Duluth International Airport's 'market leakage' a concernDuluth boasts a shiny new $78 million airport terminal. But a yet-to-be- finalized study shows the facility also has a significant problem. The travel consultants call it “market leakage.”
By: Peter Passi, Duluth News Tribune
Duluth boasts a shiny new $78 million airport terminal. But a yet-to-be-finalized study shows the facility also has a significant problem.
The travel consultants call it “market leakage.”
That’s a measure of how many people in an airport’s market hit the road before they hop a plane.
An initial analysis of bookings indicates that 58 percent of people living within 30 miles of Duluth International Airport choose to start their air travels from distant terminals — most often in the Twin Cities.
The statistics from the study are sobering. The last such analysis, completed in 1999, placed the Duluth airport’s market leakage rate at a much more modest 34 percent.
Despite that discouraging trajectory, some see promise in the numbers.
“It shows we’re in a position to capitalize on our market,” said Duluth International Airport Director Tom Werner. “I think it highlights that we have an opportunity to really grow. It’s not at all like we’re a tapped-out market.”
Werner noted that even at a time when more than half of local residents are beginning their air travels from distant airports, Duluth International has seen solid traffic. In 2012, the terminal handled more than 322,000 passengers — the second-highest volume in its history.
Looking at recent stats and the study, Werner observed: “We have the potential to double that.”
“I’d like to see us develop a marketing program to educate people,” said Don Monaco, owner of Monaco Air Duluth, the fixed base operator for the local airport. He wants travelers to go beyond comparing just the cost of tickets, and consider other expenses involved in flying from a distant airport.
“People need to take the time to do some research. If you do choose to drive to another airport, it’s important to think about all the costs wrapped up in that decision, including the cost of the gas you put in your car, the parking fees you pay and the value of your time,” said Brian Hanson, president and CEO of the Area Partnership for Economic Expansion, or APEX for short.
“What’s disappointing to me is that people are not always making decisions based on good information,” Monaco said, noting that too often people rely on past habits and misperceptions.
“It would be foolish to ask for people’s blind allegiance, but at least be informed,” he said.
While Duluth’s new airport is attractive and offers greater convenience and more creature comforts than its predecessor, Hanson said the new facility alone can’t be expected to sell people on flying from home.
“It provides a beautiful gateway, and it’s a great place to welcome clients and customers to our community, but whether it will convince someone to fly from Duluth is debatable,” he said, noting that most travelers today seem more driven by value and the desire to stretch their dollars as far as possible.
Hanson encourages people to be flexible, look at all their options and compare fares. In cases where the cost difference between flying from Duluth or out of a larger hub is negligible, Hanson said people would be wise to use their local airport.
“Let’s face it, the fewer of us who leak out of our market, the better service we can expect to get here,” he said. Hanson explained that with stronger traffic, Duluth will be better positioned to attract additional flight offerings and to maintain competition. The airport is served by three airlines: Delta, United and Allegiant.
The more people who use Duluth International, the stronger a case the airport can make for airlines to step up service, Werner said.
“We need to show the airlines they can make more money in our market,” he said.
The leakage analysis is expected to cost a little more than $60,000 to complete, with 20 percent of the money coming from the Duluth International Airport Authority and the remaining 80 percent provided by the Duluth-Superior Metropolitan Interstate Council.
The final market analysis report should be completed by May. It will be posted on the Duluth-Superior Metropolitan Interstate Council website.