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Airline issues causing jitters

Amid reverberations caused by spiking fuel prices that have sent the airline industry spinning, industry experts and business leaders say the Myrtle Beach market should be stable - for now - but they fear what will happen if ticket prices rise.

Eventually, that could lead to route cancellations and leave tourists - especially golfers - without easy access to spend their money here.

Experts say airlines will continue to fly routes as long as they can make money on them - but to do so, airlines will have to raise prices. That's a concern for the leisure market in particular, because family vacationers are more likely to change plans because of rising prices than the business traveler.

"The challenge is very simple," said Terry Trippler, an air travel industry expert. "If they make money on an airplane, they are going to continue the route."

Once airlines stop selling enough seats at the higher prices, they will drop the route, he said.

Representatives from the largest area chamber of commerce, a golf marketing group and the county-run airport have met with an industry consultant to figure out a contingency plan if that happens.

"Given the seasonality of the market, as well as the topsy-turvy industry, we've got good reason to be nervous," said Brad Dean, president and CEO of the Myrtle Beach Area Chamber of Commerce.

An estimated 5 percent of the area's visitors fly here, though those who do are thought to spend more money than the average tourist.

Golfers make up about half of the passengers, studies have shown, and this spring golf rounds fell at the same times and in similar amounts as airport passenger numbers. Rounds are down a few percent this year, according to numbers from Myrtle Beach Golf Holiday.

So far, the Myrtle Beach International Airport has not seen mass casualties of flights, except for one company that canceled a slate of new routes before they even began. In fact, the airport has seen about the same number of passengers this year to date as last year, which was a booming year for the airport.

Still, in May, three-year-old Southern Skyways, based out of Atlanta, nixed half of its planned routes because of skyrocketing fuel prices.

Another new carrier, Myrtle Beach Direct Air & Tours, picked up one of Southern Skyways' abandoned destinations - Wilkes-Barre/Scranton, Pa. - though it has dropped flights to Florida.

Myrtle Beach officials hope they can look to carriers like Myrtle Beach Direct and Spirit Airlines, which carries nearly half of the passengers at the Myrtle Beach airport, to pick up key routes if others bolt.

"When Myrtle Beach loses an airline and tourists are left stranded ... that gives Myrtle Beach a black eye," Golf Holiday President Bill Golden said.

Not to mention the difficulty it places on passengers.

The Burda family, of Cary, Ill., had to practically replan their vacation after Southern Skyways switched their flight from a Friday to a Saturday. They had to rearrange their car rental and speak to the hotel manager to switch their reservations without a huge penalty, Brian Burda said.

"It was terrible, terrible," he said. "We didn't even think we were going. ... We were basically at the whim of when they were going to fly."

Darren Rowe, whose family flew out of Rockford, Ill., on Southern Skyways, initially booked a nonstop flight, but the airline changed it to stop over in West Virginia. When he heard about all the cancellations, he got nervous.

"We were concerned, especially on a small airline like this," he said.

While other airlines might be cutting back, a Spirit spokeswoman said the company is open to different routes if the price is right.

"We still are in a growth mode," spokeswoman Misty Pinson said. The company is happy with its Myrtle Beach routes and does not plan to change anything, she said.

Airlines affected

As fuel costs have multiplied in the past two years, airlines have tried to save money on one end while making money on the other.

"When you take an economy nationwide that is slow and add to it - I don't even know what adjective to use anymore for gas prices," said Don Schunk, an economist with Coastal Carolina University.

"You take unprecedented oil and energy and fuel prices, and you look at those things together, it doesn't look good for the airline industry. We've seen and we're going to continue to see, in general, airlines cutting back on service, fewer flights, those kinds of things," Schunk said.

Airlines such as Delta have cut regional routes that, while perhaps profitable, are not as profitable as others. Or, instead of flying three times a day between destinations, airlines are trimming to two flights to make sure every seat is full.

"The fuel keeps going up and up, and I think that all the carriers out there are evaluating their systems to see if they're going to continue certain routes," said Judy Tull, CEO of Myrtle Beach Direct.

National carriers are also slashing jobs and flights. Continental Airlines recently announced it would lay off 3,000 people, while U.S. Airways is cutting 1,700 people and United Airlines by up to 1,600.

Earlier this year, Delta and American Airlines said they would cut jobs by the thousands, too.

Many airlines have begun charging passengers piecemeal for things that used to be standard: United Airlines, U.S. Airways and others are charging $15 to check a bag, others such as Spirit Airlines are charging $5 to $20 to pick a specific seat in coach and some airlines are charging for all beverages - even water - on the flight.

Though it may save some low-maintenance passengers, several flying out of the Myrtle Beach airport on Saturday said they would rather see higher ticket prices than fees for almost every little choice.

"If they need to raise fares, I would prefer that they raise the fare so I can know what the cost is totally," said Beth Schwandt, of Toledo, Ohio, who was heading from Myrtle Beach to Detroit on Spirit Airlines.

"I would prefer them to say your cost is $20 more and not nickel and dime you," she said.

Keeping what's here

The good news for Myrtle Beach is that most of its routes are profitable, The Boyd Group, an airline consulting firm, told local business leaders last week. Even so, leaders want to approach airlines to see if they can help keep things that way.

For example, Myrtle Beach is trying to see how it can help Spirit make its Detroit route more successful, Golden said.

If an airline drops a direct route to Myrtle Beach, the business community plans to approach other airlines or carriers, such as Spirit Airlines or homegrown Myrtle Beach Direct Air & Tours, to see if they would be interested in picking up that destination.

Key markets include New York, Boston and Atlantic City, N.J.

Every incentive is on the table. The county-run airport already uses operational discounts to attract new routes, and business groups help out with advertising in feeder markets; business leaders now also want to offer revenue guarantees, which would mean the airline would get money from local sources if the route does not make enough on its own.

To that end, the county earlier this month applied for a federal grant for a $600,000 revenue guarantee program.

Myrtle Beach leaders said they were encouraged by an unsolicited call last week from the director of sales at Spirit Airlines, who said there were no planned service changes for Myrtle Beach, even though the company announced large job cuts the previous week.

"We're going to plan for the worst, hope for the best and be aware of all options," Dean said.


ONLINE

Read more about airlines and tourism in the "Inside the Industry" blog on the tourism page at MyrtleBeach Online.com.

Inside

S.C. air officials favor governing authorities | Page 1C

SPIRIT AIRLINES | 43.5 percent of passengers at MYR

Charging $15 in advance for the first checked bag ($25 at the airport) effective Friday

Thinking of laying off workers

U.S.

AIRWAYS

28 percent of passengers

Charging $15 for the first checked bag

Cutting domestic flights

Cutting 1,700 jobs

Charging for in-flight nonalcoholic drinks

DELTA | 13 percent of passengers

Grounding planes on less-profitable routes

Canceling Myrtle Beach to Cincinnati route

MYRTLE BEACH DIRECT | 5.61 percent of passengers

Canceling flights to Florida

Picking up flights to Wilkes-Barre/Scranton after they were abandoned by Southern Skyways

Charging convenience fees for making reservations over the phone and online

Charging for checked luggage

Charging $5 to pick a seat in advance

Charging $5 per bag in advance; $10 at the airport

UNITED EXPRESS | 4.5 percent

Shuttering its low-cost carrier, Ted

Charging $15 for the first checked bag

CONTINENTAL | 3.5 percent of passengers

Cutting 3,000 jobs

NORTHWEST | 2.7 percent

Switching the type of airplanes used

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