CVG: Flights down, costs up, here's why

Why is CVG one of the most expensive airports?

HEBRON, KY (FOX19) - The Tri-State's international airport is facing one of the most challenging times in its history as cost of flights rise while the number of them decline.

A FOX19 investigation reveals that the number of passengers traveling through Cincinnati/Northern Kentucky International Airport has fallen 71% in the past decade.

In 2002, it served 20.8 million people. By 2012, that had fallen to just 6.04 million. In 2005, there were just under half a million flights per year at CVG. By 2012, there were only 143,447 flights.

"This airport is holding us back big time," Gov. John Kasich (R-Ohio) told journalists recently at a news conference with Kentucky's governor and then-Secretary of Transportation Ray LaHood. "We're right now being a captive of Delta. We've gone from I don't know how many flights a day down to just a sliver."

Some say it's the kind of crisis that can keep a city like Cincinnati from attracting more big businesses and jobs to the area.

In fact, a source who's well-connected with business people in Cincinnati tells FOX19 a company that's already located here might not have if its executives had known how hard it is to fly out of CVG, in terms of finding affordable airfares and direct flights to other regions of the country.

"Yeah, it'll be much harder to attract business to the area and keep what you have," said Janet Bednarek, a nationally known airport historian who teaches at the University of Dayton. "I've read a few things about Procter & Gamble complaining about the lack of particularly international flights out of CVG because Procter & Gamble is just all over the world. The only international flight now is to Paris. Procter & Gamble is huge in China. And that's a disincentive for Procter & Gamble."

Like the governor, Bednarek believes the time has come for CVG to disentangle itself from Delta.

So how does Delta - CVG's dominant carrier - play into that situation? Here's what the company had to say when FOX 19 asked a company spokesman.

"Delta has gone from a high of 604 peak-day departures in 2004 to 106 peak-day departures today," said Delta spokesman Anthony Black. "Cuts to the market with driven primarily by our bankruptcy (2005-2007), recession/high fuel prices (2007-2009) and fuels spikes again (2011-2012). Fuel increases, in general, made the 50-seat aircraft (operated about 350 in 2007, operate about 85 today) operationally inefficient (not profitable) and Delta is in the process of reducing its entire fleet to approximately 125 50-seaters by the end of 2015."

Our FOX19 NOW analysis found the Cincinnati/Northern Kentucky region lost 44,480 flights, or 78 percent. The national average was 19 percent. The region's main airport also lost 3.5 million seats – down 80 percent, compared to a 15 percent national decline.

This also comes at the same time, average fares at CVG increased to $519 – up 26 percent compared to just a 4 percent national increase.

Locally, some blame the years-long downsizing and price increase by the airport's dominant carrier, Delta Air Lines.

What is the airlines response? Delta's spokesman responds:

A: "Cincinnati market strength continues to be driven primarily by the business community's demand for products/services. "

FOX 19: Delta Airlines once operated its second-largest hub at CVG. What is the airlines future business plan for the airport?

A: "CVG operates as a profitable hub for Delta and we have no plans to alter its current market make-up."

FOX 19: Despite significant reductions since 2005, low-cost carriers have been reluctant to try to compete in Cincinnati because of Delta's reputation of bullying competition by Delta. What is the airlines response to this perception.

A: "Delta operates in more US markets than any carrier, so there isn't a carrier that we don't already compete with in multiple markets.

Ultimately a carriers' ability to compete comes down to the operational performance, products and services they use to attract and retain customers.

Delta offers a superior combination that cannot be duplicated (destinations, frequency, Sky Club, frequent flier program, WiFi, free entertainment, best on-time, best completion factor, fewest mishandled bags, fewest complaints)."

FOX 19: Other findings related to Cincinnati/Northern Kentucky include:The number of airlines operating from CVG dropped from eight to four in the eight-year period. Nonstop destinations dropped from 133 to 46. Delta accounted for 99 percent of the lost flights. Is this part of a bigger plan?

A: "Our goal is always to match market capacity to demand" Black said.

A recent survey showed as many as one out of three passengers at Dayton's airport is from the Cincinnati metro area.

FOX 19 also sat down with Candace McGraw, the airport's chief executive officer, to get her take on all these issues.

"As we transfer to a multi-carrier airport and you have more carriers and more competition, you're going to start to see airfares go down," McGraw said.

When FOX 19 asked about constantly high airfares,  McGraw responded: "The airport has nothing to do with airfares, the airfares are solely set by carriers, our airport costs have no relation to air fares."

McGraw added within the last year the airport welcomed new airline partners Allegiant, Frontier and Ultimate Air Shuttle. CVG has also become the fastest-growing non-vacation destination among the 105 airports that Allegiant serves.

In addition, McGraw said the dramatic growth of CVG as one of three global super-hubs for DHL shouldn't go unnoticed.

"Air cargo is an increasingly significant part of CVG's growth strategy, resulting in more jobs,"  she said.

The airport is currently the 9th-largest in North America in terms of cargo tonnage.

Finally, when FOX 19 asked about the passenger experience and financial future of CVG, McGraw said the airport was named Best Regional Airport in North America in 2014 for the fourth consecutive year, according to SkyTrax World Airport Awards.

She also noted CVG remains on solid fiscal footing too, holding 2013 operating expenses at 2007 levels. The airport, according to its annual report, was able to retire a large portion of debt earlier this year, enabling CVG to reduce landing fees by approximately 30% for 2014 and 2015.

This, according to McGraw, has given CVG a significant advantage in retaining and recruiting carriers moving forward.

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