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Aviation Industry

U.S. airlines reduced Caribbean capacity by 10% in December

02/01/2018

With portions of the Caribbean still struggling to recover from massive hits by hurricanes Irma and Maria in September, U.S.-based airlines flew nearly 10% fewer seats to the region in December than they had a year earlier.

Still, the factors that airlines consider when deciding how much to pare down service to islands and other locales that are reeling from national disasters go well beyond merely dollars-and-cents considerations, industry sources said.

“From the standpoint of airlines, they take the long view,” said aviation industry analyst Bob Mann of R.W. Mann & Co. “They have employees in the island. Those employees have families. The airlines have an infrastructure in the island. They have account relations in the island. You just wouldn’t walk away from that. It’s part of the social contract. It’s not just wretched capitalism.”

According to the airline data analytics company OAG, the most-damaged Caribbean islands are all experiencing substantial drops in airlift this winter. Capacity to Puerto Rico was down 28.2% year over year in December. In the U.S. Virgin Islands, it was down 47.2%. Dutch St. Maarten, where the airport has been forced to move into temporary facilities while the terminal is rebuilt, saw a decrease of 62.4%.

Other affected destinations, including St. Barts, Anguilla, St. Kitts and Nevis and the British Virgin Islands saw air service declines of between 11.6% and 32.8%.

OAG said it expects similar types of numbers in January and February.

Among specific airlines, American and JetBlue, the two largest U.S. carriers in the Caribbean market, flew 15% and 11.8% less capacity, respectively, year over year to the Caribbean in December. Delta’s capacity was down 17.1%, United’s was down 25.7% and Spirit flew 25% fewer Caribbean seats.

One exception to the trend was Southwest, whose Caribbean capacity was up 16.6%. The carrier has been broadening its Caribbean service since moving into the international market in 2014.

The storms and subsequent drop in service to affected markets have had a less consistent impact on prices. According to Hopper, an app that tracks airfares for price-conscious shoppers, fares out of the U.S. market were down 22.3% during the Dec. 16 to 25 holiday period for San Juan and down 23% for St. Croix, for example. But prices to St. Thomas were up 26.6%, and prices to St. Maarten were 36.9% higher.

Hopper measures prices based on what a traveler buying airfare that is cheaper than the fares purchased by 90% of travelers would pay.

Mann noted that during the period when a destination is rebuilding from a hurricane, the nature of its travelers changes. Tourists make up a smaller portion of the market share, while higher-price-point business travelers, notably contractors, make up a larger portion of the market. Capacity reductions can also serve to drive up an airline’s yield, even when flying to a storm-ravaged destination.

Eric Zipkin, who owns the small operator Tradewind Aviation along with brother David, said that in the immediate aftermath of Irma and Maria, the publicly owned U.S. airlines responded to strong shareholder pressure to cut capacity to affected islands. But shortly thereafter, they began adding it back, he said.

Tradewind has made similar calculations. The carrier typically flies as many as 40 to 50 frequencies during the winter months from its Caribbean base in San Juan to St. Barts, Antigua, Nevis and Anguilla using eight-seater Pilatus PC-12 aircraft. This year Tradewind had hoped for a boost from a codeshare agreement on the St. Barts, Antigua and Nevis routes that it entered into with United in October…

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Fuente: http://www.travelweekly.com/Travel-News/Airline-News/US-airlines-reduced-Caribbean-capacity-10-percent-in-December

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