Thursday, September 21, 2017

Passenger Traffic on Record Pace at Long Beach

The art deco main terminal at Long Beach, built in 1941

Located on the 405 Freeway, Long Beach Airport (LGB) sits in the middle of two major airports, John Wayne/Orange County (SNA) and Los Angeles International (LAX).  For the people near LGB, either SNA or LAX are a 30 minute drive away.  Because of that, the airport has struggled with airline service over the years.  However, its low fares and convenience have led to recent success and popularity.

The airport prospered in the 1980s after deregulation.  Most of the major airlines of the time served LGB; Alaska, America West, American, Continental, Delta, TWA, United, and US Air.  However, after industry consolidation, the debt-ridden airlines began to eliminate service and LGB was causality.  Through much of the 90s, America West was the only major airline serving LGB.
An American MD80 with 737-300s from Delta and United.   

A Continental 737-300 and Alaska MD80 at the terminal.

The 2000s became a transition period.  A start up East Coast airline, ‘low cost carrier,’ JetBlue, came to Long Beach with big plans creating a West Coast hub/focus city.  However, even during this time, the airport struggled.  American (which returned in 1997) challenged the City’s slot (the right to operate a flight - arrival/departure) allocation process to Jet Blue and was able to gain 8 slots and added 3 daily JFK flights.  Unfortunately, AA (the only major carrier not to file Chapter 11 after 9/11) was financially struggling and conceded most markets to Jet Blue, including LGB.  American discontinued LGB service in 2005 (Note - American is serving LGB again through the AA/US Airways merger).  Alaska, which returned to LGB in the early 2000s, decided to discontinue LGB service in 2013.  Jet Blue for several years, never used all their allocated slots, at times leaving up to eight slots vacant.  Despite a new award-winning concourse, passenger traffic declined over three consecutive years.

Everything changed in December of 2015, when then LGB Airport Director, Bryant Francis added nine slots to the 41 allocated, making way for 50 daily flights.    There is no doubt the City of Long Beach had been working with Southwest Airlines, however, when the Dallas based carrier applied for all nine LGB slots, many were caught off guard.  After reviewing all the requests, the city allocated the additional slots:  Southwest - four, Jet Blue - 3, Delta - two. 

Southwest began service in June 2016 with four daily flights to Oakland.  Under a provision in the City’s Ordinance, Southwest realized they could apply and use any unused slots, even if they were allocated to another carrier.  In September 2016, Southwest used three of JetBlue’s slots to add service to Las Vegas.  With the additional service, they offered seven daily flights.  With Southwest’s plan to use any vacant slots, that forced JetBlue’s hand to use their full slot allocation for the first time in several years.  They currently operate 35 daily flights.

The success of LGB is low fares.  With two major airports being within a 30 minutes drive, passengers tend to gravitate to the lowest fares.  The recent popularity of LGB is because of Jet Blue.  Instead of ‘hub connections’ like the carriers of the 80s, the establishment of a ‘focus city’ at LGB, has opened the door for low fares to 13 destinations in the West and around the country.  With the additional of Southwest, the original low cost carrier, the future of LGB should be solidified.

With 2017 being the first full year of operation of 50 flights, city officials project a record of 3.5 million passengers.  Through August 2017, roughly 2.5 million passengers have traveled through the airport.  Projecting a 15% increase of passengers, based on higher load factors and increased capacity, the number of passengers could be even higher at 3.7 million.  The previous high water mark was in 2012 at 3.2 million passengers.

The increase in traffic benefits everyone from airport vendors, such as restaurants, gift shops, taxis/shuttles, car rentals and others.  The hotel occupancy in Long Beach was reported at 81%, in June, 20% over the national average.  There is no question; there is a direct correlation between the increased flights and high occupancy rates at Long Beach hotels.

Though it is unlikely any more slots will be allocated in the near future, the growth may stagnate.  However, there is a silver lining.  There are 25 “commuter slots” available.  Commuter slots are defined as aircraft operating under 75,000 lbs maximum take-off weight.  This includes regional jets up to the CRJ-700.  Adding up to 25 commuter slots could bring the total passenger count up to 4.2 million.  

With Jet Blue’s low cost service, their loyal customer base, and the addition of the original low cost carrier, Southwest, complimented by two of the three major legacy carriers, American and Delta, Long Beach Airport’s future looks bright.  With the airport’s new concourse, the Long Beach Airport has combined the 1941 art deco main terminal, and resort style indoor/outdoor concourse lined with palm trees to rave reviews.