Houston, we don’t have as big a problem as many airports (despite Hurricane Ike)

Image: Singapore Airlines launched services to Houston earlier this year
Singapore Airlines launched services to Houston earlier this year, with an eye-catching inauguration featuring a traditional dragon dance. The service is operated four times weekly. “Houston is a global transportation gateway and a major hub when it comes to the energy industry, and the new options Singapore Airlines offers will strengthen business and tourism opportunities not only in Houston but throughout the region,” said Richard Vacar, director of the Houston Airport System.

Logo: City of HoustonNext year Houston’s George Bush Intercontinental Airport (IAH) will celebrate its 40th anniversary. With almost 43 million passengers in 2007 it ranked 8th in the US and 16th in the world. After several years of relatively modest growth, passenger numbers increased 18% between 2003 and 2007. Continental has its biggest hub at the airport, which also ranks as the third biggest hub of any US airline.

Chart: IAH traffic 1999-2007 Annual passengers (millions)
Source: Fly2Houston.com

In the first eight months of 2008 traffic was up around 1%. However, Hurricane Ike which swept through Texas in mid-September caused severe disruption to operations and as a result passenger numbers in September were down almost 20% on the previous year. In October traffic was still down but now by only 7.8%.

Continental dominant on many leading routes

This winter 14 of the airport’s top 15 routes are domestic, with London Heathrow the only international route making the rankings. Continental has a monopoly on seven of these 15 routes.

Chart: Top 15 routes at Houston IAH (Weekly departing seats)
Source: OAG Max Online for w/c 1 December 2008

According to the airport’s own figures Continental has handled 62.9% of the airport’s passengers in the first 10 months of this year. If the figures for Chautauqua and ExpressJet, which operates flights on behalf of Continental, are added in then Continental’s share of traffic rises to around 85%. American with around 2.2% of traffic so far this year is the next biggest airline in passenger terms.

Image: The Houston Airport System $1.2 billion renovation project
The Houston Airport System has launched a $1.2 billion renovation project, in partnership with Continental Airlines, which will see the expansion of Terminal B at George Bush Intercontinental Airport. The multi-phased renovation is scheduled to be completed over the next seven to 10 years.

New non-stops to Rio and Doha coming soon

So far in 2008 international traffic has grown by 3.7% while domestic traffic is down 3.2%. Several airlines have started new international routes during the last year including Emirates to Dubai (in December 2007) and Singapore Airlines to Singapore via Moscow Domodedovo. Both British Airways and Continental moved their transatlantic flights to London from Gatwick to Heathrow back in March.

Next week sees the start of thrice-weekly non-stop services to Rio De Janeiro operated by Continental until mid-February. Continental already serves Sao Paulo daily. In February Qatar Airways will start operating daily non-stop to Doha and Continental will also launch daily flights to Frankfurt (in direct competition with Lufthansa) from next November.

Apart from intercontinental services the airport claims to serve more Mexican destinations than any other airport. This winter Continental serves 29 destinations in Mexico with AeroMexico providing the only competition on its route from Mexico City. In comparison, only three destinations are served in Canada – Calgary, Toronto and Vancouver – and Air Canada competes with Continental on two of these.

Fares among the highest in the US and getting higher

According to data collected and published by the US DOT Office of Aviation Analysis Houston (IAH) is one of the most expensive airports for passengers anywhere in the US with average fares around 20% above the national average. The most recent quarter for which data is available (2008 Q2) showed that Houston’s fare premium had increased five percentage points since the first quarter.

Period Average Fare Fare Premium
All Markets
Fare Premium
Fare Premium
2007 Q1 $191 13% 14% 13%
2007 Q2 $201 16% 8% 17%
2007 Q3 $211 21% 12% 22%
2007 Q4 $211 19% 8% 21%
2008 Q1 $220 20% 5% 22%
2008 Q2 $228 25% 17% 26%
Source: US DOT Office of Aviation Analysis

For passengers in the Houston area who want a good air fare deal then Houston Hobby airport is a better bet. Southwest has a major presence there with 29 destinations served non-stop and in the second quarter of 2008 average fares at the airport were $152, about 8% below the national average when adjusted for sector length.


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