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Air Service Quality in the U.S. Has Fallen by an Average of 7% since 2007

Since 2007, there have been seismic shifts in the airline industry in the United States. The US has gone from six network carriers to three. Southwest merged with Airtran. Ultra Low Cost Carriers –Allegiant, Frontier and Spirit—have become more prominent. But what has happened to air service? Are specific communities better off or worse off?

Here’s our view. Every community has an interest in having better connectivity to major commercial cities in the US and overseas where much of the world’s GDP is either produced or managed. This includes capitals and major financial and industrial centers.  For example, almost a quarter of the US economy is accounted for by the federal government, which is managed in Washington DC. Every community in the US has an important interest in having easy commercial connections to Washington. Similarly, every community has an interest in access to New York, Los Angeles, Chicago and other major commercial centers which produce a large portion of the nation’s wealth and manage many private enterprises. The same logic applies to London, Shanghai or Paris.

So we have developed a metric that measures each US community’s quality of air service to places that matter. We measure the quality of service (considering frequency, number of stops, online vs. interline-alliance service, and aircraft type) to 100 airports (the top 50 domestic and the top 50 international, as measured by number of non-stop seats), weighted by the relative economic output of the destinations.

We found that there is a very tight relationship between each US community’s quality of air service and the size of its economy. It is generally true that a US city with higher GDP also has better quality air service. But some cities do much better than expected while others do much worse. Exhibit 1 shows the results of the GRA Air Service Index (GRASi) for selected cities in 2014.

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Times, They are A-Changin’:
New GRA Service Index Quantifies the Evolution of U.S. Airport Connectivity

Just as the aviation industry was headed toward recovery after its plunge following 9/11, the 2008 financial crisis hit, sparking additional dramatic change in the industry.  Airline consolidation resulted in hub closures and flight reductions at many airports. Capacity discipline practices changed the landscape of airline services at airports across the country. Between 2006 and 2009, the number of available seats at U.S. airports dropped by 11 percent and the number of flights fell 13 percent.

Air service is more than just flights and seats. It’s about connecting to major centers of domestic and international activity.

Since then, flights have continued to decline slightly while seats have increased modestly. But these aggregated numbers don’t tell the full story of what matters to passengers – how the air travel options and cost to get to where they want to go have been impacted.

At GRA, Incorporated, we are developing tools that go beyond standard analyses of changes in the number of airline seats and flights. These tools reveal how the relative economic connectedness of U.S. airports has changed since 2006. Greater connectivity means more opportunities – for airports, for businesses, for air travelers and for local economies.  The GRA Service Index (GRASI) we’ve developed allows airports, airlines, passengers, businesses and local government leaders to assess what is happening to the air service available at individual airports and to evaluate how they are performing in terms of connectivity relative to similar airports.

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