It was a tough month for Huntsville International Airport.
In the course of a few weeks, the U.S. Department of Transportation announced the airport had the highest fares in the nation; Moody’s Investment Service downgraded the revenue bonds of the airport authority; and two of the airport’s main airlines merged, creating the possibility of reduced flights.
“It’s a frustrating situation for us,” said Barbie Peek, director of marketing. “We feel just as frustrated as the consumers.”
Huntsville perpetually stays near the top of the list in the ranking of domestic fares compiled by the Transportation Department’s Bureau of Transportation Statistics. It has had the misfortune of being No. 1 before, and it managed it again in the ranking released Jan. 24 for the third quarter of 2012.
The average Huntsville round-trip fare was $522, according to the bureau. The lowest fares in the nation, from Atlantic City, N.J., averaged $133.
Huntsville’s competition had much lower fares. Birmingham fares averaged $383. Nashville fares averaged $360.
Peek said Huntsville International is competitive, despite the data collected by the Transportation Department.
Representatives of the Bureau of Transportation Statistics did not return calls Friday, but its website describes the ranking process. The quarterly list averages every round-trip fare for every passenger, then compares the averages of major domestic airports. It does not account for issues such as whether the fares were booked in advance.
“The dynamics of our community are unique,” Peek said. “You have lots of business travel. What impacts that average is the walk-up fares.”
The airport, Peek said, has no control of the fares charged. Its only tool for reducing fares is attracting discount carriers. In the third quarter of 2011, AirTran was operating from Huntsville International. The carrier’s comparatively low fares dropped Huntsville to the sixth-highest in the nation.
After merging with Southwest, AirTran discontinued its Huntsville flights.
“When you have a business community, there are so many unexpected trips you can’t plan for. The airlines know that, so they charge what the market will bear,” Peek said.
Federal government employees are heavy users of Huntsville International. Peek said the federal government takes bids from carriers to keep the rates as low as possible, but they are not always very low. The reason is the federal government’s bidding process places a premium on fares being about the same, whether walk-on or booked in advance.
The walk-on rate for a federal employee may be lower than the walk-on rate for other passengers, but advance bookings will not significantly lower the federal rate.
The owner of Adventures Unlimited Travel in Hartselle said his experience is, for travelers who book in advance, Huntsville is competitive with Birmingham and Nashville.
“Probably 99 percent of our customers travel out of Huntsville,” Fred Smith said. “Most of the time the fares are about the same as Birmingham and Nashville.”
When Birmingham fares are cheaper, Smith said, it usually is not by much.
“If someone wants to go to the trouble of driving to Birmingham to save $30, so be it,” Smith said. “Most figure it’s not worth the trouble.”
A recent downgrade of the Huntsville Madison County Airport Authority revenue bonds should not have any impact on the airport, Peek said.
Moody’s Investors Service downgraded $52.3 million in airport revenue bonds from A3 to A2 with a stable outlook. By comparison, Metropolitan Nashville Airport Authority is rated A3 with a positive outlook. The revenue bonds of Birmingham’s airport authority have the same rating as Huntsville’s.
“If we reissue new bonds, based on the rating we might have to pay a higher rate,” Peek said. “Right now, we’re not looking at issuing new bonds.”
Moody’s cited Huntsville’s high fares as one of the reasons for the downgrade.
Another recent hurdle for Huntsville International was the merger of two of its major carriers. On Thursday, AMR Corp. — parent of American Airlines, which is in bankruptcy — merged with US Airways Group.
American has flights from Huntsville to Chicago and Dallas. US Airways has flights to Charlotte, N.C., and Washington National Airport.
Neither American nor US Airways has announced how the merger — which is subject to regulatory approval — will affect flights.
Peek said the fact there is no overlap in the airlines’ destinations from Huntsville should prevent any direct impact on fares, although the combination would reduce competition nationally.
When Southwest and AirTran merged, Southwest said it would keep most AirTran flights. It ended up cutting most of the flights, including the flights from Huntsville.
“We’re a little skeptical,” Peek said of the American-US Airways merger. “After the last merger, they said they were going to keep the vast majority of the flights, but they didn’t. We’re watching this merger with a little trepidation.”
Contact Eric Fleischauer at 256-340-2435 or firstname.lastname@example.org.
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