GREEN In the end, the decision to move did not take everyone by surprise. In fact, in the three years since merging with Airtran Airways and ceasing Airtran flights from the Akron-Canton Airport, it had become increasingly evident to many that CAK was simply not built for Southwest Airlines.
"I can’t speak for them, but they were a good partner and we hope they can come back some day," said Akron-Canton Airport President and Chief Executive Officer Rick McQueen of the January announcement by Southwest that it would be moving its Northeast Ohio operations from CAK to Cleveland-Hopkins International Airport. "When Southwest bought Airtran, they tried to make it work, but they had a little different business model."
On the heels of Allegiant Airlines leaving Akron-Canton Airport for Cleveland-Hopkins in September, after little more than two years at CAK, the Southwest announcement seems to further support the notion that the airline industry overall is shifting its focus and operations to fewer, larger airports. Southwest, for instance, announced that it will also be ceasing operations at Dayton International and moving to Cincinnati/Northern Kentucky International Airport, offering daily nonstop flights to Chicago and Baltimore International, the day after it officially leaves Akron-Canton on June 2.
So where exactly does this leave smaller regional airports like CAK – both currently and, perhaps even more importantly, in the not too distant future?
Down, but not out
When the final Southwest Airlines flights leave CAK next month, the airport will find itself facing a daunting, if not unprecedented, crossroads.
McQueen said after serving an all-time high 1.8 million passengers in 2012, CAK still connects more than 1.4 million passengers and contributes an estimated $300 million to the local economy each year.
"I’ve been here 34 years and have seen a lot of ups and downs," he said. "I think the number (of passengers) is going to drop a little more (following the Southwest departure) and we’ll end up at 1.3 million passengers before we start turning a corner."
Southwest, which reportedly carries a quarter of all U.S. passengers, set a post airline de-regulation precedent with both low fares and policies such as not charging for baggage and change fees – while many of their competitors saw such practices as a way to make up for losses brought on in part by the emergence of low-fare airlines.
But an airline will only stay at a location as long as it is filling airplanes, McQueen said. And in spite of the loss of Southwest, he added, three of CAK’s four carriers, American, Delta, and United – the latter Akron-Canton’s longest continually operating carrier – are also three of the four largest airlines in the nation.
"Part of it is consolidation in the industry," McQueen said of the Southwest situation, which he described as at once isolated and indicative of nationwide – and worldwide – trends in the airline industry.
"It’s like any business cycle and we’ve been on a run here for 15 straight years that has been amazing," he said. "My job is to make sure we are positioned for anything that comes in the future."
That has led to recent and ongoing infrastructure efforts at CAK, such as a $65 million, 600-foot runway extension that, with current technology, can now accommodate flights as far as South America.
Plans are also underway for an estimated $35 million project to repair and renovate the five American and Delta airlines gates at the airport, which McQueen called "very 1960s."
"It (the Southwest departure) hurts and we are going to be tightening our belts, like any business would, and putting off some things – making sure our investments are focused toward the future," he said.
Some airline industry experts like noted economist and Ohio State professor of public affairs Dr. Edward "Ned" Hill warn that in this age of consolidation, airports must be extremely cautious when making such long-range investment decisions.
"My advice? Don’t take on a lot of debt," Hill said. "The airline industry came out of the 2001 recession in bad financial shape. It had a difficult time with the cost of oil being very expensive and it made efficiency gains – and a profit motivator – in merging. But it turned into a cartel."
Hill said that, logically, airlines will always locate nearest to the largest population of potential customers. The key then for midsize "feeder" airports like CAK, particularly in light of events like Cleveland-Hopkins’ loss of its United Airlines hub status in 2014, is to be able to anticipate customer needs – determining how far they will travel, and pay, for a flight to a given destination.
Simply put, will travelers in the more southerly parts of Northeast Ohio care to drive an hour to Cleveland? And what does an airport like CAK need to offer to entice them to stay closer to home?
Giving travelers what they want
For Renee and Ron Brinker, of Richfield, the decision to fly Spirit Airlines to Las Vegas was a simple one.
"We fly Spirit on a fairly regular basis – it’s a budget airline so we know what we’ll get," Ron Brinker said as airport and city representatives mingled with travelers and at least one Las Vegas showgirl/Las Vegas Convention and Visitors Authority employee April 27, to celebrate the launch of Spirit’s first non-stop flight from CAK to Sin City.
"I love non-stop flights to Vegas, it’s the only way I like to go," Renee Brinker said. "With a lot of places, like Cleveland, you have a stop in Denver."
McQueen said that while the arrival of Spirit - which began offering non-stop flights from Akron-Canton to Orlando International Airport, Tampa, Fort Lauderdale, and Fort Myers in November, and daily service to Myrtle Beach in April – had no connection to Southwest leaving, it has certainly has been a short-term win-win for both the airport and the airline.
"My predecessor, more than eight years ago, was talking to Spirit," he said. "They saw a market they wanted to get into at this time."
Stephen Schuler, senior manager of external communications for Spirit Airlines, said that while the airline's four Florida flights from Akron-Canton were immediately popular, its most recent non-stop addition has been part of the long-range plan from the start.
"As soon as we arrived, the number one question was, ‘when are you going to Vegas?’ " Schuler said.
The business relationship, McQueen said, is illustrative of the logic of having resources in place when an airline comes calling – without breaking the bank in the process. It also supports Hill’s contention that CAK’s most promising future market is that of low cost, non-stop vacation destination flights.
"Think about it; if an airline says it wants to run to the West Coast and you say, ‘I will be able to do that in 10 years,’ they are going to go somewhere else," he said.
A number of recent national studies of airports, and passenger satisfaction in particular, support McQueen’s hypothesis.
A 2012 study by global management consulting firm Oliver Wyman found that most travelers prefer non-stop flights to their ultimate destination and "the quality of the airport and the ease of the transfer process play major roles in customer satisfaction … airports seeking to differentiate themselves will need to take a hard look at their infrastructure, processes, appearance, and service offerings."
Moreover, a 2015 J.D. Power "North America Airport Satisfaction Study" said the airport industry overall has "undergone a major cultural shift, as traveler experience has become the focal point of its strategy to improve overall satisfaction."
The J.D. Power study pointed to areas of greatest importance to air travelers, including findings that check-in and security line efficiency can make or break airport satisfaction; gate cleanliness is critical; younger travelers who are more satisfied with an airport spend more money; business travelers in the terminal less than 30 minutes spend more than double that of leisure travelers; and, echoing a number of national news stories in recent months, dissatisfied airline customers "are very vocal."
Also worth noting, on the North American Airport Satisfaction Study’s list of the top 33 most highly ranked midsized airports, Cleveland-Hopkins International came in at number 33.
What the wild blue yonder looks like from here
Taking into account such findings, McQueen said he believes CAK is taking the right kind of proactive steps to address the concerns of its ultimate audience, the customer.
"I’m optimistic about the future," McQueen said. "If we were down to 250,000 passengers like we were when I started in 1982, right after deregulation, then I would be concerned. Our numbers are currently trending downward, but we’re still doing pretty darn good."
What CAK does in the coming years to ensure that turn, however, might be some of the most important business decisions it has made in its 70-plus year history.
"We are continuing to talk work with our airlines, looking for opportunities we don’t already serve," McQueen said. "There is no doubt that there is competition (with larger airports like Cleveland-Hopkins), but we served 1.4 million passengers last year – that shows there are enough people in Northeast Ohio to serve two airports. Everybody wants to be bigger, but we’ve always known there is always going to be a need for regional (airports) to feed those hubs."
In part two of the series, we will take a closer look at the relationship, both positive and negative, between the Akron-Canton and Cleveland-Hopkins airports, as well other areas of the country served by several airports of various sizes and why there are two mid-sized commercial airports in Northeast Ohio.