The airline industry is in a period of rapid change. The major airlines
had faced fierce competition from low fare carriers in many large
markets and then the COVID pandemic hit and basically shut down
the entire airline industry. The large airlines had been relying on
smaller regional airlines to serve the smaller markets. The regional
carriers are still converting their fleets from turboprops and small 50
seat regional jets to larger 90 to 150 seats and less frequency. This
trend could result in the loss of air service in some of the small, less
populous markets. Currently, there are nine airports in Minnesota
with commercial service: Minneapolis-St. Paul-(HUB), Duluth,
Rochester, St. Cloud, Bemidji, Brainerd, Chisholm-Hibbing,
International Falls, and Thief River Falls.
The Local Airline Service Action Committee (LASAC) was organized
in 1964. The purpose of this small but influential organization is to
promote airline service to small and medium size communities in
Minnesota. This group has provided congressional testimony for the
continuation of the Essential Air Service Program, encouraged marketing
plans for member airports, provided united support in negotiations
with airlines to retain flight schedules and services in the
remote areas of our state and represented important business needs
of those communities to national leaders.
Having a hub airline at MSP contributes to both the quantity and
quality of air service in Minnesota. Without it there would be fewer
flights overall and fewer destinations with nonstop service.
Worthington, Mankato, Fergus Falls and Fairmont lost commercial air
service to their community in the 1990s. Grand Rapids lost commercial
air service in 2003.
Understanding your Airports Air Service needs
One of the most important factors in evaluating the ability of a community
to support expanded air service is to understand how people
in a region use the air service that's available. No airport retains all of
the passengers that travel to and from its core market area. The single
most important piece of data an airport can understand is what share
of passengers traveling to and from the immediate region use its services
and what share drive to competing airports. Drive diversion or
passenger "leakage" studies statistically analyze passenger data,
determining just how many core market passengers use their local
airport, and how many drive to other airports. The overall market size
is critical in making the case that a region can support more service.
This type of data can figure out why passengers drive to other airports.
It could be lower fares or non-stop flight options.
Understanding your local Airports Air Service needs is critical. Air
services drives airport revenue sources and stimulates regional economic
development growth including visitor expenditures and tax
revenues. By providing new travel choices, increased competition,
greater convenience and possibly lower fares, new travel and economic
opportunities are generated for local businesses, residents and
visitors. While air carriers are continually looking for new routes to
serve, they do not always have the resources and local data to examine
all potential routes. Airports play a critical role in bringing new
route opportunities to the attention of carriers. In addition, the air
service development strategy forms the basis for coordinating stakeholder
support and ensuring that efforts and resources are focused
on those opportunities with the greatest potential for success. Air service
development is therefore a vital activity which should be at the
center of the strategic planning process for every airport.
Air Service Marketing Program MnDOT Aeronautics
Air Service Marketing legislation enacted in 1997 (State Statute
360.0151) provides assistance to those communities in obtaining or
enhancing scheduled air service. Funding for this program comes
out of the State Airport Fund. The fund started at $150,000.
Eight Greater Minnesota communities with commercial air service
are eligible to apply for a reimbursable Air Service Marketing Grant
which has an appropriation of up to $300,000 biennially. Eligible
expenses for reimbursement are advertising of air service, public
relations activities intended to educate the public on the value of the
airport and its commercial passenger air service, marketing studies,
and service improvement activities such as route analysis.
The marketing program may also be used to fund studies to determine
the feasibility of commercial air service.
Grants may not be used for an activity that promotes an airport within
the service area of another airport, a promotional activity that
features one specific air carrier at an airport when more than one
air carrier serves the airport, administrative costs associated with
the marketing program or with the routine operation of the airport,
or payments to air carriers as fare subsidies, service subsidies, or
seat guarantees.
Continuing Support
The Office of Aeronautics continues to work with airport sponsors
(i.e., the municipality, county, airport authority that owns the airport)
to provide technical and financial assistance for this Air Service
Marketing Program.
For more information contact: Rylan Juran, Planning Director, Rylan.
Juran@state.mn.us
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