Friday, September 5, 2014

The Struggles of Dulles and How Frontier May Help

The arrival of Frontier at Dulles marks a new beginning for an airport that has struggled to attract domestic passengers since Independence Air ceased operations back in 2006. It also shows the ambitions of Frontier as it continues its transformation as an ultra low cost carrier (ULCC).  
   Frontier is adding 18 destinations from Dulles, a major expansion even if most of the destinations are receiving three weekly flights. Ever since Independence Air folded back at the beginning of 2006, passenger numbers have fallen and domestic service has been cut by the likes of United Airlines and Jetblue (the latter which cut service to Oakland and Long Beach due to their expansion at Reagan National). Washington Dulles International Airport began operations in 1962 as the exclusive airport for jets in the DC area and was intended to be the primary airport of the region. Reagan National airport operated more flights but they were exclusively propeller at that time. Congress in 1969 decided to place slot and perimeter restrictions on National airport to push service out to Dulles International. The restrictions worked as passengers and flights were transferred out to Dulles. In most cities National would have been closed down due to noise pollution (especially with the arrival of jets) but our lawmakers sure do like the convenience of an airport a short drive away. The fall of Dulles' domestic passenger numbers can be linked to 1998 when the new terminal B/C was opened at Ronald Reagan Washington National Airport. 
     Increased flight operations in the 1990s to National, especially with the arrival of Delta, led to an extremely cramped facility. The airport built an entirely new terminal B/C that increased the aesthetic appeal of the airport and allowed for more flights. In 1999, Sen. John Mccain pushed for an end to the perimeter restriction at National Airport. The restriction wasn't removed but the FAA was allowed to hand out slot exemptions to the perimeter rule. Alaska Airlines received the first slot exemptions and started flights to Seattle. The first slot exemptions would eventually lead to more west coast flights (one of Dulles' previous advantages) and the historic perimeter rule easing in 2012 that led to even more west coast flights. During the early 2000s, Dulles was a major international hub connecting the world to many destinations. Dulles also was an important hub for United, which operated Dulles as its only east coast hub at the time. The arrival of Independence Air led to passenger numbers booming all the way up to 27 million in 2005. Ever since the folding of Independence Air, Dulles has lost passengers every year except for 2007 and 2010. The Southwest focus city at Baltimore pulled budget passengers to BWI while new west coast flights from National to important business markets like Los Angeles and San Francisco also hurt Dulles. The merger of  Continental and United led to two east coast hubs for United (Newark and Dulles) and questions have been risen on whether United will keep their Dulles hub. Dulles was never the most convenient airport as it is located out in the suburbs while Reagan National is Metro accessible and a short drive across the river from DC. The infamous people movers (or mobile lounges) didn't help the overall airport facility at Dulles as they were regularly packed and wait times were around 15 minutes. The "temporary" terminal C/D (that has been there for 30 years and also houses United's hub operations) is a below average facility that has been needed to be rebuilt for what seems like forever. The arrival of the much needed Mitsubishi Aerotrain and a boom of international passengers has still not off set passenger decline. In 2013 Dulles fell to 21.9 million passengers, behind BWI's 22 million. Reagan National set a record with 20 million. Dulles will always be an important international gateway but the convenience and ease of National (and the help of our lawmakers) has led many people away from Dulles. 
   The arrival of Frontier is the lone hope for the airport to regain passenger numbers. Frontier operates out of the convenient Z gates (no Aerotrain or people mover needed) and brings attractive low fares to a variety of leisure and business destinations. Frontier is expanding their presence in former legacy hub airports such as Cleveland and Cincinnati and somewhat continues this trend with the introduction of service at Dulles. Frontier has also experienced success at their focus city in Trenton New Jersey and looks like it is starting to thrive in its new business model. Is Frontier going to find success at Dulles and boost passenger numbers? That's a hard question to answer. There is certainly a big market for ULCC's with Spirit and Allegiance showing good growth and Frontier will most likely attract passengers with their low fares. Frontier will  find success on most of their routes but they won't be able to turn Dulles into an east coast mega hub, that's up to United and our lawmakers.          

Video of the Week





Sources:
http://en.wikipedia.org/wiki/Independence_Air
http://en.wikipedia.org/wiki/Washington_Dulles_International_Airport
http://en.wikipedia.org/wiki/Ronald_Reagan_Washington_National_Airport
http://en.wikipedia.org/wiki/Alaska_Airlines
http://www.airport-technology.com/projects/ronaldreagan/
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/06/AR2010070605250.html

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