by Kevin Carlson
Planning Program Coordinator – North Region
Minnesota Department of Transportation – Aviation
Published in Midwest Flyer Magazine December 2022/January 2023 Digital Issue
The airline industry is in a period of rapid change. The major airlines had faced fierce competition from low fare carriers in many large markets and then the COVID pandemic hit and basically shut down the entire airline industry. The large airlines had been relying on smaller regional airlines to serve the smaller markets. The regional carriers are still converting their fleets from turboprops and small 50-seat regional jets to larger 90 to 150 seats and less frequency. This trend could result in the loss of air service in some of the small, less populous markets. Currently, there are nine airports in Minnesota with commercial service: Minneapolis-St. Paul-(HUB), Duluth, Rochester, St. Cloud, Bemidji, Brainerd, Chisholm-Hibbing, International Falls, and Thief River Falls.
The Local Airline Service Action Committee (LASAC) was organized in 1964. The purpose of this small but influential organization is to promote airline service to small and medium size communities in Minnesota. This group has provided congressional testimony for the continuation of the Essential Air Service Program, encouraged marketing plans for member airports, provided united support in negotiations with airlines to retain flight schedules and services in the remote areas of our state, and represented important business needs of those communities to national leaders.
Having a hub airline at MSP contributes to both the quantity and quality of air service in Minnesota. Without it there would be fewer flights overall and fewer destinations with nonstop service.
Worthington, Mankato, Fergus Falls and Fairmont lost commercial air service to their community in the 1990s. Grand Rapids lost commercial air service in 2003.
Understanding Your Airports Air Service Needs
One of the most important factors in evaluating the ability of a community to support expanded air service is to understand how people in a region use the air service that’s available. No airport retains all the passengers that travel to and from its core market area. The single most important piece of data an airport can understand is what share of passengers traveling to and from the immediate region use its services and what share drive to competing airports. Drive diversion or passenger “leakage” studies, statistically analyze passenger data, determining just how many core market passengers use their local airport, and how many drive to other airports. The overall market size is critical in making the case that a region can support more service. This type of data can figure out why passengers drive to other airports. It could be lower fares or non-stop flight options.
Understanding your local Airports Air Service needs is critical. Air services drives airport revenue sources and stimulates regional economic development growth including visitor expenditures and tax revenues. By providing new travel choices, increased competition, greater convenience and possibly lower fares, new travel and economic opportunities are generated for local businesses, residents, and visitors. While air carriers are continually looking for new routes to serve, they do not always have the resources and local data to examine all potential routes. Airports play a critical role in bringing new route opportunities to the attention of carriers. In addition, the air service development strategy forms the basis for coordinating stakeholder support and ensuring that efforts and resources are focused on those opportunities with the greatest potential for success. Air service development is therefore a vital activity which should be at the center of the strategic planning process for every airport.
Air Service Marketing Program MnDOT Aeronautics
Air Service Marketing legislation enacted in 1997 (State Statute 360.0151) provides assistance to those communities in obtaining or enhancing scheduled air service. Funding for this program comes out of the State Airport Fund. The fund started at $150,000.
Eight Greater Minnesota communities with commercial air service are eligible to apply for a reimbursable Air Service Marketing Grant which has an appropriation of up to $300,000 biennially. Eligible expenses for reimbursement are advertising of air service, public relations activities intended to educate the public on the value of the airport and its commercial passenger air service, marketing studies, and service improvement activities such as route analysis.
The marketing program may also be used to fund studies to determine the feasibility of commercial air service.
Grants may not be used for an activity that promotes an airport within the service area of another airport, a promotional activity that features one specific air carrier at an airport when more than one air carrier serves the airport, administrative costs associated with the marketing program or with the routine operation of the airport, or payments to air carriers as fare subsidies, service subsidies, or seat guarantees.
Continuing Support
The Office of Aeronautics continues to work with airport sponsors (i.e., the municipality, county, airport authority that owns the airport) to provide technical and financial assistance for this Air Service Marketing Program.
For more information contact: Rylan Juran, Planning Director, Rylan.Juran@state.mn.us
