High fuel costs prompt airport flight cuts
Sky-high gas prices are taking a toll on the Tri-Counties’ largest airports, while smaller regional facilities await their fate.
About a month after American Airlines and its affiliate American Eagle publicized its efforts to compensate for rocketing fuel prices, the company announced June 26 it will discontinue its operations and maintenance facility at the San Luis Obispo Airport. The Santa Barbara Airport also was informed of flight cuts last week, although it will not be losing any airlines.
The San Luis Obispo facilities are among eight being cut of the total 250 airports in which American’s parent company AMR Corp. operates. American Eagle will stop all San Luis Obispo service, which offers daily flights to and from Los Angeles, in November.
A spokesperson for American said the company’s American Eagle division has lost money on flights to San Luis Obispo – and the other cities where it canceled flights – for several years.
The current fuel environment, she said, exacerbated the problem. The airline is closing its maintenance facility in San Luis Obispo because it is geared towards Saab aircraft, which American is replacing with its regional jets and other propeller planes, the representative said. The facility also works on regional jets.
“It did come as shock because with the maintenance base, we thought they would … remain solid and they’ve been here 30 years, so it was a surprise,” said San Luis Obispo Airport Director Klaasje Nairne. “They have an 86 percent load factor out here but it’s fuel, fuel, fuel.”
Nairne said the Saab aircraft American used for the flights held 26 passengers, which was not enough to make up for the operating costs without raising ticket prices above competitive rates.
The American cuts will result in a total loss of 84 company jobs, according to American, and a total of 100 jobs at the airport, according to Nairne. American said all the employees will have the opportunity to apply for other open positions at American.
Delta Connection also announced it will drop its one daily flight between San Luis Obispo and Salt Lake City in September. Since Delta is served by SkyWest, which operates United Express at the airport, Nairne said no jobs will be lost because of the cancellation.
Although Nairne said the airport may still experience more flight reductions, she is confident it will recover from the loss.
“There is some concern with U.S. Airways because they are reducing their visibility at their Las Vegas hub, so it may be something we see in the near future, but we’re actively working to engage others to fill the voids,” Nairne said. “This has happened before in 1997 – we lost nine flights a day and we recovered from that within a period of two years.”
Santa Barbara Airport Director Karen Ramsdell said U.S. Airways would cancel two of five of its daily flights between Santa Barbara and Phoenix and its only daily flight to and from Las Vegas.
American Eagle will stop one of its daily flights between Santa Barbara and Los Angeles.
Offsetting the loss, all of American Eagle’s propeller planes will soon be replaced with regional jets, adding about 10 seats to each flight.
Ramsdell said she does not yet know when the changes will take effect. She said no jobs have been affected by the cuts. As of June 30, the Santa Barbara Airport had not been informed of any changes to its Delta or United flights, Ramsdell said.
“While I have a sigh of relief with this round, I am cautiously optimistic predicated on what the future is going to bring in terms of fuel prices and moves the airlines are going to make in order to try and stay profitable,” Ramsdell told the Business Times.
When asked if the cuts have raised concerns about the new terminal project underway at the airport, Ramsdell said, “I’m sure that question is crossing a lot of people’s minds and at this point, we’re just moving cautiously forward.
“Through this project, in the past we have done a sensitivity analysis of how far down the passenger count would go for us to be jeopardized financially – it’s a pretty big cut.”
On July 9 and 10, Ramsdell will attend the Energy/Air Service Summit, where speakers will address how rising fuel costs are impacting the industry.
Oxnard Airport Manager Jorge Rubio said the airport has seen and does expect some changes to its flight schedule, though he can’t confirm the cuts are because of rising fuel costs. United Express offers four flights a day to and from Los Angeles.
“The only thing we can do is speculate and probably the reason is fuel prices,” Rubio said.
In May, Rubio said there were some minor and temporary reductions in flights that returned to normal in June. However, on July 1, Rubio was informed that beginning July 8, United will cut one flight per week in and out of Oxnard, resulting in just three round-trip flights on Tuesdays.
“I don’t think it will cut any jobs but … the airline has changed schedules once in a while and it hasn’t affected us but the crisis is still there and we’re just hopeful not to see any more cuts,” Rubio said.
Rubio said the flight schedule is expected to return to normal again by September.
Allegiant Air has been offering flights between Santa Maria and Las Vegas for about two years. Sky West provides five to seven flights a day between the Santa Maria Airport and Los Angeles.
Santa Maria Airport Operations Supervisor Ric Tokoph said there have been no flight changes because of rising fuel costs and “at this time,” he is not concerned that Allegiant or SkyWest will be cancelling any flights at the airport.
