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Airline cuts may hurt local tourism

The Arizona Republic

The Arizona Republic

PHOENIX – Airline flight cuts and higher airfares this fall will bring fewer visitors to Arizona, delivering a punishing one-two punch to the state’s limping economy.

In Phoenix, more than 1 of 10 flights are gone from a year ago. Nearly 70 daily departures have disappeared from Sky Harbor International Airport’s schedule, the equivalent of losing service from almost every major airline except US Airways and Southwest.

Fewer seats for sale means airlines can charge more. Tickets for Phoenix flights departing in October are up an average 28 percent from a year ago, according to Farecast.live.com. Flights to Boston and Chicago are each up 50 percent. In a tourism hotbed where the majority of visitors arrive by plane, fewer flights and higher fares mean fewer customers for hotels, restaurants, spas and golf courses.

At risk is a substantial slice of $19 billion in annual visitor spending in Arizona.

This comes after months of reduced numbers in hotel occupancy and airport traffic as people struggle with a plunging stock market, the housing meltdown and other economic woes.

“We know we’re in for a period of some rough times,” said Steve Moore, chief executive officer of the Greater Phoenix Convention and Visitors Bureau.

Airlines are trying to find their footing against soaring fuel prices. When oil was near its peak of $147 a barrel this summer, US Airways said its fuel bill was running $2 billion a year higher.

The flight cutbacks, which began after Labor Day, are designed to cut airlines costs and force fares higher. The size of the cuts vary by airline and airport, with a handful of carriers slashing 10 percent or more of their U.S. seats this fall.

US Airways CEO Doug Parker said these flight reductions are permanent as the industry adjusts to the likely reality of permanently higher oil prices. Prices have retreated below $100 since summer, but the airline’s fuel bill is still running $1.6 billion higher than a year ago.

The fallout for Phoenix, where US Airways is the busiest carrier is 11 percent fewer seats overall, slightly above the national average for airports.

The bulk of the cuts are in the frequency of flights between cities. It will still be possible to fly to most places, but with fewer choices and higher fares.

US Airways dropped six daily flights to Las Vegas, four to San Diego and three to Tucson. Southwest, whose cutbacks are about half the norm in Phoenix, also trimmed flights to Las Vegas and other cities in addition to dropping Birmingham, Ala., and Little Rock, Ark.

Sky Harbor traffic, already down each month this year but one, is projected to sink.

By the end of 2009, airport officials see passenger totals down 10 to 15 percent from last year’s peak of 21 million round-trip passengers.

The impact of fewer visitors, or visitors who stay for shorter periods, can cascade across the economy. Grand Canyon attractions, resorts and restaurants, and those who do business with them all would feel a pinch.

Tucson has lost about one-fifth of its airline seats, ranking it 11th nationally in terms of percentage of flights dropped, according to an analysis by consulting firm LECG. The city has gone from a peak of 89 daily departures last year to 66 and is left without nonstop service to the East Coast beyond Atlanta.

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