Lousy airline revenue numbers for Florida a concern and other commercial aviation news

Governor Ron DeSantis gets credit for stimulating travel to Florida during the height of the COVID pandemic. Keeping Florida open and “free” was his goal. Not only did Florida’s spikes in COVID during the summer’s of 2020 and 2021, coincide with dips in the rest of the country but we now have some evidence that the increased travel and capacity to Florida didn’t really help the airlines much.

In the industry, we use a term known as RASM (Revenue per Availible Seat Mile) to determine yields, profitability, etc. Full planes don’t mean profitable flights per se. What matters is how much people pay per seat and how far they fly.

I’m not at liberty to share the actual numbers but have seen data which ranks Miami and Fort Lauderdale as the two worst major airports in the country for RASM in the first three quarters of 2021. Similarly, Pensacola and Fort Walton Beach/Destin were two of the worst medium sized airports in the country for RASM. Airlines flooded capacity to Florida since the state was open and the result was a race to the bottom in terms of fares and lower-end non-business traffic flocking to the state.

What has happened has Florida has now attracted the the type of low-end tourist traffic that used to go elsewhere. Ultimately, while it may not impact some merchants, it undoubtedly hurts airlines. It’s hard to know if this is good or bad, because while Florida’s travel spike kept the economy stronger than other places during COVID, it’s tough to reverse the major dip in RASM we saw in Florida as low-cost carriers flooded capacity to the state.

We already see mainline, network carriers like Delta, United and Alaska losing some interest in serving Florida from points beyond their hubs, with only American among the four full-service US carriers maintaining strong Florida networks that bypass some hub cities (and also maintaining a gargantuan hub in Miami). Delta’s route network to Florida is now weaker than any point since deregulation in 1978, which is worth noting in this discussion.

Also worth noting, is that Orlando International, the busiest airport in Florida came through this period okay. Other large airports in the state like Tampa International and Southwest Florida International (Fort Myers) had similarly concerning numbers as Miami and Fort Lauderdale did.

Ultimately, it depends on your perspective what is good and not. I suppose for some the more people that come to Florida the better. But long-term I am concerned that when business travel rebounds, which it will at some point, Florida will lose lots of airline capacity because even if planes are full, airlines are losing money flying here. Big business centers like Boston, New York, San Francisco and Seattle will recover traffic and capacity at Florida’s expense and this might be a permanent shift. Or at least that is my concern.

Moving on, this week was highlighted by more cuts:

Spirit will begin Orlando-Salt Lake City service in May.

As Covid restrictions wane, Delta continues to shift capacity to Boston and New York leading to cuts from Florida to other destinations but increased frequency on flights from Florida cities to the Northeast.

Similarly American is trimming flying through March, maintaining service levels in Boston and New York and cutting elsewhere. It also appears based on the latest filings, AA is dropping Fort Lauderdale-Port-Au-Prince nonstops permanently, leaving Spirt and JetBlue to duke it out on the route.

Copa Airlines will reduce Fort Lauderdale-Panama City, Panama service to sub-daily through June.

Royal Air Maroc will not fly to Miami until April. Miami-Casablanca nonstops are now not scheduled to resume until April at the earliest.

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