Airlines today want their planes to be more like a van or a large SUV — they don’t necessarily care about the airplane being compact as long as it has as many seats as possible.
On average, airplanes had 106.5 seats per departure in 2015, compared to 95 in 2012, and airports have to make sure they can accommodate larger liners, said Skip Miller, executive director of Louisville Regional Airport Authority during Thursday’s Rotary Club of Louisville luncheon.
Every five years or so, the airline industry evolves, Miller said, and airports need to be ready to evolve with them. The Louisville Regional Airport Authority currently is investing roughly a $9.5 million to remodel the airport.
“About every five years, we reinvent the business,” he said.
The airport authority recently contracted Maryland-based restaurant company HMSHost and Atlanta-based retail company Paradies-Louisville II to revamp the food and retail options. The two companies collectively will invest another $8 million.
The renovations include the local restaurants such as The Comfy Cow and Coals Artisan Pizza as well as stores with local flavor such as the Kentucky Bourbon Trail gift shop and Distillery District Marketplace. The airport also is getting a Brooks Brothers store.
The aim of the upgrades is to show off Louisville’s character. “We are the front door of the community for people coming in,” he said.
After the seeing many other airline companies die off — Miller pointed out that only four of the airlines in operation in 1978 are around today — airlines are adapting to attract passengers, turn a profit and even give dividends to shareholders.
“Now, they worry about growing revenue just like the rest of us,” Miller said, adding that previous airlines cared more about market share, which didn’t necessarily translate to high profitability.
A major change is the de-bundling of services, with airlines offering fewer perks for less money. Customers now have the option of choosing their amenities such as on-board meals, extra leg room, preferred seating and prior security screenings to avoid potentially long TSA lines. The de-bundling has done wonders for airlines’ bottom lines, Miller said, noting that the industry pulled in $23.7 billion in revenue in the United States from such ancillary services.
The decline of fuel prices also has helped. Previously, fuel costs comprised 34 percent of airline companies’ expenditures. Now, it is 23 percent, according to Miller.
“That has helped profitability tremendously,” he said.
Airlines also are continuing to explore adding new flights, but it is difficult to find profitable ones, Miller said. “It’s like looking for a needle in a haystack because the business is very mature.”
The flights that leave the Louisville airport are nearly evenly split between Southwest Airlines, American Airlines and Delta Air Lines. The competition, Miller said, offers travelers out of Louisville lower than average fares and a choice of airlines.
Miller wasn’t hopeful that the city would necessary get flights to any new cities, but service is improving in other ways. Southwest Airlines is bringing in larger planes to fit more flyers; American Airlines is adding a nonstop flight to New York City. Miller also mentioned the possibility of having Saturday-only flights to popular vacation spots to accommodate vacation travelers.
The airport authority regularly checks in with airlines including smaller ones like Allegiant Air that offers cheap flights at Lexington and Cincinnati’s airports.
“We stay in contact with all the carriers. That’s just a matter of course, just to see if there is any opportunities to bring new carriers, new service in,” Miller said. “We do that every day. It’s just getting harder and harder to do that because there are fewer carriers.”
The airport offers 20 nonstop flights and one-stop flight to 176 destinations around the world. However, people regularly joked that the only way to get a direct flight out of Louisville is in a United Parcel Service box, and business leaders have raised concerns that the limited number of nonstop flights may hurt the city’s economic development efforts.
“You’ll never get everybody satisfied,” Miller said.