Regional airports above merger fray

In the movie "The World According to Garp," the moment a plane crashes into a house that is for sale, Garp vows he'll buy the cratered building. "It's been pre-disastered," he proclaims. What are the odds another plane will hit the house?

That attitude may apply to regional airport officials pondering the consequences of a Delta-Northwest merger. In a sense, many of these airports, from Rochester to Duluth and Aberdeen to Minot, have been pre-disastered. For them, the era of bare-bones service arrived years ago.

So even if Northwest Airlines' planned merger with Delta Air Lines erodes service further, future cutbacks may seem minor compared with the past, experts say.

They say the ability of large carriers to enforce price increases in small markets and carry those passengers to hubs dominated by the likes of Northwest and Delta could overshadow the temptation to pare costs by further cutting small-town service.

"Regional air service is now valuable for network carriers, as it feeds their hubs and international services with relatively little low-cost carrier competition," according to airline analyst Patrick Murphy.

A partner in Gerchick-Murphy Associates, a Washington-based airline consulting firm, Murphy is not alone in that opinion.

"Nobody wants to run away from these cities," said Bill Swelbar, an airline analyst at the Massachusetts Institute of Technology. "It's about figuring out how to sustain the service at $100 [a barrel] oil."

That calculation has changed in recent years. At regional airports, fares are up and choices are down.

"The 50-seat regional jet was supposed to be kind of the savior, working well for regional airports," said Brian Ryks, director of the Duluth International Airport. "Now, with fuel costs the way they are, they've become uneconomical to operate."

The number of airline seats flying out of the airport are down by thousands a month in the past three years, but passengers are flying shoulder-to-shoulder, Ryks said. In early 2008, Duluth shattered all records for passenger count, he said.

Rochester International Airport has experienced the same phenomenon: passenger traffic up, total available seats down. Nevertheless, Rochester airport manager Steven Leqve hopes that a Northwest merger with Delta would result in more connections to the outside world -- particularly to the Southeast and West.

William Towle, director of the St. Cloud regional airport, said he doesn't expect any Delta-Northwest merger to be completed before the end of this year, and said that he believes regional airports may have until 2010 to learn their fates from a possibly combined carrier.

"They'll have so much on their plate that they may not even think about the regionals for another year," Towle said.

Meanwhile, some regional airports have bucked the trend in declining air service.

South Dakota's Rapid City Regional Airport had nearly 32,000 seats flying out in January -- roughly triple the number of four years earlier.

Exactly why that is happening at the Rapid City airport is, in part, a mystery to Mason Short, airport executive director. He notes that, in the past two years, fares have been rising -- and so has passenger traffic.

Overall in Minnesota and the Dakotas, the number of seats out of regional airports is down in the range of 15 to 50 percent from the late 1990s or earlier in this decade, according to statistics from the U.S. Department of Transportation (DOT).

But mergers are not to blame.

"There are things in life that actually are not related to mergers," airline analyst Adam Pilarski said. Among them is the decline of airline service at regional airports, a trend that Pilarski and many other experts believe has run its course at most airports beyond big cities.

The number of scheduled airline seats flying out of small communities fell as Northwest and other carriers switched to smaller planes and fewer flights to cut costs.

To be sure, it's possible that a combined Northwest and Delta could cut flights to some areas.

But the economic forces driving airline mergers already have claimed hundreds of thousands of seats at regional airports around the nation. Many analysts say airlines already have cut as much as they dare without harming big-city hub traffic fed by smaller cities.

"You lose a lot when you begin to pare a hub down," said Ernie Arvai, an airline analyst in Windham, N.H.

Continental Airlines and American Airlines said they would pare regional jet service in the last few months of this year, but neither has embarked on a merger. Northwest initiated another round of cutbacks -- including service reductions at some large airports -- before the announced deal with Delta.

Carriers were flying a combined 1.7 million seats out of Minneapolis-St. Paul International Airport in January, down nearly 300,000 seats from early 2004, DOT figures show.

Service cuts can go beyond trims. Four years ago, Northwest dropped service to Grand Rapids, Minn., where 6,400 people a year had flown on Mesaba Airlines, an affiliate regional carrier. Mesaba filed for bankruptcy protection from creditors in 2004, a year before Northwest did the same.

In an age of airline alliances, what a merged carrier will do isn't much different from the choices made by competitors, said airline analyst Michael Boyd, who runs a consulting firm outside Denver. "Thirty-six airports today only have service from NWA or Delta," Boyd said. "We don't see any of those losing any service, because the fleet isn't going to change."

Murphy sounds even more sanguine. "Regional services are likely to prove more stable than in the past," he said.

But stability has a price.

At Bemidji Regional Airport, walk-up fares to the Twin Cities have hit as much as $1,000, airport manager Harold Van Leeuwen Jr. said. About 4,500 seats a month fly out of Bemidji, less than half the peak of the 1990s, but the planes often are full, he said.

Mike Meyers • 612-673-1746