[00:00:10]
OKAY. IT IS 3:30. WE WILL CALL THE MEETING TO ORDER. DON
[MINUTES ]
SENT OUT THE MINUTES. EVERYBODY REVIEWED THE MINUTES.CAN I GET A MOTION TO APPROVE THE MINUTES?
[3. Airport Management Reports]
ALL RIGHT. SO. AS WE GO DOWN THE AGENDA ITEMS, WE HAVE A SPECIAL GUEST AND WE WILL SKIP RIGHT DOWN TO AGENDA ITEM NUMBER FIVE. AIR SERVICE ISSUES. PRESENTATION AND DISCUSSION WITH AIR SERVICE CONSULTANT . MARTIN CAMERON.WE WANT TO INTRODUCE MARTIN. DO YOU WANT TO T MARTIN UP.
AND HAVE THEM COME UP AND SPEAK?
>> I'LL BE HAPPY TO. THANK YOU FOR SHOWING UP. THIS IS QUITE THE ESTEEMED CROWD FROM WHAT WOULD NORMALLY HAVE AN AUDIENCE FOR THE INPUT DEVELOPMENT. IF ANYBODY IS WATCHING ONLINE ON MOST NORMAL DAYS. WE HAVE THE AIR SERVICE CONSULTANT, MARTIN. MARTIN HAS BEEN WORKING WITH THE AIRPORT COMING UP ON SEVEN YEARS NOW. WE WILL HAVE A LITTLE BIT OF THE BIO UP HERE SHORTLY. MARTIN IS EXPERIENCED IN THE AIRLINE INDUSTRY. I TOLD HIM AT ONE POINT I HAD BEEN STALKING HIM TO GET THEM TO WORK FOR THE AIRPORT AS A CONSULTANT FOR SEVERAL YEARS. I WORKED WITH HIM IN 2009, 2010 TIMEFRAME WITH UNITED AIRLINES TRYING TO GET THE SERVICE HERE. SHE DID JUMP INTO THE CONSULTING SIDE. THEN, WE EVENTUALLY DID GET HIM ON BOARD WITH US. I'M REALLY GLAD TO HAVE HAS EXPERTISE. YOU KNOW SO MUCH ABOUT THE INDUSTRY. AND IS WELL RESPECTED. BY HIS PEERS AT THE AIRLINES. AND OTHER CONSULTANTS AS WELL. WE DID WANT TO BRING HIM IN. HE CAME AND SPOKE TO THE CITY. HE'S BEEN HERE TWICE OVER THAT TIME PERIOD, 2018. IN 2021, DECEMBER 21. I THINK WE BRING A LITTLE BIT BETTER AS FAR THE AS THE STATE OF THE INDUSTRY.
SHE WILL EXPLAIN WHAT IS GOING ON IN THE INDUSTRY. WHERE ABILENE STANDS AND FITS IN WITH THE DATA. IN THE PATH GOING FORWARD TO IMPROVE. WE HAVE REALLY GOOD AIR SERVICE ACTUALLY, TO BE HONEST WITH YOU, WITH AMERICAN AIRLINES. WE ARE ALWAYS TRYING TO IMPROVE THAT. WITH THAT. I WILL HAND IT OVER TO MARTIN. HE WILL GO THROUGH THE PRESENTATION. AND LEAVE IT OPEN FOR QUESTIONS AFTERWARD. AGAIN, THE AGENDA WE HAD FOR TODAY. THE ACTION ITEMS DID NOT PAN OUT. THEY WORKED OUT TO GET THE FULL ATTENTION TO MARTIN'S PRESENTATION. WE WILL LET YOU GET STARTED THERE. OKAY?
>> THANK YOU ALL FOR HAVING ME. I APPRECIATE THE INVITE. I'M PERSONALLY VERY HAPPY TO BE HERE. IT'S VALENTINE'S DAY.
MY WIFE IS NOT REALLY HAPPY ABOUT IT. BUT I'M TAKING HER OUT TO DINNER FRIDAY NIGHT. YOU PROBABLY WILL NOT BE AS CROWDED AT THE RESTAURANT EITHER. WE ARE HERE TO TALK ABOUT THE SERVICE IN ABILENE. I MARTIN CAMERAMEN, THE DIRECTOR OF AIR SERVICE STRATEGY DEVELOPMENT --. IT IS A COMPANY THAT WORKS WITH AIRPORTS SHOULD TRY TO FIND NEW WAYS TO --. FOR THE REST OF MY CAREER, I'VE BEEN IN AIRLINE GUY. I WORKED AND -- AIRWAYS, UNITED, CONTINENTAL, U.S. AIRWAYS. AND -- WHEN I WAS AT THE BUSINESS AT MY UNIVERSITY. IT'S BEEN SPENT IN A NETWORK PLANNING ROLE. THEY GO THROUGH THE PROCESS OF MAKING DECISIONS AS TO WHICH FLIGHT SHOULD BE IN THE NETWORK. WHAT TO DO IN CASE OF CHALLENGES AND OTHER ISSUES AND WHAT TO DO WITH MERGERS AND ALL THAT KIND OF GOOD STUFF. MOST OF MY TIME WAS SPENT DOING THAT. AND A LITTLE BIT ON THE CUSTOMER SERVICE OUT OF THE BUSINESS. ULTIMATELY, I'M A DATA GUY. I HAVE A GOOD ABILITY TO TALK ABOUT THE DATA BUT I'M NOT REALLY A PUBLIC SPEAKER.
[00:05:01]
I'M A BEHIND-THE-SCENES NUMBERS GUY TRYING TO FIND OUT HOW TO SOLVE THESE PROBLEMS. THE COMPANY I WORK FOR IS ASM.IT'S IN THE CIRCLE HERE. THAT IS THE AVIATION WEEK NETWORK.
IT IS A PUBLICATION THAT HAS BEEN AROUND AS A MAGAZINE FOR A LONG TIME. IT IS DATA ORIENTED NOWADAYS. ULTIMATELY. WE ARE MOVING ONTO LARGER COMPANY KNOWN AS --. IT IS MAINLY AN EVENT BUSINESS. SOMETHING LIKE THE ORGANIZATION THAT WE DO, WE ATTEND EVENTS TO MEET UP WITH AIRLINES AND OTHER AIRPORTS TO LEARN THINGS FROM THEM AS WELL. WHAT IS AIR SERVICE DEVELOPMENT? IT IS WHAT I DO FOR LIVING. IT IS TO FACILITATE CONVERSATIONS BETWEEN AIRPORTS AND AIRLINES.
THEY MAKE DECISIONS ON ROUTE TO CLEAR THE NUMBERS PEOPLE LIKE I'VE BEEN IN MY CAREER. MANY PEOPLE I WORK WITH ON THE AIR FORCE SIDE ARE OPERATIONAL. THEY UNDERSTAND THE OPERATIONS OF THE AIRPORT. OR THEY ARE ON THE MARKETING SIDE OF THINGS. I FILL IN THE SPACE. BECAUSE I WAS ON THE OTHER SIDE OF THE TABLE. AND I UNDERSTAND THE ECONOMICS AND HOW DECISIONS GET MADE. OTHER THINGS WE DO ULTIMATELY AS WE DO ANALYSIS AND BUILD BUSINESS CASES FOR WHY THIS AND THAT ROUTE SHOULD EXIST. AND WE WILL TALK TO A COMMUNITY TO COME DOING RIGHT NOW TO TALK ABOUT HOW THINGS HAVE CHANGED AND EVOLVED AND WHAT OPPORTUNITIES EXIST AND FROM THE WIDER COMMUNITY AND AIR FORCE PARTNER PERSPECTIVE. PART OF WHAT WE DO. WE OFTEN WILL GO TO AIRLINE HEADQUARTERS TO OUR CASES. AND WE'VE BEEN DOING MORE VIDEOCONFERENCING TO GET MEETINGS WITH PEOPLE WITH AIRLINES. I WILL NOT JUST LOOKING FOR THE BEST NEW ROUTE. BUT HOW DO WE KEEP WHAT WE HAVE? THAT'S AN AREA WHERE WE HAD A GOOD AMOUNT OF SUCCESS IN ABILENE IN TERMS OF THE ABILITY THAT WE HAVE. AT THE SAME TIME IN OUR DISCUSSION WITH AMERICAN, WE MANAGED TO MAINTAIN A REASONABLE LEVEL OF SEAT DEPARTURES AND CONNECTIONS TO WHAT ULTIMATELY IS THE THIRD-BIGGEST HUB IN THE WORLD. WHICH IS DALLAS. PEOPLE LIKE MYSELF. WE ARE EXPERTS ON SOME OF THE MATERIAL. WE ARE GOOD AT PUTTING NUMBERS TOGETHER AND GETTING THEM OUT THERE IN FRONT OF THE AIRLINES OR COMMUNITIES WE WORK WITH WITH THE AIRPORTS AND WE BUILD THE BUSINESS CASES. WE DO HAVE CHALLENGES. WHEN YOU TALK TO AN AIRLINE, THEY HAVE AN ESTABLISHED NETWORK. CERTAIN AIRLINES GO TO CERTAIN PLACES AND IT'S HARD TO CONVINCE A CERTAIN AIRLINE THAT DOESN'T LINE IN A CERTAIN DIRECTION OR DESTINATION TO TRY THAT. WHEN YOU TALK TO AN AIRLINE, YOU NEED TO UNDERSTAND THEIR SIDE OF THE EQUATION TO MAKE THE CASE FOR THE AIRPORT IN THIS CASE. AND WHEN YOU SAY, THIS NEW ROUTE MIGHT BE A GREAT LINE. WILL OVERFLY THE EXISTING HELP AND TAKE AWAY BUSINESS? THAT IS A POSSIBILITY. THEY'VE BEEN WORK, LATELY. YOU HEARD SOME REASON FROM THINGS THEY'VE BEEN DOING DEALING WITH SOME INSTANCES THAT THEY HAD. IT HAS SLOWED DOWN SOME DELIVERIES FOR AIRLINES THAT WERE RECEIVING AIRCRAFT IN THE NEAR FUTURE. I FLEW ON THE BOWEN 737 900 MAX ON THE AIRLINE THAT WAS NOT ALASKA AIRLINES. FOR ME, THAT IS A STORY TO TELL AND CONFERENCES ABOUT EVER BEEN ON THAT ALASKA AIRLINES FLIGHT. THEY BECOME A BIGGER ISSUE.
WE HAD ISSUES GETTING EQUIPMENT AND PARTS AND LABOR DOING COVID. THEY STILL EXIST TODAY BUT THEY HOLD IT BACK FROM OVERALL AVIATION INDUSTRY. THERE ARE LOCAL AND GLOBAL STATE AND FEDERAL ECONOMICS AND CHANGES IN LAWS. THEY HAVE AN IMPACT ON WHAT IT IS WE DO AND HOW WE DO IT. THEY CHANGE AND IT EVOLVES OVER TIME. IT'S THE REASON WE TRY TO MEET WITH THEM FREQUENTLY. PART OF THE ANALYSIS AND DECISION-MAKING PROCESS. CANNIBALIZATION OF NEW ROUTES HAS AN EFFECT. TO GIVE YOU AN EXAMPLE. WHEN I CAME OVER FROM THE AIRPORT LAST NIGHT IN A TAXI. THE DRIVER WAS LIKE, IT'LL BE GREAT IF WE HAD A FLIGHT TO CHICAGO. AND I TOTALLY AGREED. IT WOULD BE GREAT. IF AMERICAN WOULD SUPPLY -- WOULD FLY THE ROUTE, THERE WERE PEOPLE FROM CHICAGO. PLACES BEYOND DALLAS AND CHICAGO. IT'S AN IMPORTANT THING FOR THE AIRLINE. YOU WANT TO FIGURE OUT HOW THE ECONOMICS CONTRIBUTE
[00:10:05]
TO THAT. THERE ARE OTHER AIRPORTS AROUND US. THEY PRETEND THERE ARE AIRPORTS IN THE OVERALL REGION AND WE CAN CONNECT THIS CHOICES AND CHANGES OCCUR AROUND OTHERAIRPORTS AS WELL. >> LET'S TALK LITTLE BIT ABOUT HOW WE VIEW ABILENE AND THE CUSTOMERS IN THE PAST. AND THE Z.I.P. CODES IN GREEN YOU SEE HERE. THE DARKER COLORS MEAN HIGH POPULATION DENSITY. THERE ARE RINGS AT 3060 AND 90 MINUTES DRIVE. WHEN PEOPLE FLY FROM THE Z.I.P. CODE, ONLY -- USE ABI. THE NEXT BIGGEST NUMBER IS 11% USED DALLAS LOVE. IF YOU GO TO AUSTIN, NOBODY'S REALLY, WE SEE VERY FEW PEOPLE GOING TO MIDLAND OR LUBBOCK OR SAN ANGELO. THEY ESSENTIALLY LEAK OUT OF THE AREA. WHEN PEOPLE FROM THE Z.I.P. CODES CHOOSE TO FLY, WHICH AIRLINES ARE THEY FLYING? NOT SURPRISING, THE BIGGEST IS AMERICAN. IF YOU WERE TO BREAK THE LARGE RED AMERICAN AIRLINES PART OF THE PIE CHART, PART OF IT WOULD BE ABI BUT THE REST IS PEOPLE DRIVING TO DFW WITH A TINY AMOUNT GOING TO AUSTIN. THE NEXT BIGGEST AIRLINE A SOUTHWEST MOSTLY GOING TO DALLAS AND AUSTIN. THE OTHER LIKE SPIRIT, UNITED AND DELTA FROM DFW AND PEOPLE FLYING THE AIRLINES. THESE ARE GOOD THINGS TO KNOW WHEN TRYING TO UNDERSTAND CUSTOMERS ORIGINATE, WHERE ARE THEY FLYING? THE NEXT QUESTION IS WHERE DO THEY GO? THIS IS A LIST OF THE TOP 25 DESTINATIONS. THE BLUE BAR PRESENTS PEOPLE USING ABI WHEN THEY GO TO THE DESTINATIONS. THE RED PEOPLE FROM THE Z.I.P.
CODES. WHO ARE USING SOME OF THE AIRPORT WHEN THEY TRAVEL.
THE NUMBER ONE MARKET IS LAS VEGAS FOR PEOPLE WHO ORIGINATE HERE. NUMBER TWO, LOS ANGELES. NEXT, DENVER, ORLANDO, CHICAGO , NEW YORK AIRPORTS, ATLANTA, PHOENIX, SAN FRAN, RUNNING AT THE TOP 10 IN SAN DIEGO. BY THE WAY, IF ANYBODY NEEDS A COPY, WE WILL SEND YOU A PDF LATER. YOU WILL NOTICE THAT THE DALLAS-FORT WORTH ONE, NUMBER 14, THE BLUES MUCH LARGER.
OCCASIONALLY, PEOPLE ARE USING THE AIRPORT TO GET THERE. IN THIS CASE, THIS IS GOING FROM OTHER PLACES LIKE MIDLAND OR AUSTIN OR MAYBE EVEN A TINY BIT OF --. IF YOU TAKE THE TOP 25 AND MAKE IT TOP 100, IT LOOKS LIKE THIS IN TERMS OF THE TOP PLACES PEOPLE GO TO WHEN THEY FLY. SOME OF THIS BE COVERED AROUND IT. YOU CAN SEE REGIONS THAT ARE BIGGER THAN OTHERS. WE ARE BIG TO CHICAGO AND THE NORTHEAST. FLORIDA, ELLIE, LAS VEGAS, PHOENIX. BUT NOT THAT BIG TO THE NORTH OF THE NORTHWEST. OVER THE LAST 10 YEARS, THIS IS A TREND OF TRAFFIC IN AND OUT OF THE ABI AIRPORT. BEFORE WE TALKED ABOUT PEOPLE FROM THE Z.I.P. CODE, THIS IS PEOPLE WHO USE ABI WHEN THEY FLY. BLUE REPRESENTS THEM TROUBLE DOMESTICALLY. RED REPRESENTS INTERNATIONAL. THERE'S A BIG DROP IN 2020. NOT AS BIG AS SOME OTHER PLACES. AND WE HAD SOME RECOVERY. INFORMATION IS GOOD THROUGH THE END OF SEPTEMBER 2023. IN THE NEXT QUARTER FROM THE D.O.T. WE WILL CONTINUE TO SEE AN UPTICK ON THE LAST COLUMN ON THE FAR RIGHT. THE DATA I HAVE HERE LEFT SIDE REPRESENTS 2019 SEAT CAPACITY. HOW MANY SEATS ARE DEPARTING ABILENE PER MONTH.
YOU CAN SEE THE LEVEL ON THE LEFT SIDE. I WILL TALK ABOUT THE MIDDLE IN A MOMENT. WE ARE ABOVE THE 2019 LEVEL FOR THE C DEPARTURE AT ABI. WE TYPICALLY HAVE ABOUT FIVE FLIGHTS A DAY SLIGHTLY. THE FIVE TODAY. WE USED TO HAVE SIX TODAY. BUT THE SIXTY-DAY ONE , ONE CABIN AIRCRAFT AND WE HAVE NOW, 76 SEAT AIRCRAFT WITH DUAL CABINETS. WHAT ABOUT THIS PART
[00:15:01]
IN THE MIDDLE? REPRESENTS A TIME. A TIME PERIOD WHERE WE HAVE THE SERVICE OPERATED BY SKYWEST AIRLINES TO HOUSTON. IT CAME IN DURING COVID. THE OPPORTUNITY , THE AIRPORT SKYWEST AND UNITED CAME ON. IT DIDN'T WORK OUT FOR REASONS THAT ARE DIFFERENT FOR THE WAY THINGS NORMALLY WORK OUT. ONE OF THE REASONS I INCLUDE THIS HERE IS EVEN IN THE HEART OF THE COVID. WOULD IN EARLY AND MID-2021, WE HAD IN THAT TIME BECAUSE THERE'S DEFINITELY HIGHER DEMAND IN ABILENE FROM PEOPLE WHO CAN FLY FROM HERE THAN ACTUALLY WOULD NORMALLY FLY. MY GOAL IS SOMEBODY IN THE AIR SERVICE DEVELOPMENT IS TO FIND MORE WAYS TO GET MORE FLIGHTS AND MORE DESTINATIONS HERE. THERE IS MORE DEMAND IF WE HAVE THE SEATS AND FLIGHTS AVAILABLE. IT IS AN INTERESTING WAY TO LOOK AT THE DATA. SO. SOMEBODY WILL OFTEN ASK. HOW ARE THE AIRPORTS DOING? EXCLUDING BALANCE HOUSTON AND AUSTIN. TO FIND ONCE MORE SIMILAR IN SIZE. IT REPRESENTS AN ASSORTED BY THE SEAT SIZE FOR FEBRUARY. FOR EACH OF THESE PLACES. EL PASO IS THE LARGEST ONE ON HERE. NOBODY HAS ANY FLIGHTS. IT DID BACK IN 2019. THE CHANGE VERSUS 2019. WHAT IS THE SEA CHANGE OF FEBRUARY FOR 2024 VERSUS FEBRUARY 2019 AND A PRE-COVID CONTEXT. WE ARE ONE OF THE BETTER ONES ON THE LIST IF NOT THE BEST. 54%. SOME ARE DOWN AND SOME HAVE INCREASED A BIT. A LOT OF THESE ARE SERVED BY AMERICAN TO DALLAS AND OTHER ONES. THE NEXT BIGGEST AIRLINES FOR TEXAS SERVICES WE ARE FROM HOUSTON. WE'VE SEEN LOWER NUMBERS OF FLIGHTS.HIGHER NUMBERS OF SEATS IN SOME MARKETS ESPECIALLY ABILENE DUE TO THE FACT THAT WE HAVE THE DUAL CAP AND 76 CEDAR AIRCRAFT. THE AVERAGE SIZE IS 24 SEATS BACK IN THE 2010S.
LET'S LEAVE ABILENE FOR A MOMENT AND TAKE A BIGGER VIEW OF WHAT IS GOING ON IN THIS BUSINESS. MERGERS OF AIRLINES.
THE VARIOUS AIRLINES EXISTED IN SOME FORM OR ANOTHER. SOME OF WHICH WE HAVEN'T HEARD FROM IN A WHILE BECAUSE THEY EMERGED BY NORTHWEST AND PERCH IN AMERICA. IT LEADS US TO A PLACE WHERE WE HAVE AIRLINES LIKE AMERICAN DELTA, UNITED AND SOUTHWEST. WHAT WAS IT LIKE BEFOREHAND? MERGERS BEGAN WITH DEREGULATION BACK IN 1978. THEY MERGED INTO OTHERS TO GIVE US THE BIG FOUR WE HAVE TODAY. DELTA, UNITED, SOUTHWEST AND AMERICAN. I NOTE A LITTLE BIT HARD TO READ. BUT THESE ARE LOW-COST AIRLINES. THAT EXISTED SINCE 1978. ONLY A FEW , ONLY NINE STILL EXIST TODAY. THERE'S A WHOLE BUNCH OF THESE HERE THAT EXISTED AT ONE POINT BUT HAVE FALLEN OFF THE MAP. LOOKING AT ONE OF THE BIGGEST TRENDS THAT AFFECTS AN AIRPORT IN A CITY LIKE ABILENE. IT IS BUSINESS TRAVELERS AND THE CHALLENGE WE HAVE IN THE PRE-COVID CONTEXT, THE TYPICAL WORKERS IN THE U.S., ABOUT 7.2% OF PAID WORKDAYS WERE DONE REMOTELY. THE NUMBER PICKED UP SUBSTANTIALLY TO 61% WHEN PEOPLE WERE NOT TRAVELING MUCH AT ALL. THE NUMBER HAS IMPROVED AND COME BACK DOWN. IT IS A LOT HIGHER THAN IT USED TO BE. THIS IS NEGATIVE IN THE AIRLINE BUSINESS OVERALL FOR SMALLER COMMUNITIES WITH THE BUSINESS ORIENTATION AS ABILENE DOES. PEOPLE TRAVEL TO AND FROM FOR FRIENDS AND FAMILY AND BUSINESS. THERE AREN'T MANY PEOPLE COMING FOR THE AMUSEMENT PARK AT THE BEACH FOR EXAMPLE. THE PERCENTAGE OF PEOPLE THAT ARE FULLY REMOTE OR WORKING HYBRID IN THE EMPLOYMENT IS DEFINITELY HIGHER THAN IT USED TO BE. IT SEEMS TO HAVE A NEGATIVE EFFECT ON PEOPLE TRAVELING FOR BUSINESS. IT HAS A POSITIVE EFFECT ON PEOPLE TRAVELING FOR LEISURE. AT A LESSER DEGREE. ANOTHER FACTOR WITH AN IMPACT IS THE PRICE OF FUEL. IT'S A SHORT FLIGHT FROM HERE TO DFW AND A LONGER FLIGHT. THE PRICE OF FUEL IS HEAVILY ON SMALLER AIRCRAFT THAT WE SEE IN SMALLER COMMUNITY. IF YOU HAVE
[00:20:01]
A CAR WITH FIVE SEATS AND A SCHOOL BUS, SCHOOL BUS USES MORE TOTAL GAS. THE AMOUNT OF GAS YOU NEED TO FILL UP THE SAME AMOUNT OF SEATS AS A SCHOOL BUS IS DIFFERENT. THEY CAN MORE EFFECTIVELY USE FUEL. WE HAD WORSE TIMES FOR FUEL.THE END OF 23 WAS NOT THE BEST. BUT THE TREND FOR THE LAST FEW MONTHS HAVE BEEN GOOD WITH FUEL PRICES GOING DOWN.
ANOTHER BIG RING THAT HAD AN IMPACT ON AIRPORTS LIKE OURS.
THE AVERAGE SEAT ON AIRLINES. IN THE EXAMPLE, THE FIRST ONE OF THE FAR LEFT WAS AMERICAN. THE AVERAGE SEAT FOR TO DO -- THE AVERAGE SEAT WAS -- TODAY IT IS HUNDRED AND 22. IT'S NOT AS BIG OF A DEAL AS I SAY IF WE LOOK UNDERNEATH THE FAR RIGHT SIDE OF THE CHARTS. FRONTIER IN 2010. THE NUMBER WAS HUNDRED AND 13 SEATS PER AIRCRAFT ON AVERAGE. NOW IT IS HUNDRED AND 94. AT HUNDRED AND 13, -- AT 113, IT IS EASIER TO CONSIDER AS AN OPTION BECAUSE WE CAN FILL IT A FEW DAYS A WEEK. 194, IT IS STILL POSSIBLE BUT THE BARS HIGHER. THE TREND IS IDENTICAL IN NEARLY EVERY AIRLINE IN THE UNITED STATES.
WE DO HAVE A FEW NEW ONES. SOME OF THE SEA COUNT A LITTLE BIT LOWER. BUT THEY ARE USUALLY RELATIVELY SMALL. NUMBER TWO, UNITED I WAS AN EMPLOYEE IN THE AVERAGE SEATS WERE 83. WE FLEW TO MANY INTERESTING PLACES THAT COULD NOT NECESSARILY HANDLE A LARGER AIRCRAFT. THE NUMBER IS 123. THAT IS ONE OF THE CHALLENGES THAT THEY HAVE. THEY STILL HAVE 50 SEAT AIRCRAFT'S BUT IS A LOT LESS THAN THEY USED TO BE. YOU CAN SEE IT ON THE NEXT SLIDE. IT SHOWS BY YEARS DIFFERENT AIRCRAFT SIZES FOR THE U.S. DOMESTIC INDUSTRY. ON THE FAR LEFT IN 2005, THE PLACES WITH FLIGHTS AND WHAT TO 37 SEATS 3850 SEAT AND 50 TO 100 TAKE UP MORE THAN HALF OF THE TOTAL.
THEY HAVE SHRUNK CONSIDERABLY. THERE WAS A TIME WHEN THERE WERE ONLY IN THE RED CATEGORY. IN THE GREAT CATEGORY. THEY ADVERTISE 76 AND YOU WILL NOTICE THE GREEN AREA WITH AIRCRAFT SIZES OVER 151 HAS INCREASED SUBSTANTIALLY. IT IS A CHALLENGE THAT WE WORK THROUGH AND WE TRY TO WORK WITH AND LOOK AROUND AND IT IS SOMETHING THAT AFFECTS SMALLER COMMUNITIES LIKE OURS. ANOTHER ISSUE WE HAVE IS A PILOT SHORTAGE. I WILL GIVE YOU HISTORY FOR SOME NOT FAMILIAR.
IT'S 1009, THE AIR FLIGHT CRASHED OUTSIDE BUFFALO NEW YORK AND 50 PEOPLE WERE KILLED. IT'S THE LAST AIRLINE CRASH WERE ESSENTIALLY IT OCCURRED LIKE THIS. WHERE NOBODY DIED OR WAS INJURED IT'S ACTUALLY BEEN A SAFE INDUSTRY WITH 2009 IN THE LAST SIGNIFICANT POINT. IN RESPONSE, IN 2010, CONGRESS PASSED THE AIRLINE SAFETY ACT WHICH TOOK EFFECT IN 2013. THE BIGGEST CHANGE WAS THAT IN THE PAST, TO BE A COPILOT, YOU NEEDED TO 50 HOURS OR MORE OF TIME LEARNING HOW TO FLY. THE NUMBER WENT FROM TWO $50-$1500.
THAT WAS A HUGE DIFFERENCE. BOTH PILOTS HAD MORE THAN 1500 HOURS AND HAD BEEN FLYING FOR MANY YEARS. FROM MY PERSPECTIVE, THE GOVERNMENT SAID, YOU HAD A PLANE CRASH AND PEOPLE DIED. AND WE HAVE TO DO SOMETHING. WHAT THEY DID.
MAYBE IT WAS OVERDONE IN THE 250 TO 1500. WHEN WE GO AND SAY, WHAT'S THE REST OF THE WORLD DOING? THE LIST LEADS IN REGULATION FOR AVIATION. THIS IS ONE AREA WHERE NO OTHER COUNTRY FOLLOWED US AND CHANGED THE SYSTEM SO PILOTS FOR THOSE COUNTRIES HAVE TO GO TO 1500 HOURS. MOST CHANGES, NOTHING EVER HAPPENS. THIS IS A PROBLEM SINCE 2013. WHEN COVID BEGAN, MANY AIRLINES WERE NOT SURE HOW IT WOULD PLAY OUT.
ESPECIALLY TO SOME OF THE SENIOR PILOTS UNTIL AGE 65.
SOME OF THE MOST EXPERIENCED PEOPLE WERE GONE. WHEN THINGS WERE COVERED TO BE QUICKER , A LOT LESS PILOTS WERE AVAILABLE TO FLY. THE COMBINATION OF THOSE TWO THINGS PRIMARILY THE REGULATORY CHANGE AND THAT IS THE BIGGEST FACTOR NOT COVID.
MADE IT SO WHEN WE LOOK AT THE SHORTAGE OF PILOTS ESSENTIALLY GONE FOR 2016, THEY WOULD HAD ON THE GRAPH. IT'S DEFINITELY BEEN A BIG DEAL. THAT'S THE REASON AIRLINES HAVE GONE TO
[00:25:02]
LARGER AIRCRAFT'S. IT REQUIRES AT LEAST TWO PILOTS EVERY TIME EVEN IF THEY HAVE 30 SEATS ON IT. THE 757 THEY MAY HOLD 200,000 ALSO NEEDS TO'S. AIRLINES ESSENTIALLY, IT'S ONE OF THE BEING -- IT'S SOMETHING THAT ENCOURAGES THEM TO GO FOR LARGER AIRCRAFT'S AS WELL AS FUEL COSTS AND OTHER THINGS THAT ARE PART OF THE EQUATION. WHAT'S HAPPENING ACROSS THE U.S.? EVERY DOT ON THE MAP REPRESENTS AIRPORTS HAVE LOST A CERTAIN AMOUNT OF SERVICE. PLEASE SMALLER ONES LIKE OURS. THE AVERAGE LOSS WAS 31. A FEW HAVE GROWN OFTEN LEISURE DESTINATIONS LIKE BEACHES AND AMUSEMENT PARKS. SOMETIMES HELPS AND IT DEPENDS ON THE COUNTRY. IT HASN'T BEEN A PROBLEM FOR ABILENE TEXAS. INTERNATIONAL ISSUE. AIRLINES HAVE DROPPED SMOKING AMENITIES. WE SEE A LIST OF AMERICAN DELTA AND UNITED PLACES THAT THEY FLEW TWO AND 2019 THEY DON'T LIKE TO TODAY. THE PILOT SHORTAGE AND ISSUES OF THE BIGGER FACTOR THAN COVID. DEMAND IS BACK.AND OVERZEALOUS AIRLINES OFFERING RETIREMENT AND OPPORTUNITIES FOR PEOPLE. THESE ARE SHORTED BY THE STATE. IN TEXAS, IT IS ABILENE ALPHABETICALLY. THESE ARE PLACES UNITED HAD SERVICE TO IN TEXAS AND IT DOESN'T TODAY.
WHAT ARE THE AIRLINE THING ABOUT THIS? THIS THAT CAME OUT WAS WHEN UNITED WAS COMING OUT OF THE 36 CITY AND SCOTT KIRBY WHO WAS THE CEO AT THE TIME. RB ALONG WITH DELTA AND AMERICAN AND SOUTHWEST? COVERED TO THE HISTORICAL SUPPLY AND THE 7000 RANGE. IT'LL REMAIN A SIGNIFICANT CONSTRAINT ON CAPACITY. BASICALLY ANOTHER ARTICLE . AMERICANS COMING THROUGH MORE WITH 18 MARKETS TOTAL. IT IS REALLY UNFORTUNATE WE HAD TO REDUCE SERVICES ANYWHERE ESPECIALLY TO SOME OF THE SMALLER COMMUNITIES. THAT IS A RESULT OF ISSUES WE PLACED WITH PILOT STAFFING. I WANT TO GIVE YOU A SENSE OF THINGS WE ARE UP AGAINST. THE FACTS WE'VE DONE REASONABLY WELL AS A CITY IN AN AIRPORT BEING ABLE TO MAINTAIN AND INCREASE THE TOTAL NUMBER OF SEATS WE HAVE AVAILABLE.
THERE'S A LOT OF HEADWIND FACING SMALL COMMUNITIES LIKE ABILENE. AND THIS IS THE BIGGEST ONE. THERE ARE REGULATORY ISSUES THAT MAKE UP OTHER FACTORS. FUEL IS ALWAYS POTENTIALLY VARIABLE. HEADING DOWN AT THE MOMENT HAS BEEN HIGHER. AIRLINES ARE MAKING DECISIONS BASED ON THE COST SIDE OF THE EQUATION AND THEY ARE IN BUSINESS TO MAKE A PROFIT. THEY HAVE TO HAVE THE RIGHT AMOUNT OF REVENUE ON THE PLANE TO COVER THE COST WITH SOMETHING LEFT OVER AS PROFIT.
THEY HAVE TO MAKE THE DECISION AND WAS THE BEST WAY TO USE THE AIRPLANE? IT'S IN PLACES THAT ARE LARGER DESTINATIONS. BUT THERE ARE OPPORTUNITIES FOR SMALLER PLACES. WHAT ARE WE LOOKING AT? WE HAD THE UNITED SERVICE TO HOUSTON. WHEN THE OPERATOR BASICALLY SAID, WE DON'T HAVE PILOTS ANYMORE. SOME THINGS. T THEN HE WAS STUFF IS THE EASIEST TO LET GO OF BECAUSE IT HAD LOWER PERFORMANCE AND WAS NOT PROVEN DURING THE COVID PERIOD WHEN THEY FLUID. THEY WENT THAT WAY ABOUT IT. EVEN THE PILOTS OF THE ISSUE, THAT WAS THE ONLY ISSUE THAT DROVE THEIR DEPARTURE FROM THE HOUSTON MAP THEY ENCOURAGED TO MEET WITH THEM. WE'VE ONLY GOTTEN THE SORT OF, GIVE US ANOTHER FEW MONTHS WE WILL SEE HOW THINGS ARE GOING WITH THE PILOT HIRING AND HOW THEY ARE CHANGING. WE ARE MEETING WITH UNITED AND SKYWEST IN THE FUTURE BECAUSE WE THINK HOUSTON IS ONE OF THE OPPORTUNITIES. UNITED AIRLINES IS HELPING DENVER. WHEN WE TALKED ABOUT HOUSTON, THE GOAL WAS IF USED IN A SUCCESSFUL, MIXED PLACES IN THE OPPOSITE DIRECTION. THERE IS PART OF THE DISCUSSION WE HAD WITH UNITED. WHEN WE LOOK AT THEM FOR, WE SEE ALL THE CONNECTIONS THAT GO BEYOND.
THERE'S A LOT OF POINTS YOU HAVE TO MAKE TWO OR THREE STOPS
[00:30:02]
FROM ABILENE TO GET TO WHERE IT IS A SINGLE CONNECTION.WHAT ABOUT AMERICAN? THEY'RE ALREADY HERE. THAT'S AN EASY OBSTACLE TO OVERCOME. THEY HAVE HUBS IN PLACES LIKE PHOENIX AND CHICAGO. AN AMERICAN HAS A SUCCESSFUL MAINTENANCE BASED IN ABILENE IT'LL HELP THEM CONSIDER ABILENE WHEN TRYING TO MAKE THE PLANS FOR THE FUTURE. THEY BASICALLY TOLD IS NOT A BAD IDEA BUT WERE NOT READY FOR THAT. IN CHICAGO AND PHOENIX MAINLY ADDED INTERNATIONAL FOR SOME WHITE DESTINATIONS. BUT HAVING BEEN DETERMINING A LOT OF DOMESTIC DEFINITIONS. WITH CHICAGO, IT'S ONE OF THE EXAMPLES IF THEY WERE TO FLY TO CHICAGO AND HAD IT NONSTOP.
BEAR TAKING A FEW PEOPLE OFF OF THE EXISTING ROUTE BECAUSE THEY'RE CANNIBALIZING PEOPLE THE CHICAGO AMOUNT. WE WILL CONTINUE TO MEET WITH THEM AND WE BELIEVE IN THE MID TO LONG-TERM THERE'S DOUBLING SOME OPTIONS. AS LONG AS THE DALLAS PLAYED A STRONG AS IT IS TODAY IT GIVES US THE EXTRA ABILITY TO BASICALLY PUSH THAT. WE TALKED TO THE AIRLINES TO SAY THE DALLAS FLIGHT IS PRETTY FULL. WE ASSUME IT IS MAKING MONEY SINCE HE CONTINUED TO FILL A REASONABLY HIGH LEVEL OF SEATS. WHEN CAN WE ADD CHICAGO NUMBER ONE, NUMBER TWO? THIS IS WHAT CONNECTIVITY LOOKS LIKE BEYOND PHOENIX AND CHICAGO ON AMERICAN. OTHER AIRLINES MEET WITH THE LEGION. IT IS ONE OF MY FAVORITES. THEY ARE NOT HUGE IN TEXAS. MY MAP MAKES IT LOOK LIKE THEY ARE, BUT IT'S MOSTLY AUSTIN. THEY FLY TO HOUSTON HOBBY AND SAN ANTONIO AND SMALLER PLACES LIKE -- AND EL PASO AND --. WE LOOK AT THE PLACES THAT ARE ON THE LIST THAT ARE HIGHEST LIKE LAS VEGAS AND ORLANDO. AND DELAY.
THEY FLY TO SOME OF THOSE PLACES. WE HAD POSITIVE CONVERSATIONS WITH THEM OVER THE LAST FEW CONFERENCES OVER THE LAST YEAR OR SO. THERE HAVE BEEN LOW-COST AIRLINES WITH CHALLENGES LATELY. BIGGEST CHALLENGE THEY HAD SOME OF THE DELIVERIES WILL BE DELAYED. WE MEET REGULARLY WITH FRONTIER. THEY WENT FROM 113 TO 190. IT'S NOT IMPOSSIBLE TO MAKE SOMETHING WORK. BUT THEY FLED AUSTIN AND HOUSTON AND DALLAS SAN ANTONIO AND EL PASO. THEY FLEW TO SMALLER PLACES BUT IT WAS WHEN THEY WERE FLYING SMALLER AIRCRAFT'S. THE CONNECTION TO DENVER WITH THE HELP AND BEYOND COULD BE A POSITIVE IN TERMS OF GENERATING ENOUGH PASSENGERS TO FILL PLANES. WE CONTINUE MEETING WITH THEM. BUT I WANT TO LET YOU KNOW THE CHALLENGES WE HAVE WITH MEETINGS. THEY ARE PRETTY NEW. THEY HAVE BASES ON THE EAST COAST AND WEST COAST. THEY ALSO FLY TO BROWNSVILLE. THEY BEEN DOING COMBINATIONS OF ORLANDO AND BURBANK AND L.A. SUBURB. AND LAS VEGAS. NOT PRESENTLY BUT PREVIOUSLY. WHEN ANALYZING THE NUMBERS, IT IS ACTUALLY NOT TOO BAD SO FAR. THEY'VE BEEN DOING REASONABLY WELL. WHEN WE MEET WITH AN AIRLINE, WHAT THE AIRLINE IS LOOKING FOR. IF SOMETHING WORKS, WHAT'S THE NEXT BEST VERSION OF WHAT WORKS? WE HOPE IT SERVES THE PLACES LIKE ORLANDO AND L.A. AND LAS VEGAS. WE MAY BE ABLE TO GET THEM TO CONSIDER ABILENE. BE HAPPY TO TAKE QUESTIONS AFTERWARDS AT THE END. WEST OF MISSISSIPPIAN GEOGRAPHY. WE WILL MEET WITH THEM AND AT THE SAME TIME IT IS A LONG FLIGHT FOR THE REGIONAL AIRCRAFT THEY CONSIDER FLYING. WE HAVE A HUB IN SALT LAKE CITY BUT THE NUMBERS ARE NOT BIG FOR SALT LAKE. IT IS A HARD SELL. FOR LOS ANGELES, AMERICAN, UNITED, DELTA AND SOUTHWEST, NOBODY REALLY OWNS IT. THEY HAVE A CONNECTION THERE AND BEYOND. I'LL ALMOST BE HAPPY WITH THE LOW-COST AIRLINE FLYING IN A MORE LEISURELY WAY A FEW DAYS A WEEK THEN TRYING TO GET IT ONE OF THE AIRLINES TO FLY EVERY SINGLE DAY. CHARLOTTE ON AMERICAN. YOU'LL BE FLYING DALLAS. 1100 MILES AWAY A BIT LONG FOR THE AIRCRAFT. PHILADELPHIA. WE HAVE DEMAND
[00:35:01]
FOR SERVICES OF THE NORTHEAST. IT'S ALMOST 1500 MILES AWAY WITH A LONG WAY TO GO. NOT A LOT OF CONNECTIVITY BEYOND.THEY SERVE WINE ASIA VERY WELL. THEY'RE NOT BIG FOR ABILENE AND IT'S A HARD SELL TO GET THEM TO CONSIDER THOSE AS OPPOSED TO THE ONES WE TALKED ABOUT A FEW MOMENTS AGO. WHAT ABOUT SOUTHWEST? THEY FLY THE BIGGER PLACES WITHIN THE U.S.
WITH EXCEPTIONS. SUMMER IN TEXAS BECAUSE SOUTHWEST STARTED IN TEXAS AND FLY TO PLACES LIKE CORPUS CHRISTI. IF THEY HADN'T STARTED IN TEXAS, AS A POSSIBLE THEY MAY CONSIDER US? THERE WILL BE CHANGES TO THE RIGHT AMOUNT WHICH AFFECTS SERVICES IN DALLAS COMING UP. TEXAS OPTIONS BECOME MORE OF A POSSIBILITY. THERE ARE PLACES THAT ARE BIGGER THAN WHERE THEY DON'T HAVE SELFLESS SERVICE. THEY USUALLY GIVE US A FRIENDLY BUT NO, LET'S TALK ABOUT IT AGAIN AND A FEW MONTHS SORT OF A DISCUSSION. I'LL BE HAPPY TO ANSWER ANY QUESTIONS YOU MAY
HAVE ABOUT THAT? PAVEMENT. >> THEY ARE GOING IN AND OUT OF MIDLAND AND LUBBOCK, CORRECT?
>> YES. >> WHAT'S THE LIKELIHOOD THEY WANT TO COME HERE TO ONE HALF HOURS AWAY? BID FOR THE BIGGEST
BENEFIT --. >> THE BIGGEST BENEFIT THEY WOULD HAVE, THEY CAN GO TO DFW INSTEAD OF LOVE. AND ESTABLISH A BASE HERE. WHEN THEY BEGIN A CITY, THEY DON'T START ONE DESTINATION. THEY START WITH TWO OR THREE AND MULTIPLE FLIGHTS A DAY. ALL THOSE PEOPLE GOING TO OTHER DESTINATIONS. IF THEY WERE TO COME HERE, THE NUMBER OF PASSENGERS AND PERCENTAGE THAT THEY USED ABI GOES UP SUBSTANTIALLY IN THE EVENT THEY WOULD --. THEY MAINTAIN LOW AIRPORT COSTS. IT IS A GREAT AIRPORT. WHENEVER WE TALK TO AIRLINES, ESPECIALLY LOW-COST AIRLINES, THEY LOOK AT WHAT THE COSTS ARE. IT'S BEEN A POSITIVE NUMBER. GENERALLY WELL RECEIVED. WE HAVE BIGGER AVERAGE PLANES THAN WE USED TO WHEN WE HAD 50 SEATERS. MAINTAINING A LOAD FACTOR ON THE ANNUAL BASIS OF ABOUT 80%. IT WAS HIGHER TOWARDS THE END OF THE TIME IN THE 50S THAT WE ARE FILLING OUT MOST OF THE 76 CEDAR THAT IS A GOOD THING. IT ENCOURAGES THE AMERICA TO KEEP THE CAPACITY AND. PLUS OR MINUS. HISTORICALLY HIGH FEARS.
THEY ARE HIGHER HERE IN DALLAS THAN OTHER AIRPORTS. IF THE FARE IS RELATIVELY HIGH, IN ABILENE, IT'LL ESSENTIALLY ALLOW US TO EARN EXTRA FUNDING. AND REVENUE FOR THE COST OF THE FLIGHT. WE HAVE ONE FACTOR IN TOWN THAT IS A BLESSING AND A CURSE. AT THE VERY LEAST, AMERICANS WILL FLY A FEW FLIGHTS HERE TO MAINTAIN THE AIRCRAFT. WE ARE ABOVE THE LEVEL TODAY AS WE HAVE BEEN FOR A WHILE. IT'S NOT MAINTENANCE THAT IS NECESSARY BUT PASSENGERS THAT WANT TO FLY.
IT'LL CAUSE AMERICANS TO LEAVE. IF THEY CAME IN AND TOOK PASSENGERS AWAY FROM AMERICAN, THE MAINTENANCE BASE GIVES THEM A STRONGER INCLINATION TO WANT TO STAY.
THEY WILL COME INTO ANY CITY IN THE EXISTING AIRLINES FOR REASONS ECONOMICS DON'T WORK ANYMORE. IN A MINOR WAY, DISCOURAGES OTHER AIRLINES IN PART BECAUSE THEY KNOW AMERICAN WILL KEEP A CERTAIN LEVEL OF SIX NO MATTER WHAT. WE WILL TRY THIS NEW DESTINATION. THEY BUILD CASES SAYING THERE ARE FIVE FLIGHTS TODAY. IT'LL PROBABLY GO TO FOUR OR THREE FLIGHTS WHICH CHANGES THE ECONOMICS BUT IT IS A BIT OF A ROLL OF THE DICE. AS LONG AS THE MAINTENANCE BASES THERE, OTHER AIRLINES KNOW IT'LL BE MORE INCLINED TO STAY THEN LEAVE OR REDUCED TO A CERTAIN LEVEL. WHAT ELSE CAN WE DO AS A COMMUNITY? THE LOW AIRPORT COSTS I TALKED ABOUT. MEET WITH AIRLINES AND CONFERENCES AND AT HEADQUARTERS DOING VIDEOCONFERENCES. WE HAVE PLANS FOR THAT FOR THE NEXT FEW
[00:40:02]
MONTHS RELATED HERE. WE OFFER INCENTIVES. N-TERMINAL RENTS WHEN THEY TYPICALLY COME IN FOR THE FIRST TIME. IT STARTS OFF SLOW AND BUILDS UP BUT OFFERING REDUCTIONS IN COST AS AN ENCOURAGEMENT TO COME IN AND THEY BECOME ESTABLISHED AND ARE BACK TO PAYING THE FEES AND CHARGES. AND OFFERING MARKETING SUPPORT AND IT AIRLINES. THIS IS FLYING FROM HERE TO HERE SO LET'S DO WHAT WE CAN TO SUPPORT THE NEW AIRLINE TO KEEP THEM HERE IN THE CITY. THAT'S PRETTY MUCH WHAT I WANT TO PUT IN FRONT OF YOU. WE GOT SOME TIME FOR QUESTIONS AND ANSWERS IF ANYBODY HAS ANY.>> ARE THERE ANY ROUTES THEY CAN USE OUT OF ABILENE OTHER THAN DFW, THAT'LL BE PROFITABLE.
>> IN THE PHOENIX AND CHICAGO CASE. BECAUSE ENOUGH DEMAND GOES TO CHICAGO BUT ON THE CONNECTED POINTS BEYOND. AND THE SAME THING FOR PHOENIX. THERE'S A CERTAIN POINTS WHERE YOU HAVE TOO MANY FLIGHTS AT DFW. YOU NOTICE THAT THE BANK SYSTEM THERE. THERE'S ONLY SO MANY BANKS YOU CAN HAVE SO THERE'S A POINTS WHERE YOU REACH THE MAXIMUM LIMIT. FIVE IS NOT THE MAXIMUM LIMIT. PROBABLY MORE LIKE SEVEN. FIVE IS GOOD, SIX MIGHT BE BETTER BUT SEVEN MIGHT BE TOO MANY.
HOW CAN WE GET PEOPLE GOING BEYOND? I'M GOING TO FLY OVER TO DFW TO GET BACK TO NASHVILLE LATER THIS EVENING. I COULD CONNECT TO CHICAGO TO GET BACK TO NASHVILLE. WHEN WE TALK WITH AMERICA, THE FIRST THING WE ASK IS HOUSE DFW DOING? ARE THERE ANY ISSUES OR CERTAIN TIMES OF DAY THAT DON'T WORK? HERE'S THE LATEST THOUGHTS ON OTHER OPPORTUNITIES AND THEY WILL OFTEN BRING UP CHICAGO AND PHOENIX WHEN WE MEET WITH
AMERICAN SPECIFICALLY. >> APPRECIATE YOU COMING AND SHARING THIS WITH US. IN THE AMERICAN FLIGHT STRATEGY MOVING FORWARD, YOU WERE SAYING SOMETHING ABOUT THEY WERE CONCERNED ABOUT CANNIBALIZING THE CUSTOMERS? AND OVERSTEPPING THAT GO TO SOMEPLACE ELSE. IS THE CONCERN MOSTLY AWARE IF CANNIBALIZING CUSTOMERS FOR THE CONVENIENCE OF THE CUSTOMERS? THEY LOOK AT THE CUSTOMERS EITHER WAY.
THERE NEEDS TO BE ANALYTICS BASED ON THAT. WE CAN OFFER FLOODS THAT SAY DENVER OR PHOENIX. THEY WILL STILL GET
THE TICKETS. >> I FLEW IN HERE FROM NEW YORK LAGUARDIA YESTERDAY. I'M GLAD TO BE HERE. I WAS A LITTLE WORRIED AT ONE POINT. BUT I COULD HAVE FLOWN TO DALLAS FROM LAGUARDIA ON A NUMBER OF AIRLINES. I HAD MANY DIFFERENT CHOICES. THE PIECE THAT HAPPENS. IF SOMEBODY TRIES TO DFW, AMERICANS ARE BIGGER FISH THEY ARE. BUT THEY HAVE OTHER AIRLINES TO CHOOSE FROM ESPECIALLY LARGER DESTINATIONS. FROM MY PERSPECTIVE, THEY ARE WORRIED ABOUT CANNIBALIZING THEIR OWN EXISTING CUSTOMERS. WHAT STOPS THEM FROM CANNIBALIZING THEM AS IF WE'RE SOULFUL ON THE EXISTING DALLAS ROUTE ULTIMATELY CANNIBALIZATION DOESN'T MATTER. IT IS CALLED MARKET STIMULATION. X IS THE NUMBER TODAY FOR PEOPLE GO TO CHICAGO FROM ABILENE. BY HAVING THE NONSTOP FLIGHT IS X +50%. YOU GET A LITTLE BIT BACK. AT THE SAME TIME HE POTENTIALLY LOSE SOME. PART OF IT IS COMPETITION AND PART OF IT IS THE GEOGRAPHY. CHICAGO IS NOT EXACTLY RIGHT OVER DFW BUT IT'LL DEFINITELY TAKE PEOPLE AWAY AND EVEN PHOENIX WOULD AS PEOPLE GO TO DFW TO FLY WEST.
I'M NOT SURE IF I FULLY ANSWERED YOUR QUESTION?
>> IF THEY ARE TRYING TO GROW THE BUSINESS IN SEGMENT, THEY WOULD GO AFTER THE PEOPLE THAT ARE POTENTIALLY GOING TO LEFT FIELD. DOWN HERE. YOU CAN GAIN THAT PERCENTAGE BACK IF YOU OFFERED A GREATER COVERAGE OUT OF ABILENE. THAT'S WHAT
[00:45:02]
I'M SAYING. IN ORDER TO GROW THE MARKET SEGMENT, YOU HAVE TO HAVE ANALYTICS THAT SAY , WE HAVE A ONE STRING BANJO SO TO SPEAK. WE ARE GOING TO DFW. ANALYTICS GOING FROM HERE TO PHOENIX AND CHICAGO AND DENVER IS SOMETHING THEY SHOULD LOOK AT. IN MY PERSPECTIVE. YOU SAY IT IS AND INCREASE COSTS.OUT OF DFW. GENERALLY SPEAKING FROM WHAT I'VE SEEN.
ON THE ANALYTICS I UNDERSTAND THE COST WITH THE SEAT IN THE PLAN MOVING FORWARD. THEY NEED TO HAVE SOME SORT OF ANALYTICS THAT SAY, IT COSTS ME ASKED TO DRIVE THREE HOURS AND I MAY NOT GET THERE IN THREE HOURS. I HAVE TO HAVE A HOTEL ROOM AND FOOD. THE COST BASE ANALYSIS ESPECIALLY FOR MY PERSPECTIVE AND I HAD IT BOTH WAYS. I'VE DRIVEN TO DALLAS AND FROM DALLAS. THEY NEED TO GO INTO CONSIDERATION. IT CANNOT SIMPLY BE THIS FLIGHT FROM ABILENE WILL BE $680 IF THE FLUID OUT OF DALLAS IT IS $450. YOUR TIME IS WORTH SOMETHING AND THE NUMBERS NEED TO BE REFLECT THAT IN THERE SOMEWHERE. JUST A REGULAR TRIP TO DALLAS AND BACK, WHAT IS IT ENTAIL? IT IS 200 MILES. IT IS AND INCLUDE THE POTENTIAL OF TRAFFIC OR CONSTRUCTION. OR CONSTRUCTION. IT HINDERS YOU FROM HAVING THAT FLOW BETWEEN DFW AND --. YOU CANNOT EARMARK THE FLIGHT COST AS THE SOLE BASIS TO SAY, IT COSTS MORE BECAUSE THEY ARGUE THE FACT COST A WHOLE LOT MORE IF YOU MISS YOUR FLIGHT AT DALLAS. THEY WILL GO UP.
>> I SEE WHAT YOU'RE SAYING. PART OF MY JOB. I REPRESENT THE ABILENE AIRPORT. BUT PART OF MY JOB IS TO UNDERSTAND THINKING ON THE OTHER SIDE. LET ME GIVE YOU PEACE OF HOW THE FAIR DECISION GETS MADE. SMALL COMMUNITIES WHEN THEY FLY TO THE HUB WILL COST YOU MORE TYPICALLY SPEAKING. I'LL GIVE YOU AN EXAMPLE WE WERE STARTING TODAY BACK AT THE AIRPORT. IF YOU WANT TO FLY FROM HERE TO LAS VEGAS, ANY LOOK AT THE FAIR FROM ABILENE TO LAS VEGAS, THERE ARE BETWEEN THE TWO DALLAS AIRPORTS, I'M GOING TO GUESS SEVEN AIRLINES FROM DALLAS AND FORT WORTH THE FAIR FROM HERE TO VEGAS IS HIGHER THAN THE FACT THE COMPETITION IS FORCING THE PRICE DOWN. THE OPPOSITE EXAMPLE SALT LAKE CITY. I THINK ONLY DELTA FLIES SALT LAKE CITY FROM THE DALLAS AREA. THEY WERE ONLY SLIGHTLY HIGHER THAN WHAT WE SAW FROM THE DALLAS AREA TO SALT LAKE CITY. THERE IS A PIECE OF WHAT YOU DESCRIBE. WHEN THE AIRLINES MAKE THEIR PRICING DECISION IT IS STRIVEN BY COMPETITION.
AIRLINES COME AND GO SOMETIMES. WE CANNOT GET ENOUGH PASSENGERS AND SUCH. IT IS A MIX OF WHAT YOU SAY IN THE
COMPETITIVE FACTOR. >> THIS IS PART OF WHAT IS A MARKETING PROGRAM AS WELL. YOU HAVE TO CONSIDER NOT JUST THE COST OF AIRFARE BUT THE COST OF THE DRIVE OVER AND BACK WE'VE DONE VARIOUS MARKETING CAMPAIGNS TO STRESS THAT.
THAT'LL BE IN CONTINUAL CHALLENGE FOR US.
>> AND I APPRECIATE THAT. IT'S A MATTER OF KNOWING WHO THE CUSTOMERS ARE. AND NUMBER TWO, THE CONVENIENCE OF THAT
[00:50:02]
ROUTES. IT WAS A BIG HINDRANCE FOR US . WHENEVER WE GOT NORTH OF THE PLANE, WE LOST FLIGHTS. THAT'S 10:00 FLIGHT OUT OF DFW GETTING ITS ABILENE, THERE WERE PEOPLE. BECAUSE IT WAS OVERBOOKED. THEY ARE SITTING THERE AND THEY CANNOT LEAVE UNTIL THE NEXT DAY. ANY HAVE SOMEBODY LIKE ME COME UP THERE AS A STANDBY. AND I'M HELPING PEOPLE DOWN THE LIST.WHEN WE GOT MORE FLIGHTS IT HELPED THEM OUT TREMENDOUSLY.
KEEP THINKING ABOUT THE SLIDE THAT SAID. THE SHORTAGE OF PILOTS WITH THE KEY REASON FOR THESE CHANGES. IS THERE ANY DISCUSSION? WITH THE CURRENT SHORTAGE CONTINUING IN POST-PANDEMIC. WITH A LOOK AT REDUCING THE 1500 HOURS.
>> THAT'S AN EXCELLENT QUESTION. SENATOR SCHUMER USES -- HE IS A SENIOR SENATOR. SHE IS VERY SUPPORTIVE OF THIS.
WHATEVER THE VARIOUS AVIATION ORGANIZATIONS TRY TO MOVE THE NEEDLE DOWN A LITTLE BIT. IMMEDIATELY, THE VICTIMS FAMILIES GET BROUGHT UP. THE DISCUSSION COMES TO A QUICK END. THERE MAY BE A POINT WHERE IT IS NOT MUCH OF A FACTOR. THERE ARE OTHER THINGS THAT MAY HAPPEN THAT COULD HELP. BUT OTHER NEGATIVES AS WELL. THE PILOT UNIONS GENERALLY DON'T WANT TO SEE THE NUMBER PRODUCED. EVEN THOUGH BEFORE 2013, 250 HOURS WAS THE STANDARD ALL THOSE PEOPLE WORKED WITH. THERE ARE FACTORS AT A BIGGER PICTURE LEVEL WITH AN IMPACT ON THIS. THERE WERE MOVEMENTS TO CHANGE THAT A LITTLE BIT. AT THE SAME TIME, AIRLINES HAVE BEEN COPING BY DOING WHAT IS TO ATTRACT MORE PEOPLE TO BECOME PILOTS.
WHEN I WAS A STUDENT, I GRADUATED FROM A UNIVERSITY IN 1991. I HEARD MANY STORIES ABOUT HOW LOW PILOT PAY WAS FOR THE FIRST 10 YEARS AND HOW OFTEN YOU CANNOT GET A JOB SO YOU ARE IN THE MILITARY FIRST. IT IS A TOTALLY DIFFERENT STORY TODAY. IF YOU HAVE A HEARTBEAT AND 1500 HOURS, YOU CAN BE A PILOT AND THE PAY STARTED FIFTH -- AT SIX FIGURES. I HAVE A 13 AND 14-YEAR-OLD. AND IT'S NOT SOMETHING I HAVEN'T
CONSIDERED. >> THAT'S A LEGISLATIVE ISSUE IN CONGRESS. WORKING ON THE FAA REAUTHORIZATION. WHICH WE AUTHORIZES THE EXISTENCE OF THE PROGRAMS FOR THE NEXT FIVE YEARS. THE SENATE BILL FROM WHAT I UNDERSTAND IS EVERYTHING IS ENTRAPPED RIGHT NOW. THERE IS AN ATTEMPT AND MORE SIMULATED HOURS TO GET THE 1500. TO GET TO THE 1500 MARK.
IT'S EASIER TO GET CERTAINLY CHEAPER.
>> IT'S A LOT OF MONEY. IN A CONTEXT FROM BEFORE 2013, IT'LL BE ALMOST IMPOSSIBLE. THE BENEFIT FOR PILOTS ALTHOUGH IT RAISES THE AIRFARE IS THAT WAGES HAVE GONE UP SUBSTANTIALLY AND BASICALLY THE LAST 10 YEARS. THAT IS IN PART TO ATTRACT MORE PEOPLE AND YOU NEED PAYBACK ON THE TRAINING COST TIME AND EXPENSES THAT EXIST NOW.
>> TO BOTH THE LEFT AND THE RIGHT HAVE TO HAVE 1500 HOURS?
>> THE RIGHT IS THE COPILOT AND THE CAPTAIN TYPICALLY HAS MY. BUT IT'S A MINIMUMFOR EITHER TWO SEATS. YOU CAN HAVE PEOPLE WITH EXACTLY THE SAME NUMBER BUT IT HAS TO BE AT LEAST 1500. THE CAPTAIN HAS A LOT MORE ALREADY BECAUSE THEY BEEN DOING IT FOR A LONG TIME THE MINIMUM HAS HISTORICALLY BEEN 250 AND IS NOT RADICALLY DIFFERENT FROM OTHER COUNTRIES.
>> I THINK YOU HAVE A QUESTION.
[00:55:27]
UNDERSTAND YOUR QUESTION, YOU SAY. WHAT WAYS ARE THERE TO REDUCE LEAKAGE? THERE ARE SEVERAL WAYS TO REDUCE LEAKAGE.THE NUMBER ONE WAY IS TO ADD MORE FLIGHTS TO THE EXISTING DESTINATION. NEXT WAY IS ADD MORE FLIGHTS TO THE SAME AIRLINE ANY DESTINATION THAT'LL ENCOURAGE PEOPLE TO NOT GO TO THE -- AIR FORCE. BIGGEST WAY IS TO FIND OTHER AIRLINES TO FLY. AS SOON AS YOU HAVE MORE COMPETITION, THE FARE GOES DOWN. WHEN IT GOES DOWN, MORE PEOPLE WANT FLYING THE AIRPORT WHERE THE FARE GOES DOWN. YOU HAVE MULTIPLE FACTORS IN THE MORE YOU GET TO WORK TOGETHER, THE BETTER. YOU LOOK AT LARGER AIRPORTS IN TEXAS BUT NOT THE BIGGEST ONES. PLACES LIKE EL PASO HAVE MORE AIRLINES THAT FLY THERE. AVERAGE FARES ARE LOWER IN PART BECAUSE OF THE LOWER COMPETITION. WE LOVE OTHER AIRLINES TO FLY HERE, TOO. LET'S SAY YOU WANT TO GO TO ORLANDO. YOU CAN FLY OVER TO DALLAS. AT THAT POINT, BOTH AIRLINES ARE COMPETING FOR YOUR DOLLAR TO GET YOU TO GO TO THAT DESTINATION. WHEN YOU HAVE THIS COMPETITION, IT LOWERS THE FAIR AND REDUCES LEAKAGE. MORE PEOPLE ARE USING THE LOCAL AIRPORT. THERE'S A CERTAIN POINT WHERE TOPS OUT. 23% NUMBER WE HAVE, THERE IS DEFINITELY ROOM FOR
>> I WOULD SAY, YES. THE FIRST FACTOR PEOPLE LOOK AT IS THE PRICE. WHAT IS THE DESTINATION OPTIONS AND HOW MANY FREQUENCIES ARE THERE? AND THEN THE FREQUENT FLYER PROGRAMS. IT'S NOT THE ONLY FACTOR BUT IT IS PROBABLY THE BIGGEST FACTOR. WHEN PEOPLE MAKE A DECISION FOR THE AIRLINE TRIP ESPECIALLY WITH MORE THAN ONE PERSON. IF THE PRICE IS THIS ON ONE PLACE WITH US ON THIS ONE. IT HAS A BIG ADVANTAGE OVER THAT BUT NOT THE ONLY ADVANTAGE.
>> THERE WILL OFTEN BE A CLAIM. WE WILL RUN OUT OF SOMETHING AND SOMETIMES IT'S TRUE. BUT SOMETIMES WE FIND OPPORTUNITIES AT THE STATE AND FEDERAL LEVEL TO COPE WITH THAT. THERE ARE PARTS OF THE COUNTRY WERE AIR-TRAFFIC CONTROLLER ISSUES ARE A MUCH BIGGER DEAL. WE HAVE A COMBINATION OF WIDE-OPEN SPACES AND SEPARATION OF MAJOR AIRPORTS. THE BIGGEST FACTOR SINCE 1990 HAS BEEN IMPROVEMENTS IN TECHNOLOGY. A LOT OF AIR-TRAFFIC CONTROL PLACES USES HANDWRITTEN PAPER AND OTHER THINGS TO SHOW HOW THEY ARE MOVING TO THE OTHER SYSTEM. WE WILL PROBABLY SEE ADDITIONAL IMPROVEMENTS.
>> THEY QUESTIONED THE NEW TRANSPONDER CODE. MAKES THE
SEPARATION TIGHTER. CORRECT? >> I DON'T KNOW ENOUGH TO PULL FORWARD ON THAT WITH CERTAINTY. THAT'S THE INTENSE AND THE
WEIGHTS BEEN CHAMPIONED. >> AND LAST QUESTIONS? THANK YOU FOR LETTING ME TAKE SOME OF YOUR TIME.
>> HEADING DOWN THE AGENDA. WE HAVE DEVOTED OUR PROGRAM TO
[01:00:03]
LEARN -- WE HAVE DEVOTED OUR PROGRAM TO MARTIN KAMMERMAN.WE DON'T HAVE ANY DISCUSSION, ACTION, OR EXECUTIVE SESSIONS TO GO FOR TODAY. IF WE DO NOT HAVE ANYTHING ELSE, HAPPY VALENTINE'S DAY! CAN I GET A MOTION TO
* This transcript was compiled from uncorrected Closed Captioning.