Where have all the John Wayne Passengers Gone?
The following article from the Orange County Business Journal is reproduced with the approval of the OCBJ. The articles are published electronically here as a public service. The OCBJ supports the conversion of El Toro to a commercial airport. Statements made by the authors do not necessarily reflect the views of the El Toro Airport Info Site Team.
Published November 9, 1998.
Where Have All the John Wayne Passengers Gone?
Officials Are Puzzled by 4% Drop-Off in Passengers
This Year
By PETER BRENNAN
When Newport Beach resident Tom Naughton recently looked for a flight from here to Phoenix, the price quoted for leaving from John Wayne Airport was three times the price of leaving from the Long Beach Airport.
"It was a $180 difference for two tickets," said Naughton. "It was worth $180 to drive down the freeway."
Could the high fares be the reason that John Wayne is on a pace for a yearly decline of 4% in passengers, its first of the decade? It's not clear cut because fares have always been higher at John Wayne and a recent survey showed that its passengers are not as concerned with high prices, but rather want more flights. Airport officials are puzzled by the decline.
"We just don't know exactly why," said Kathleen Campini Chambers, spokeswoman for John Wayne Airport.
The decline comes at a time when passenger traffic at LAX increased 2.1% in the first eight months of 1998 (it did decline 1% in August) and national passenger traffic is up 3.2% for the 12-month period that ended in July.
And it's not just commercial airline passengers -- John Wayne is showing declines in every one of its major uses, from air cargo to general aviation to air-taxi operations.
Observers suggest that traffic was affected by El Nino earlier this year and a strike by Northwest pilots in September, but those factors affected LAX, too. Also, John Wayne's smaller general aviation runway was shut down for a month.
But an examination of the statistics shows a steady decline every month this year in almost every category, seeming to rule out such short-lived factors affecting only one segment.
The decline means that 240,000 fewer passengers have used the airport this year than last year. John Wayne's statistics don't show which of the 11 commercial airlines have declined the most in passengers, but its noise abatement program does reveal that six airlines have reduced their numbers of flights into John Wayne in the second quarter of 1998 compared with last year's second quarter. The most significant decline was 24% at America West. Five airlines increased the number of flights in the period, most notably Delta, which went up 8.6% in the second quarter this year.
While in past years John Wayne has traditionally had higher fares than competing airports and still grown its number of passengers, this year is different.
Thom Nulty, president of the largest travel agency in Orange County, Associated Travel, said he's not sure why passenger traffic is down but he suspects companies are more conscientious about air fares. "There's been a tremendous amount of focus on getting the lowest fare possible from our corporate clients," Nulty said. "They are utilizing more often Long Beach and LAX.
I know one flight to Phoenix that cost $169 from John Wayne Airport, but $105 from Long Beach and $88 from LAX." John Wayne's cap of 8.4 million passengers annually appears to be the most significant reason for the decline. Last year's 7.7 million passengers was the closest that airlines came to the cap. But the fact that they are not growing closer to the cap is a sign the airlines have not yet figured out what to charge their customers.
"Because the cap limits supply, the air carriers are raising prices. What they haven't found yet is where is the price sensitivity of customers," said former John Wayne Airport Director O.B. Schooley. "The airlines' current strategy is to fly yield, not passengers. More price-sensitive passengers like tourists are using other airports."
Nulty also suggested another plausible reason for the decline: the ongoing parking lot construction has made John Wayne less convenient by temporarily reducing the number of spaces near the terminals. These reasons might explain the decline in passenger travel, but what's happening with air cargo? It has declined 14.6% in the first nine months of this year, to 13,620 tons. John Wayne is not alone in this regard. LAX saw a 4.6% decline in air cargo in the first eight months of 1998. John Wayne Airport statistics don't break the decline down by carrier, but the stats do show that UPS and FedEx are flying about the same number of flights as last year.
"We haven't noticed a decline in our business" at the John Wayne Airport, said Ken Shapero, spokesman for UPS Airlines. He said the airline is not about to reduce the number of flights: "We fought for many years to get into John Wayne with a very quiet airplane."
Some have speculated that since companies are using the Internet to ship documents, this has cut into the business of the couriers. But Shapero said the Internet has a positive impact. "The more people use the Internet to purchase things, the more they have shipped," he said.
Also on the decline is the number of air-taxi operations, which went down 48.3% in the first nine months of the year. Part of the reason could be that Delta commuter airline Skywest canceled its services. But once again, that occurred only in September, while the decline has been ongoing for most of the year. One possible explanation is Delta increasing its regular commercial flights into John Wayne. And the number of general aviation flights has also declined, 8.7% for the year. Part of that could be attributed to rebuilding the aviation landing strip in September, but again, the decline began earlier this year.
General aviation experts said it could be that the cost of operating small planes has increased so much in recent years that there are fewer fliers.
For more on this subject see Why Fly Five Million Empty Seats?