destinations west simply because they don’t have to stop in Albuquerque now.”

Jiron said lobbying Southwest to prevent cuts isn’t likely to make much difference.

“They’re in a business to make money and any amount of lobbying is not going to make the case or make them change their mind or make their decision,” he said.

One bit of good news, Hinde notes, is that Southwest is increasingly seeing fuller flights in the market. Cuts and more streamlined operations mean Southwest’s Albuquerque flights averaged 67 percent full in fiscal year 2013. That number has increased each of the last four years.

For the Sunport’s newest carrier, JetBlue and its daily to New York, traffic “has been very good for a first-time entrant on a new route,” said Jiron. JetBlue aircraft have been flying 80 percent full.

“That’s very good,” he said. “It’s very promising. We’re very pleased. I think JetBlue is pleased.”

While city officials can only guess at Southwest’s plans, they say they’ve been preparing for several years to weather potential cuts and expect to remain in solid financial shape. They’ve diversified the facility’s revenue stream, getting more than half from sources other than airlines, such as airport users like Cutter Aviation and Eclipse Aerospace, and from increased parking rates.

They’ve also restructured the Sunport’s debt so that bonds are set to mature and annual repayment falls from $26 million to $14 million next fiscal year.

“We’ve been planing for this for several years now,” Hinde said. “It’s not like we’re going into it blind.”

City officials also are looking to bring in new airlines and willing to offer certain incentives, such as the temporary waiver of certain fees or help with marketing. Jiron said other airlines likely are watching Southwest closely and may be eager to fill any potential voids.

“If there’s demand and profit to be made, I don’t think there will be any hesitation by other airlines to pick up the slack,” he said.

The Wright Amendment’s expiration comes at a time when the Sunport already is seeing declines. Passenger traffic fell each of the last five years and is down 7.3 percent so far this year.

Southwest Airlines has been the dominant carrier at the Albuquerque International Sunport for decades. (Dean Hanson/Albuquerque Journal)

Southwest Airlines has been the dominant carrier at the Albuquerque International Sunport for decades. (Dean Hanson/Albuquerque Journal)

Related businesses — like the Sunport gift shops run by Avila Retail Development and Management — have felt the shift.

The shops haven’t seen their sales fall quite as fast or far as airport traffic, but they did drop about 15 percent between 2008-12, according to CEO Teresa Curl. Numbers are up a bit in 2013 thanks to some remodeling, but not as much as generally expected after such improvements, she said.

Curl and Kathleen Avila — who owns the airport retail company with her husband – are worried about potential service cuts next year, but say they’re channeling their energy into broadening their customer base.

“There’s not a lot we can do about what Southwest Airlines does in New Mexico,” Curl said. “We’re just looking at what we can do to safeguard our business.”

State Tourism Secretary Monique Jacobson said she is unaware of Southwest’s plans come 2014. Since a such issues are beyond her department’s control, she said the focus remains on creating traveler interest in the state.

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