Stephen Limberg, Savannah station manager for US Airways and guest speaker for the Tourism Leadership Council’s monthly meeting Thursday, was asked lots of questions about his airline’s future in Savannah.
But he also found himself fielding more than a few about another carrier.
JetBlue, a low-cost carrier that Savannah has been wooing for years, recently announced that they would be flying into the Charleston, S.C. airport instead, leaving a disappointed Savannah still without a “discount” airline.
While explaining the difference in philosophy between low-cost airlines and large legacy carriers — they operate on a point-to-point model, while the large carriers primarily operate on the hub-and-spoke model — Limberg deftly deflected specific JetBlue questions to Patrick Graham, executive director for the Savannah airport.
JetBlue’s decision came down to three factors, Graham said.
“First, Charleston has a much denser population and their ‘catchment area’ — a term describing the potential passengers within an hours’ drive of the airport — is twice as large as ours,” he said.
“Second, Charleston has a more favorable ratio of lucrative business passengers — 60 percent business to 40 percent tourist compared to Savannah’s 70 percent tourist and 30 percent business.
“Finally, while we offered an attractive package of incentives, Charleston put up more than $600,000 in direct cash subsidies.”
While he is understandably disappointed, Graham said he and his staff will continue to pursue low-cost carriers, including JetBlue.
“It will be interesting to see how the large legacy carriers such as Delta and United are able to compete in Charleston once that airport has two low-cost options,” Graham added.
Southwest Airlines also serves the Charleston airport.
Meanwhile, the number of airlines that serve Savannah/Hilton Head International Airport — and many medium-to-small airports across the country — is shrinking and could come down to three carriers should the talks between US Airways and American Airlines result in a merger, Limberg said.
Savannah is served by both US Airways and American Eagle.
“Deregulation has lowered fares, but taken us down to just a handful of legacy carriers,” Limberg told the tourism group.
“One advantage of that move would be to make the resulting airline more sustainable and better able to compete with Delta and United,” he told the group.
“It’s important to the tourism industry that airlines remain healthy,” he said. “And we need you as much as you need us.”
Indeed, such a merger would put the combined airline on par with the world’s largest, United Continental Holdings, and the slightly smaller Delta Air Lines.
US Airways’ load factor in Savannah is an above-average 80 percent, he said.
Load factors, compiled monthly by the Air Transport Association, measure the percentage of available seats that are filled with passengers. A load factor of around 75 percent is considered the norm by most airlines.
“Even if Savannah is down to three airlines, we will continue to be competitive,” Limberg said.
Many industry experts say the only way American and US Airways can compete with their larger rivals is by merging their strengths. US Airways would gain American’s lucrative international routes, while American’s larger hubs would be fed passengers from US Airways’ network in smaller cities across the nation.
American Airlines has been considering a merger since it filed for Chapter 11 bankruptcy late last year.