Like many area travelers, Crystal Wallin likes the ease and convenience of catching a flight at the La Crosse airport.
A paramedic from Prairie du Chien who flies about three times a year for vacation or to visit family, Wallin said she usually ends up going to Madison for cheaper fares, though she dreads the two hour drive home when she returns.
She’d gladly pay an extra $100 to fly from La Crosse but balks when the difference is $200, especially when her husband and any of their six kids are coming along.
“We would love to fly out of there more often,” Wallin said. “But the cost is just ridiculous.”
She’s not alone.
Despite the local availability of commercial service to three major cities, more than half of the region’s travelers choose to fly from Minneapolis.
As more travelers chase the allure of cheaper fares at big cities like Minneapolis and Milwaukee, passenger numbers continue to slide in small airports like La Crosse, which struggle to attract and maintain good commercial service, a vital component of economic development.
But industry experts say if passengers don’t use the existing service, they could lose it.
Acutely aware of the situation, the recently renamed La Crosse Regional Airport is launching a marketing campaign designed to lure travelers with the promise of convenience and a better understanding of the true costs of travel.
Higher profits, fewer flights
Commercial air service in the United States has changed drastically since 2007, when industry executives shifted their focus from market share to profitability, said William Swelbar, a research engineer with MIT’s International Center for Air Transportation.
In the wake of the 1978 deregulation, airlines scrambled to add capacity, operating from a mindset that they needed to be number one or two in a market to make money.
That worked when oil was cheap, Swelbar said, but since 2004 jet fuel prices have risen five-fold.
At the same time, the growth of low-cost carriers and the advent of online comparison shopping put downward pressure on fares.
“Price became king,” Swelbar said, and ultimately most markets can’t support three profitable competitors.
As a result, airlines have practiced what the industry refers to as “capacity discipline” — in other words, cutting flights and flying airplanes with fewer empty seats.
Much of that was excess, but the cuts fell disproportionately on small and medium-sized airports, such as Madison and La Crosse.
Between 2007 and 2012, the years of greatest change, the nation’s 29 largest airports lost 8.8 percent of yearly scheduled flights, according to a study by MIT researchers. La Crosse, by comparison, lost 15 percent.
In terms of the percentage of available seats, La Crosse was hit three times as hard as Minneapolis.
While the consolidated and more efficient airlines have reaped profits even during tough economic times, Swelbar said there will likely be additional consolidation in the decade to come, and airports — like La Crosse — within driving distance of bigger hubs are in danger of losing service.
“To be brutally honest, we have an airport system that is a little too big,” he said. “There are 450 commercial airports trying to maintain their place on the airline map. Can all 450 be profitable? I would argue probably not.”
Despite losing 29 percent of the available seats over the past five years, La Crosse has fared better than other area airports like Eau Claire, which lost all commercial service after the merger of Northwest and Delta and now relies on a $1.7 million annual federal subsidy to support two flights a day to Chicago.
In 2005, the now-defunct Midwest Airlines ended service to and from Milwaukee, which sharply reduced the number of flights but had little immediate impact on passenger volume. Perhaps the greatest change came with the 2009 merger of Northwest Airlines and Delta, which resulted in loss of service to smaller cities like Eau Claire.
The merger brought positive and negative changes to La Crosse, with the loss of DC-9 jet service but the addition of seasonal flights to Detroit, which Delta uses for eastbound connections.
Still, passenger volume has been in steady decline since 2004, when 122,362 people caught commercial flights out. Last year that number was down to about 95,000.
This year in June, traditionally one of the busiest months, there were just 7,874 departures, down more than 20 percent from the same month in 2012.
Like Crystal Wallin, most of them are leaking into other markets.
A market survey showed 52.5 percent of the region’s travelers use the Minneapolis airport, while just 42 percent use La Crosse. About 5 percent fly in and out of Madison.
Suzanne Stika, a local travel agent and owner of Travel Professionals, has seen a marked decline in the number of travelers she sends out of La Crosse.
“There just aren’t as many flights,” she said.
Though owned and operated by the city of La Crosse, the airport has been self-sustaining since 2002.
Terminal rent and landing fees charged to the commercial airlines, parking fees and income from car rental services account for about 80 percent of the $2.5 million annual revenues. Capital improvements are paid for with a combination of state and federal grants as well as a $4.50 fee levied on air travelers.
A $1.1 million project this summer will spruce up the exterior of the terminal, and airport manager Clinton Torp hopes to tackle an interior remodeling next year to improve the layout and amenities, which already include free wireless internet and charging stations. Another project this summer will add automated gates to speed exit from the parking lots.
“For our size airport, customer service is key,” Torp said. “That’s what we’re starting to drive.”
The airport has a new name, which received final approval from the common council this week: La Crosse Regional Airport. That, along with a new streamlined logo, is part of a new campaign to market the airport’s service and convenience to some of the 426,000 estimated travelers who fly in and out of the region each year.
As airport manager, Torp is constantly courting airlines, but without the numbers, it’s a tough sell.
“If the community were to use the airport, that gives us the ability to bring in more service,” Torp said. Which, in the long run, could drive down ticket prices.
Boon for businesses
Having an airport in La Crosse is a valuable tool for economic development, said Vicki Markussen, executive director of the 7 Rivers Alliance. It’s a benefit that helps draw businesses to this region, and it’s a resource for existing companies engaging in corporate travel.
“It creates far more options,” Markussen said, but with more options comes the ability to shop around for competitive pricing.
Markussen said she’s heard from businesspeople who always choose to fly out of La Crosse as well as those who avoid the airport because of price and risk of flight cancellation. Historically, flights from La Crosse are more likely to be cancelled than those out of Milwaukee or Minneapolis, according to Bureau of Transportation Statistics data.
Dairyland Power Cooperative relies heavily on the La Crosse Regional Airport for quick, convenient business travel, said spokeswoman Katie Thomson, but if flight prices are lower at a neighboring airport, they won’t hesitate to chase a good deal. Dairyland employees booked 145 flights last year, about 70 percent of them from La Crosse.
Like anything else in business, coordinating corporate travel is about the numbers. Rick Diermeier, president of L.B. White Co., said his Onalaska-based company splits travel equally among the Minneapolis, La Crosse and Madison.
“It’s all about availability and price,” he said. “You’re just going to get more options out of Minneapolis and Madison.”
Data is not available on the ratio of business to leisure travelers flying in and out of La Crosse, but airlines depend heavily on revenue from business tickets.
“Business travel is critical for our size airport,” Torp said. “Our success is tied intrinsically with the local business community.”
La Crosse Mayor Tim Kabat said he has high hopes for the future of the airport as it ties into future economic development as the adjacent industrial park on French Island continues to grow and provide emerging opportunities.
“I think we’re on the right path,” he said. “(Torp) and his staff are very forward thinking.”
True cost of travel
A key component of the marketing effort is a battle against the perception that it’s cheaper to fly from Minneapolis.
Air fares vary wildly – depending on the date and time of travel and when the ticket is purchased. But on average, travel to Orlando from La Crosse cost an extra $60 compared to Minneapolis and $90 more than Milwaukee, according to fare data collected by the Bureau of Transportation Statistics.
For a single traveler – or even a couple – that could easily be eaten up with the cost of gas and parking. But with a family of four or five, the tradeoff becomes more nebulous.
“There’s more than just booking a ticket and paying the ticket price,” Torp said. “Give us a shot.”
Angie Duel said she prefers to fly out of La Crosse, but as a leisure traveler she often feels its too expensive.
She recently looked into booking a trip to Sarasota, Fla., and found flights from La Crosse were between $400 and $700, out of her price range.
There was a flight from Milwaukee for less than $250, but it was an early morning departure, which would mean probably staying overnight in a motel and made the total cost fairly close.
“My goal is to fly out of La Crosse,” she said. “I don’t want to drive three to four hours and wait.”
Shopping for the lowest airfare has become almost a game, said Charity Speich, airport manager for Eau Claire’s Chippewa Valley Regional Airport.
“They spend $50 traveling somewhere to save $20 on airfare,” she said. “They don’t put value on their time.”
A traveler can be productive – making calls or checking email – in ways not possible while driving.
Airports can’t control flight prices, nor can they control flight schedules.
What it can offer is convenience. In La Crosse, you can park 30 feet from the terminal – for just $5 a day – and breeze through check-in and security without the 45-minute waits common at big hubs like Minneapolis.
Use it or lose it?
Without better service and lower prices, travelers aren’t likely to use an airport.
“It’s kind of a chicken-and-egg scenario,” said Speich. “You can’t get more service without people using the facility.”
The key for keeping service in La Crosse is for travelers to use it, said George Hamlin, an aviation consultant based in Fairfax, Va.
“Getting it back in the future won’t be an option.”
But that requires customers willing to pay a premium, which goes against human nature.
“Everyone would like their next door neighbor to use the service from La Crosse while they go to Milwaukee,” Hamlin said. “I’m going to get the lowest cost for myself. What happens when you do that is you lose it.”
With the airline industry trending toward consolidation of domestic flights and reduction of services at small regional airports, a market has emerged for bargain airlines that offer direct flights from small airports to popular vacation destinations.
Las Vegas-based Allegiant Air has been on an aggressive growth path since 2001, said marketing manager Brian Davis. It’s been profitable for the past 42 quarters and consistently fills its flights to 90 percent capacity.
“We’re making (the airports we serve) accessible to a whole new slice of the community,” Davis said. “We make it possible for people to take a new trip – one that otherwise wouldn’t be available to them.”
The closest place to catch an Allegiant flight is in Rochester, Minn., where the airline introduced service to Phoenix-Mesa last fall. It’s too early to tell how the flight will impact passenger volume there, Davis said, but Allegiant has a history of attracting new travelers to its markets.
The impact was dramatic in Rockford Ill, which saw an increase in passenger volume of nearly 4,000 percent after Allegiant began offering flights.
Could Allegiant bring its model to the La Crosse Regional Airport? Many factors go into play, Davis said, including size and demographics of the local community, historic travel patterns and isolation from other reasonable service.
Four of the top ten domestic destinations for La Crosse passengers are cities that Allegiant serves: Phoenix, Las Vegas, Orlando and Los Angeles. In fact, Torp has met with Allegiant on several occasions since 2008, but that doesn’t mean the carrier is coming to La Crosse any time soon.
“Of course, we would welcome any new service,” he said. “But it’s a slow process.”
Travelers said they too would welcome the addition of service like Allegiant.
“If there was something like that in La Crosse it would be a booming business,” Wallin said. “The customers are there. They just have to be picked.”