Passenger Leaks and the Fate of Small Community Air Service

Abstract

Using airline‐booking data from Sabre, this article documents the proportion of passengers who drive and fly from a hub airport, rather than take a commuter flight. If fewer passengers leaked to a hub, community airports would have more enplanements. Price and quality factors affecting leaks are econometrically estimated for the state of Wyoming. Fare differences, distance between the local airport and hub and the proportion of regional jets making the hub connection are important determinants. Short‐run elasticities are estimated to measure the sensitivity of local air travelers to these factors. Leaks increased after September 11, 2001. (JEL L52, L93)

Airport competition – Regional airports losing ground to main airports

“…These findings are in line with the arguments in the literature reviewed (Innes and Doucet, 1990;Suzuki et al, 2003;Phillips et al, 2005;Zhang and Xie, 2005;Fuellhart, 2007).…”

“…Similarly, Phillips et al (2005) found that level of regional jet services was an important determinant of traffic leakage in single-airport regions for both advance (leisure) and non-advance (business) purchase passengers. Local airports with 10 or more frequencies were more likely to have a regional jet service than a turboprop service.…”

“…Relevant aspects of level of service are (Innes and Doucet, 1990;Suzuki et al, 2003;Phillips et al, 2005;Zhang and Xie, 2005;Fuellhart, Innes and Doucet (1990) addressed the effect of access distance and level of service on travellers' choice of airport decisions in New Brunswick, Canada, and found that air travellers were willing to travel significant distances by road in order to reach an airport where a jet service was offered. Other significant variables were flying time differences, and whether or not a direct flight to destination was available.…”

“…Air fare differences and distance between the local airport and hub were additional important leakage determinators for advance-purchase passengers, while non-advance purchasers tended not to be sensitive to price. According to Phillips et al (2005), the reason for the latter group of travellers' inelasticity in terms of price is that the employer typically pays for these tickets. Thus, these travellers do not base their travel decisions on how far away the hub is, but they do care about the type of aircraft.…”

Reconsidering the regional airport network in Norway

“…In an intra-national "hub and spoke" flight network in which direct flights to the capital are unavailable, demand for transport to the local airport can leak to car transport for the trip to the central airport [17]. Using logistic regression with travel time to airport as an explanatory variable, [8] found that traffic leakages to large airports are commonly found at regional airports in Norway, particularly for leisure trips to the capital or abroad.…”