December 25, 2024
Editorial

CLOUDS IN THE FRIENDLY SKIES

Although there will be widespread ripple effects from the bankruptcies of Delta Air Lines Inc. and Northwest Airlines Corp., few of them are likely to be felt here. Bangor, thanks to the growth of regional jets and above average increases in passengers, is a healthy market, according to industry analysts. The problems, if there are any, are likely to come in cities where passengers from Bangor connect to flights to other destinations.

“They are total nonevents for Bangor,” said Michael Boyd, an aviation consultant based in Colorado. The reason is that the two airlines, and the other major carriers, need

the passengers that small cities like Bangor feed into the system.

In fact, Mr. Boyd, head of The Boyd Group, predicted in a recent report that Bangor will have the largest percentage growth in passengers in the next four years. BIA will have seen a 32 percent increase in passenger boardings, edging out Boston’s Logan Airport for the largest increase. Mr. Boyd is bullish on Bangor because of its stable economy, population growth and the airport’s aggressive pursuit of new markets.

Prior to Wednesday’s bankruptcy court filings, Delta and Northwest, both of which serve Bangor, have long sought to cut costs. If flights out of Bangor weren’t cost-effective, they would have been cut long ago, according Bob Ziegelaar, former director of Bangor International Airport.

One reason for Bangor’s good standing is the rise of regional jets, now the mainstay of BIA’s traffic. A decade ago, a major airline would likely use a small full-size jet to service small cities like Bangor. If the plane often flew only partially full, the airlines often deemed the route a money loser and cut it.

Regional jets, particularly since they come in varying sizes, ranging from 30 to more than 100 seats, can be tailored to specific markets, which benefits airports like BIA. Flying a smaller, full plane has taken on increased importance as fuel prices have risen sharply since the start of the year. Industry experts believe the spike in fuel prices after Hurricane Katrina pushed both airlines, which had been flirting with bankruptcy for months, over the edge.

Although Bangor is likely to see little impact, the factors that contributed to the rash of bankruptcy filings in the airline industry are troubling. A major problem is that customers expect cheap fares. Inflation-adjusted air fares have fallen 50 percent since 1978. At the same time, airline costs – especially pension liability – have grown substantially. The result is an unsustainable business model that has driven four of the country’s seven major airlines into Chapter 11 bankruptcy. United and U.S. Airways are both operating under bankruptcy protection as well.

The cheap tickets may come at a price. Delta, according to a BusinessWeek commentary, may dump $8.4 billion of its pension liabilities on federal taxpayers. Companies that provide services and aircraft to the two airlines are also likely to see their contracts downsized or nullified, putting non-airline employees out of work.

The good news is that the planes will keep flying in and out of Bangor. The bad new is that all taxpayers will foot part of the bill.


Have feedback? Want to know more? Send us ideas for follow-up stories.

comments for this post are closed

You may also like