Grounded? | Direct Air's woes cast doubt on future of commercial flight in Worcester
When Direct Air suddenly and rather haphazardly cancelled all its flights last month, and then filed for bankruptcy protection, it left travelers scurrying to figure out alternate plans and worrying about whether they'd get their money back. For Worcester Regional Airport, it raised other questions: Can commercial air travel succeed in Worcester? And, does it really matter if it can't.
Robert Mann, president of airline industry analyst R.W. Mann & Co. Inc., said the first thing to remember about Direct Air is that its name is deceiving. It's not an airline but a marketing company that sells tickets and contracts with actual operators to fly them.
"Assuming you charge at least what it costs to operate, it is actually a pretty good business model," Mann said.
But Mann said Direct Air, not the airlines it contracted with, probably took responsibility for increases in fuel prices. If it didn't hedge against rising oil prices, it could easily have run it into the ground.
Another industry analyst, Robert Herbst of AirlineFinancials.com, said fuel costs are a particular problem for flights running from small airports because they're typically short trips. That means planes spend a large part of each flight on the fuel-intensive takeoff and landing.
"Small airports and the small airlines serving them are going away," Herbst said. "It's just too expensive to operate."
Security And Small Airports
Herbst said another consideration is security standards, which have increased in recent years and become difficult for smaller airports to handle.
Still, there's no doubt many in the Worcester area long for reliable commercial flights from the local airport. Many remember a decade ago, when US Airways Express, Pan Am, Delta Connection and American Eagle all ran flights out of Worcester, at least briefly.
Tina Sullivan of Sullivan Travel in Worcester said her agency didn't work with Direct Air, but she would love to be able to sell tickets from a bigger carrier again.
Beth Rossi, a travel consultant with Worcester's Rosenlund Travel, echoed that sentiment. She said she'd like to see a major airline fly from Worcester. Rossi said she thinks Direct Air, which offered tickets inconsistently, made it difficult for anyone else to operate on a more consistent basis by siphoning off passengers.
"I think there is a demand for flights out of Worcester," she said. "I really do."
Airport Chief: Demand Is There
Andrew Davis, director of the Worcester Regional Airport, said Direct Air's growth over the past two years demonstrates that demand. In 2010, the airport reported, the company transported 71,014 people. In 2011, the number rose to 107,434.
Still, Davis said he doesn't know whether another carrier will want to try to pick up that business. He said he's been communicating constantly with airlines that might be interested in the airport, even before Direct Air cancelled its flights until May 15. There's potential in both small carriers offering direct flights to leisure destinations, as Direct Air did, and those offering hub-and-spoke service to big cities like New York, Washington, D.C., and Chicago, he said.
Bijan Vasigh, professor of air transportation at Embry-Riddle Aeronautical University in Florida, said any airline offering service from a small airport like Worcester would be taking a gamble. The demand for flights from these airports is particularly elastic, he said, because the typical passenger can easily decide not to bother with a trip, or find alternate transportation. Flights between large cities are more likely to attract passengers even if ticket prices rise dramatically, he said.
The Fuel Price Factor
Still, Jenkins said, airlines might not have to price their flights quite as high in the future if fuel prices stabilize. And he said they might, since oil is now expensive enough that consumption is falling considerably.
"I'm hopeful that the price of fuel has reached its peak," he said.
If leisure flights are particularly subject to the oil market, Herbst said other parts of the industry appear unaffected. He said some airports have successfully turned away from passenger flights to focus on freight, and businesses are doing more flying on corporate jets or chartered flights.
Certainly, the brightest spot in Worcester Regional's situation doesn't seem to be commercial flights. Rectrix, a Bedford-based firm, is planning a $5 million aircraft hangar to accommodate corporate jets, and it's also offering air taxi service and making the airport the home base of its maintenance operations. Davis said that's likely to draw all sorts of new airport users and will also provide jobs for pilots, mechanics and other highly paid professionals.
"That's a nice injection of salary dollars and operations dollars," Davis said. "We're a viable airport."
(CORRECTION: The original version of this story incorrectly identified Bijan Vasigh as the professor of air transportation at Embry-Riddle Aeronautical University in Florida.)
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