On Oct. 29, the U.S. Department of Transportation’s (USDOT’s) Bureau of Transportation Statistics released a report that showed that average domestic airfares in the second quarter of 2008 reached their highest level for any quarter in the 13 years measured by available data. The average domestic itinerary fare in the second quarter was $352, exceeding the previous high of $342 set in 2006.

With the upcoming holiday travel season still weeks out, many airlines have already started offering reduced fares. And in the next few weeks if the airlines are seeing advanced ticket sales slumping, more “sweetheart” deals may be offered.

However, with the volatility of the financial markets and in the price of oil, Mississippi’s airports are taking a cautious view of the upcoming holiday travel season. All they can do is watch and wait.

Too early to tell

Dirk Vanderleest, CEO of the Jackson Municipal Airport Authority, said at press time it was difficult to predict what the volume of travelers may be at state airports this holiday season.

“It’s just way too early to tell,” Vanderleest said.

He added that one huge factor in the forecast will be the price of gasoline. As pump prices rise, more travelers look toward the air. When it falls, driving becomes a more attractive alternative. Thus, the recent drastic decline in the price of gasoline may be a bad omen for area airports.

The unpredictability of the financial markets is another unknown quantity. Once again, airports say they are in a wait-and-see position.

Bruce Frallic, AAE, executive director of the Gulfport-Biloxi International Airport, said, “The economy is obviously a significant factor in travel plans,” Frallic said. “We’ll have to see what kind of budget people have for Christmas.”

Lane Rodgers, director of Mid-Delta Regional Airport in Greenville, said he was optimistic, but added that another significant downturn in the economy and/or more instability in the price of gasoline could change the picture dramatically.

Will discounts help?

While reduced ticket prices can only help area airports, many say that it will make little difference for them. For instance, airlines only make up 5.7 percent of Jackson-Evers International Airport’s business. And of that, only roughly 30 percent is leisure travel. Throw in that Jackson is largely a drive-in market, and holiday travelers are not as big of a concern for Vanderleest and his staff.

For Tom Heanue, discount fares mean even less. He is executive director of the Hattiesburg-Laurel Airport, which has only two flights, both of which are subsidized by the USDOT. That subsidy precludes airlines offering extra seats/flights, and discounted tickets have little or no effect there.

There is good news on the discount front, though. There are some great fares out there, such as AirTran offering one-way airfare of $49 from Gulfport-Biloxi to Atlanta and Southwest Airline’s one-way fare of $39 from New Orleans to Birmingham. Great deals, but they may get even better. Once again, it is too early to tell just how deep airlines may slash ticket prices.

“Airlines, right now, are testing the waters,” Frallic said. “If they see people lining up in droves for flights, then there won’t be much discounting. If the opposite happens, then they will probably offer more discounts. They are offering these discounts to try to get a feel for what travelers are planning. We won’t know until maybe a week or two before Christmas if there will be more discounts or not. It will all depend on how much they are competing with the highways.”

Contact MBJ staff writer Wally Northway at wally.northway@msbusiness.com.

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