John Brantley Airport Director

Better Days in Sight for RDU
Editorial: John Brantley,
Airport Director

In late 2007, the volume of U.S. air travel began to soften. By the spring of 2008, most large airlines were reducing their capacity by eliminating flights, or announcing their impending elimination, thereby taking seats out of the skies, while their regional carrier affiliates ended service to smaller communities and replaced many mainline flights. Airplanes began being parked in the desert, both old and fuel inefficient, as well as new models. The rapid increase in fuel prices beginning in the early summer of 2008 and continuing through the fall and the financial industry crisis that became widespread in the late summer greatly accelerated this activity.

Like many other airports across the country, RDU lost a significant amount of its flights and the service of two regional airlines as of Labor Day 2008. By year's end, the number of passengers had declined by 3 percent versus 2007. From a high of about 245 daily scheduled weekday flight departures in mid-2007, service declined to about 200 departures by year-end 2008 and has remained in the 190-200 range throughout the first three quarters of 2009. Again compared to mid-2007, about 2,500 seats a day in each direction (13.5 percent) have been removed from the RDU air service market. The number of passengers transiting RDU during 2009 should be about 8.9 million, or about 8.5 percent less than in 2008.

While the economy has been the greatest driver of air travel decline, some fundamental changes also have impacted those numbers. One is the decision of many businesses to make large cuts in travel and employ alternatives such as video conferencing, social media outlets and increased use of telephony and email for customer contact. This has taken many of the “road warriors” out of the air who had been flying every week, which has made more seats available for personal travelers. But they are far more price sensitive and are enticed to travel only by low air fares, which means the airlines have far less profit opportunity. Economists have long said that businesses cannot shrink themselves into profitability, but that is what most of the larger airlines are trying to do.

RDU certainly has been impacted by the changes in air travel that have occurred, but we've long known good times will be followed by bad, and vice versa, and have refused to put ourselves in a highly leveraged financial position. The Authority's financial health is very good, its double A credit rating has been maintained, and it is fully able to complete Terminal 2's development without incurring further debt. We believe it likely that an upswing in air travel is something to be optimistic about in 2011 but not next year, and thus are well prepared for more of the same in 2010.

Construction of the final phase of Terminal 2, which is about 40 percent of the total building floor area, continues on schedule toward completion at the end of 2010. Relocation of the operations of Continental and US Airways into the new section of the building should occur by the end of February 2011. By the middle of that year, some interior reconfiguration, renovation and upgrading of information technology systems in Terminal 1 will get underway. When completed in 2012, all airlines continuing operation in Terminal 1 will be quartered in the main building. At that point, the north section of that terminal where Southwest is located today will be closed. While the aircraft gates and the north concourse will continue to be usable, it is likely that this will signal the end of the road for the airport's first real terminal that opened on October 1, 1955. It will have served long and well.

As we look forward to the upcoming year-ending holidays and the pleasure that being with family and friends brings during that season, we want to say best wishes to all and may your journeys be safe and joyful wherever you may be going. Have a great trip!

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