The cost of flying might be going up, but this time it’s not the airlines raising prices.
The Obama administration has proposed raising the taxes on air travel by about $14 per flight, a move airlines strongly oppose.
Higher taxes are needed to help reduce the deficit, pay for improvements at the nation’s airports and add thousands of new immigration and customs officers to reduce wait times to process foreign visitors, the administration says.
Airlines say higher taxes will backfire and hurt the economy.
The airline industry took a decisive step toward greater concentration on Thursday with the announcement that American Airlines and US Airways had agreed to merge, forming the nation’s biggest airline. The merged airline, to be called American, leaves just three major carriers — Delta Air Lines and United Airlines too — able to offer extensive domestic and international service, a sharp contraction over the last decade.
But while airline executives argue that mergers are good for passengers because they bring more service to more destinations, some economists and consumer advocates warn that all this consolidation comes at a price for travelers.
With fewer carriers, passengers have fewer options; fares and fees are now more likely to go up, particularly for flights between midsize cities. And more cities, especially smaller ones, can expect to see further reductions in service.
“It’s much easier to have tacit collusion with just three airlines,” said George Hoffer, a transportation economist at the University of Richmond. “It’s not illegal. But it’s like having a few big people in a small boat. Anyone’s decisions tie you all together.”
The authority that runs the cash-strapped and passenger-starved airport Tuesday endorsed a $5 million plan to add a U.S. Customs station that would allow LVIA to have flights out of the country as early as 2014.
Embarking on a multimillion-dollar project will not be easy for the struggling airport. But the Lehigh-Northampton Airport Authority supported a plan to accept a $1.5 million state grant and take out loans for $3.5 million to build an inspection station.
The board believes the station will keep thousands of fliers a year from using other airports to go to places like Cancun, San Juan and Montego Bay.
More than 100 U.S. airports, including Wilkes-Barre/Scranton International, are in jeopardy of losing their air traffic control service – forcing their closure – under automatic federal spending cuts set to take effect Jan. 2, according to a Center for American Progress study.
Under the potential across-the-board budget cuts, or sequestration, the Federal Aviation Administration would be required to slash an estimated $1.35 billion, or approximately 9 percent, from its annual budget for each of the next 10 years, starting in January, to reduce the nation’s deficit, according to the study.
In order to decrease its expenditures, the administration may choose to restrict flights nationwide – from 70,000 to 62,000 per year – said Scott Lilly, a CAP senior writer and the author of the study.
Visitors to Pittsburgh International Airport can be forgiven for thinking, at certain times, that they wandered into an aviation ghost town. Where once US Airways alone operated more than 500 daily flights into Pittsburgh, the airport is now left with an average of 139 non-stops a day for all airlines.
There’s no question the airport needs more flights and the people who take them — and that makes the news that PeoplExpress is reviving an old brand and is eying a presence in Pittsburgh especially encouraging.
Milwaukee was one of the cities Mr. Fitzgerald — and others in the region — targeted for nonstop service after he took office in January. He has vowed to work to bring more service to Pittsburgh International, which has lost hundreds of flights over the last decade as a result of US Airways cutbacks.
But now Delta is trying something never tried: operating hubs at two New York airports, LaGuardia and Kennedy, a dozen miles apart. The carrier said Friday that by summer, it will build its LaGuardia operations into a hub providing 264 daily departures to more than 60 cities. They include competitors’ hubs in Charlotte, N.C., Dallas, Houston, and Miami; key destinations in upstate New York; and small cities such as Wilmington, N.C.
The move represents Delta’s effort to use 132 LaGuardia slots, just acquired in a trade with US Airways(LCC) , to establish itself as the primary airline in the world’s biggest travel market. The slots will enable it to add 100 flights and 26 destinations.
Harrisburg International Airport (HIA) is doing well and traffic is up. With the price of fuel, many airlines are looking at the cost-effectiveness of their 50 passenger regional jet fleets. With todays fuel prices it has become more cost-effective to fly larger planes. Fortunately, HIA is equipped to handle larger planes.
There are 1.8 million people within an hour of HIA which makes this a sizable market. Because of this, many carriers flying into the HIA will simply start using larger planes.
Delta has seen at 50 percent increase in traffic on their DFW to HIA route due to the Marcellus Shale gas industry. Harrisburg is the hub of Pennsylvania’s state government and home to large companies like Hershey, which use air travel for business.
Airport officials are stating American Airlines bankruptcy filing will not impact travelers flying out of HIA. What American Airlines decides to do with its regional airlines will determine what the future holds for HIA, not the bankruptcy filing.
Smaller market airport like State College and Venango Regional will most likely be under scrutiny by airlines as they decide whether flying from these locations remains cost-effective. Can these smaller markets generate enough passengers to fill 70 – 100 seat planes? Time will tell.
Air travel is improving! Harrisburg International Airport (HIA) is projecting a 14% increase in passengers over last Christmas. Last month traffic was up 12% over November 2009 and year-to-date the airport has seen 7.3% increase in passengers.
Full body scans and pat-downs had no impact on air travel over Thanksgiving.
This may be a sign that the economy is getting a little better? Gulfstream International Airlines, a Florida based carrier is looking at restoring nonstop service between Harrisburg International Airport and Pittsburgh International Airport starting the first quarter of 2010. US Airways discontinued nonstop service between these two cities in September 2008.
Gulfstream is very anxious to restore service between Pittsburgh and Harrisburg and has been trying for months to make this happen. Lower fuel costs and working with the airport on fee reductions is making this possible.
Gulfstream is also looking at providing service to DuBois, PA, Columbus, OH and Indianapolis, IN.