All Airports Want Low Fare Airlines -- but Not All Can Keep Them

Poor Hunstville, Ala. Faced with being the "highest fare airport in the country," Huntsville went on a mission to attract low fare carrier service via the federal Small Community Air Service Development Program. It worked, but now the flights are failing miserably. What does this tell us? Every airport wants low fare service, but that doesn't mean they can support it.

In 2009, Huntsville filed its proposal to attract low fare carrier service. It was so concerned with the problem that it engaged the consulting firm Seabury APG to determine that the routes in need of service the most were Baltimore and Orlando. In these markets, Huntsville was losing travelers to airports with low fare carriers 100 miles north in Nashville and 100 miles south in Birmingham.

At the time, Huntsville predicted that the service would lose money in the first year with 80.4 percent of seats filled and make money in 2011 with 83.7 percent loads and slightly higher fares. Orlando was similar in expecting 80 percent loads. They aren't even close.

Huntsville won the bid for federal support, and in May, used its $1,000,000 grant to get AirTran (AAI) to start twice daily flights to Baltimore and single daily service to Orlando. In August, AirTran filled only 44.4 percent of seats on the Baltimore run and 52.9 percent to Orlando. And those are on AirTran's smallest, 117 seat aircraft. That ain't gonna cut it, and that was during a peak summer month.

Fares have plunged, and these are still the only nonstop flights in those markets, so if there was enough demand, the conditions would be right for success. But these flights just aren't working. This isn't the first low fare carrier to have failed here either. There have been a handful of previous attempts, none of which has lasted for long.

The reality is that most low fare carriers thrive on volume, and a lot of cities just can't generate it. Sure, people can get to Orlando and Baltimore now, but many would still rather connect on airlines where they have more flight time options and possibly some loyalty. But the greatest likelihood is that there simply isn't enough traffic to support a low fare carrier (other than Allegiant and it's super-infrequent model).

This should be a lesson to a lot of smaller airports out there. You all want low fare service, but it's important to step back and realize that sometimes it just isn't going to work. Instead, focus on cultivating better relationships with your existing airlines to strengthen service, even if the fares aren't rock bottom.

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