US Midwest airports handle over 250 million annual passengers; Chicago dominates but demand is down over 15% in November; Southwest coming to Minneapolis/St. Paul

Map: US Midwest
(Just in case you wondered where these cities are.)

The US Midwest, as defined by the US Census Bureau consists of 12 states – Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, Ohio, North Dakota, South Dakota and Wisconsin. The total population of these states is estimated at around 66 million and the largest urban areas are Chicago, Detroit, Minneapolis-St. Paul, St. Louis and Cleveland. This is reflected in the traffic statistics for the region’s airports.

Image: AirTran has landed in the Columbus, Ohio market
More AirTran shareholders’ cash lavished on a route launch party: Tad Hutcheson, vice president of sales and marketing, announces its landing in the Columbus, Ohio.
Chart: Top 12 US Midwest airports Annual passengers 2007 (millions)
Source: Airport websites

The 12 busiest airports in the Midwest handled almost 250 million passengers in 2007 with Chicago’s two major airports (O’Hare and Midway) handling over 95 million alone.

Chart: Decline in passenger numbers, US Midwest airports - November 2008
Source: Airport websites * Data for September ** Data for July

The region has been hit hard by the current economic slump and latest figures (mostly for November) reveal that traffic is down at least 15% at eight of the top 12 airports with Cincinnati (the most expensive airport in the US for passengers) suffering most with demand falling over 25%.

Detroit’s position is misleading as the airport is the only major US airport not to publish traffic statistics on its website. Judging by local news reports in Detroit the airport seems to have some problems keeping track of its passenger numbers.

The annual North American International Auto Show taking place this week in Detroit comes at a difficult time for America’s big three manufacturers (Chrysler, Ford and GM), all of which are based in the area. In December all three saw car sales in the US fall by more than 30%.

Delta/Northwest present at all 12 major airports

Logo: MinneapolisOnly Delta/Northwest has a presence at all 12 of the major Midwest airports. Delta is dominant at Cincinnati while Northwest is in pole position in both Minneapolis/St. Paul (MSP) and Detroit. Southwest has a presence at eight of the 12 airports and will be starting operations from MSP in March with eight daily flights to Chicago Midway.

Chart: Airline market share at US Midwest airports, Share of scheduled seat capacity - January 2009
Source: OAG Max Online for w/c 5 January 2009

Unusually for the region over 60% of Milwaukee’s traffic comes from airlines that are not the major legacy carriers or Southwest. Milwaukee is still dominated by Midwest Airlines (in which Northwest has a minority stake) and AirTran who between them offer over half of all seat capacity at the airport.

Southwest keeps fares down at its airports

In terms of average fares (adjusted for average sector length) Southwest’s 80% share of Midway capacity helps make it the cheapest airport for passengers. Southwest’s significant presence at Columbus, Kansas and Omaha results in these airports also having below average fare levels.

Chart: Fare premium at US Midwest airports, Comparison with national average for 2008 Q2
Source: US DOT Office of Aviation Analysis

Cincinnati remains in a class of its own when it comes to high fares but Southwest’s arrival at MSP may bring average fares at that airport more in line with the national average. Even though Southwest is starting with only one service (to Chicago Midway) this is enough to enable it to offer one-stop connections to over 40 other destinations on its network.


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