America Airlines – The Fate of Aviation Deserts in 2021
The economic pain and threatened futures of many small cities is a reality that existed prior to the pandemic. These areas suffered population declines and blows to their manufacturing base, driven by shifts to China and the other countries in the Far East, long before Covid-19. The Conversation noted grimly in 2019, “Small and medium-sized urban areas—and the rural counties that are linked to them—are left with transportation, public works, housing and commercial bases that they struggle to maintain. Inevitably, blight ensues.”
Cuts from the pandemic, despite the CARES program, are adding to the ongoing burden of pain. In June, more than 75 cities were impacted by full or partial cutbacks from the major carriers. Since, a few have been added back, such as Stillwater, Okla., where American Airlines announced the city’s lifeline would be not severed in September. An activated local community that rallied together to pressure federal and state officials, and the airline itself, made the difference.
Not every abandoned city has been as fortunate. American recently announced that cuts to New Haven, Conn., Stewart Airport North of New York City, and Williamsport Regional Airport in central Pennsylvania will be permanent. You know the cuts are broad when they impact the home of both Yale University and the Little League World Series.
There are a few bright spots. For example, Southwest is adding flights to cities including Santa Barbara and Palm Springs—but as USA Today noted, they are designed to appeal to pandemic vacationers, not the business travel that these smaller cities rely on.
Not Coming Back Fast
Commercial airlines will continue to be under financial pressure for a long time, and the macro forces that were hollowing out small and midsize towns prior to Covid-19 will continue. Private aviation, with its ability to bring key business leaders to and from anywhere in America, will play a role in keeping these cities connected to the world. But these smaller cities will require both private and commercial flights to keep them competitive in the national economy.
Inspired and creative local leadership will be critical, and the good news is it’s already happening. Stillwater is a good example. Plus, a surprising number of big companies are still headquartered in small towns, including Hormel (Austin, Minn.); Dick’s Sporting Goods (Binghamton, N.Y.) and CVS (Woonsocket, R.I.). These companies have deep local roots, and their leadership has a strong commitment the community—valuing the work/life balance that smaller cities enable.
But innovation is needed to keep these cities connected to the national aviation experience, and we predict developments like these in 2021 and beyond to keep them vital:
• Mayors will become more active:Roswell, N.M., was on chopping block for commercial service, but Mayor Dennis Kintigh negotiated a financial agreement to keep some reduced service.
• Tax breaks and other incentives: Reduced landing fees and other incentives will be offered to entice commercial airlines to add smaller markets back to their route maps. Funding from local businesses along with state and city funding will be used for this purpose, which is essentially no different than Industrial Revenue Bonds and other financial instruments used to attract businesses.
• Subscription model pricing: Local companies will join together and purchase annual flight subscriptions to guarantee a set level of volume to airlines, making it economically viable to open these smaller cities. If 15 companies in New Haven or Dubuque join together to buy sufficient number of air miles, that predictability would change the game.
• Leveraging social media: Until now, cities have acted largely individually to exert pressure on the airlines: the Stillwater example. But imagine if 75 cities, all injured or abandoned by cutbacks, worked together to make their voices heard.
Lastly, small cities will have a friend in Transportation Secretary Pete Buttigieg, the former mayor of South Bend, Ind. population 101,000. And perhaps in a president from Scranton, Penn., current population 76,289—down from 143,400 in 1930. What more needs to be said about why small cities need to thrive?