CID sets high mark at inaugural State of the Airport

The framework is erected for the rotunda section of a new 54,000-square-foot terminal addition at CID. PHOTO EASTERN IOWA AIRPORT

 

By Dave DeWitte
dave@corridorbusiness.com

CEDAR RAPIDS—The Eastern Iowa Airport (CID) is well-positioned to thrive in a rapidly changing travel landscape, air travel consultant Michael Boyd told attendees at the inaugural State of the Airport breakfast – although that’s unlikely to mean more airlines.

Mr. Boyd is president of Denver-based Boyd Group International, a leading aviation research and consulting firm that hosts the big International Aviation Forecast Summit each year. He said the airline industry has transformed “dramatically” over the past decade, with fewer but bigger aircraft and digital technologies reducing the need for business travel.

The U.S. airline industry has consolidated into just eight large-jet, full-schedule carriers, Mr. Boyd said. Commuter airlines have evaporated, and business models have been rebuilt around larger and more fuel efficient (per-passenger) jets due partly to a pilot shortage in recent years. Airline departures are down 9 percent nationally over the past decade, although seats are up 6 percent.

The result: An extremely limited number of new routes and service additions, even with more passengers flying.

“You have people saying, ‘get me more airlines in here!’” Mr. Boyd said at the May 23 event. “You can’t do it. There ain’t none.”

For airports that have good service, like CID, there are some definite bright spots in the trends. One of them is that passengers are willing to drive farther to airports where they can catch nonstop flights, bypassing smaller feeder airports because it can save them overall trip time.

That will mean challenges for smaller airports like those in Waterloo and Dubuque, Mr. Boyd said, but for CID it “means you can sleep at night.”

The lineup of airlines serving CID – United, American, Delta, Frontier and Allegiant – is a good one, Mr. Boyd said. The relatively balanced market share of the five carriers, with none dominating the market, bodes well for CID, he said, as does the high percentage of traffic through the airport that originates here.

“This is an airport in the right spot at the right time that’s doing the right things,” Mr. Boyd said.

The industry trends have airports competing fiercely for airline service, Mr. Boyd said. While they make it challenging for airports like CID to gain additional service, he said many airports within a few hours drive of a major airport with nonstop flights will be in a struggle to maintain passenger service at all.

With diminished competition, airlines are clearly in the driver’s seat. Mr. Boyd made light of the powerful lock the surviving airlines have on air travel by showing movie stills of a meeting of mafia dons from the movie “The Godfather.” On the positive side, he said, the era of industry consolidation and bankruptcies has come to an end.

Eastern Iowa Airport Director Marty Lenss urged attendees to support the airport through their patronage, pointing out CID’s huge economic impact. The most recent study found an annual economic impact of $451 million in 2017, up from $223 million in 2009.

“Remember, we all have a role in economic development, in community-building,” Mr. Lenss said.

Eastern Iowa Airport Commission Chairman David Yeoman said CID has 14 nonstop destinations and is adding options while other airports are reducing them. It is one of the few debt-free airports, is self-supporting and collects no local taxes.

CID ranks sixth in enplanements among airports in the central region of the United States, counting a record 1.14 million passengers in 2017. Mr. Lenss pointed to cost-per-enmplanement, a metric watched closely by airlines, as a good harbinger of future success. CID’s cost is $6.67 per enplanement, well below the national average of $8.20, making it more attractive to airlines to do business here.

Mr. Lenss said 2018 is off to an excellent start at CID, citing “numbers we have not seen throughout the history of the airport.” Among the projects that are positioning the airport for the future are a nearly 600-acre state-certified industrial site, which is awaiting its first new tenant, and a $60 million terminal renovation project.

The third phase of the renovation project underway is a 54,000-square-foot terminal addition, with a cost of more than $31 million. The project will create larger gate holding areas to go with the larger jets airlines are flying, and a post-screening area with more room for travelers to reassemble their apparel and belongings after going through security.

It will also expand concession and dining options, including the first full-menu restaurant availability. A rooftop patio will provide travelers with a place to enjoy a cold drink in the sunshine.

About 150 attended the breakfast event in the Alliant Energy hangar, asking pointed questions such as when fee-hungry airlines will begin to work on improving the customer experience.

“Just as soon as hell freezes over,” Mr. Boyd said, not entirely joking. He said the industry is pushing fee income revenue “because they can,” and called some of the high fees on things like reservation changes “ridiculous.” He defended customer service overall, however, particularly coming to the defense of Allegiant, which he said has been unfairly attacked in media reports over safety and service issues.

Mr. Lenss said CID is playing a bigger role to try to improve customer experience by working more closely with airlines through its Guest Services staff.

“We no longer look at it as a single-silo guest experience, like it’s United’s issue or American’s issue,” he said. “We’re taking a lot more direct ownership in that guest experience.”