Baton Rouge Metropolitan Airport Passenger Volume up Double Digits in August 
Baton Rouge Metro Airport (BTR) passenger enplanements were up 12% in August despite numerous Houston flight cancellations on United due to Hurricane Harvey. Year-to-date enplanements are up 4.2%. A total of 61,930 passengers traveled through the airport in August, and 508,193 year-to-date.

Increased seating capacity due to the use of larger aircraft at BTR was a big factor in the uptick in passenger volume according to airport officials. The majority of BTR fights are now operated with larger, dual-class regional jets or mainline aircraft that include First Class seating.

“The additional seating capacity due to the larger regional jets is the equivalent of several more daily flights,” said Ralph Hennessy, Interim Director of Aviation at BTR. “We are grateful to our incumbent airlines for upgauging aircraft on many flights, and we encourage area residents to always check BTR and support the additional service.”

Hennessy added, “Keeping a high percentage of the seats filled on existing flights is the most critical factor in retaining and expanding airline service. It is especially important to show the airlines that we can fill the larger aircraft.”

American edged Delta for top BTR passenger share in August at 41% compared to Delta’s 40%, followed by United at 19%. United’s numbers were adversely impacted by August flight cancellations due to Hurricane Harvey’s impact on their Houston hub.

BTR’s passenger count is up for the 12 th consecutive month dating from September of 2016, and total passenger volume is the second highest among commercial airports in the State.  
Today’s Airline Environment
The airline industry has experienced major changes over the past 10 years, including radical consolidation of the U.S. carriers, resulting in the Big Four airlines – American, Delta, United, and Southwest – controlling about 85% of the domestic seating capacity. Excess airline seating capacity has been removed and profits are more consistent now. Additionally, the pilot shortage has adversely impacted industry growth, and made it particularly difficult for start-up airline activity.

In other words, the potential airlines to recruit for new service, especially for smaller airports, are much more limited than in the past. Nevertheless, Baton Rouge Metro Airport officials are consistently attending conferences and meeting with airline planners to solicit new service for BTR. Airline Planning Departments determine where an airline flies and what aircraft it utilizes on the routes. 

Even though airlines have access to a plethora of data to assess markets, BTR provides data and route analyses to make the case for new service. The airport supplements its own data with assistance from consultants who have extensive experience working as airline planners. Consultants used by BTR have held top management positions in the planning departments at some of the largest U.S. airlines.

Airlines are more risk averse today and do not want to return to the days of adding excess capacity that impedes profitability. New routes are a major investment. Airline planners look at passenger traffic trends, and they follow the passengers. Although air service can be something of a chicken and egg thing, today’s airlines are much less likely to risk a “build it and they come” approach. They want to see that the current airport service has strong community support with a clear need based on existing load factors (% of seats filled). 

Other key determinations in air service include the size of the market, both for inbound and outbound travel. For instance, major “destination markets” such as Orlando and New Orleans have high “inbound” passenger demand due to tourism and conventions which inflates the demand of the market. Geography is also important. A smaller airport near a larger airport is in a more challenging position than one more isolated. 

“U.S. airlines have become able to match seat supply and demand with razor-sharp precision—assuring profits and giving them unprecedented power over how to price and where to fly. Today, airports hold virtually zero power in their relationships with the carriers. Just 37 percent of airports on the U.S. mainland generate 97 percent of domestic air service demand, according to data compiled by Bill Swelbar, an aviation researcher at consulting firm InterVistas. Airlines can pick and choose the most profitable cities to serve, and even midsize destinations are struggling to compete. If Nashville or San Antonio must hustle like mad for air service, and both do, where does that leave a town like Lansing, Mich.? 

The industry’s concentration means each airline now has its own well-defended turf and can deploy airplanes to where they earn the most money. That puts medium and smaller markets at a distinct disadvantage—even those that have proved solidly profitable for decades—because their decent performance may be worse than a carrier’s opportunity at another airport.”
Justin Bachman - Bloomberg
BTR Service Post-Katrina
The industry has seen domestic flight reductions since 2007, with small airports especially hard hit. New nonstop flights to a number of destinations were added at BTR post-Katrina, but many were discontinued due primarily to low support. The combined load factor average for the cancelled flights was 62%. However, BTR’s current average is much better – about 80% for combined flights on American, Delta, and United – which is a profitable load factor and better than many peer markets. BTR is the second largest airport in the State and immediate gulf region by passenger volume, and has outperformed peer airports (similar size) in the region over the past four years in seating capacity growth and passenger count changes. 
Service additions such as BTR to Charlotte (CLT) hub flights introduced by US Airways in 2010 have been successful (US Airways merged with American). BTR uses the CLT hub service as an example for airlines that are hesitant to serve a route from BTR they already serve from New Orleans (MSY). In the case of Charlotte, the flights have done well out of BTR and not adversely affected the MSY to CLT flights. Both continued to grow after service started at BTR. 

More recently, BTR seating capacity increases from aircraft upgauges to larger, two-class regional jets are doing well initially, but it is very important that the seats continue to be filled to sustain the service frequency on larger jets. The additional seats are the equivalent of 2-3 more daily flights. To date, BTR’s passenger volume has been up 12 consecutive months, including up 12% in August. 

Besides supporting existing local airline service through high load factors, financial incentives can be influential in securing new flights, particularly at smaller airports. For example, Gulfport/Biloxi lured Allegiant Airlines to start nonstop service to Orlando with a $1.1 million State revenue guarantee that would offset revenue shortfalls should they occur in the first year. Shreveport used incentive money to secure nonstop service to Charlotte on American recently. The funds were collected through a hotel/motel tax and administered by a Regional Air Service Alliance (RASA). The FAA restricts use of airport funds for those type incentives, but “third-party” incentives allow for more flexibility. Revenue guarantees are popular since the community shares some of the risk associated with new flights for a period of time while the route develops (no money is paid if route is profitable from the beginning). 

BTR looks forward to support from the community – Including business leaders, senior corporate management, Chambers, and others that can lead the “fly-local” effort. It is difficult for any airport to do it alone; the backing of the community can make a major difference. And flying BTR whenever you can supports the local economy since the airport has $1.1 billion in annual economic impact and 4500 direct and indirect jobs. 

BTR is served by the “Big Three” airlines – American, Delta, and United – with frequent flights to some of the country’s largest hubs. Passengers can start at BTR and go anywhere. This global connectivity links the world to Baton Rouge. And BTR is closer, faster and easier – from terminal-front parking to fast security clearance. We hope to see you at BTR the next time you fly! 
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