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EDITORIAL: Can Delaware succeed in commercial air service?

Jacob Owens October 18, 2022

I recently broke the news that Avelo Airlines, a startup low-cost carrier, was planning to return commercial air service to the First State as early as the end of this year. After Delaware spent this past summer relegated again to the unfortunate status of the only state without any kind of commercial air service after

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[caption id="attachment_226953" align="aligncenter" width="1200"]

Avelo Airlines is preparing to start commercial service from Wilmington-New Castle Airport but the initial routes are not yet known. | PHOTO COURTESY OF AVELO AIRLINES[/caption] I recently broke the news that Avelo Airlines, a startup low-cost carrier, was planning to return commercial air service to the First State as early as the end of this year. After Delaware spent this past summer relegated again to the unfortunate status of the only state without any kind of commercial air service after Frontier Airlines abandoned its latest bid, the news of Avelo’s arrival prompted a tepid response from readers and online commenters. [caption id="attachment_222223" align="alignright" width="300"]

Jacob Owens
Editor
Delaware Business Times[/caption] I can understand their skepticism, as Frontier is the eighth airline to try to make flying out of Wilmington-New Castle Airport work, only to fall by the wayside. Other failed servicers range from big names like Delta Airlines and United Airlines to now-defunct companies like Allegheny Airlines, Eastern Airlines, Skybus Airlines, Shuttle America, and more. In many ways, Frontier Airlines seemed like the perfect fit for Wilmington. It’s a growing low-cost carrier with hubs across the country and a presence in many small markets like here. Leadership expressed confidence that they could make the lower costs of a Wilmington operation work by marketing to travelers seeking to avoid bustling metro airports. But the COVID pandemic, which struck just weeks before Frontier’s return attempt was to begin, threw a major wrench into the airlines’ plans. Start of service was delayed about 10 months, and travel under COVID protocols led many potential passengers to wait out the pandemic. To its credit, Frontier was able to book nearly 12,000 passengers through Wilmington on 115 flights in 2021, pushing the airport to No. 380 most busy out of 518 U.S. commercial airports. That pushed Wilmington to a Primary Commercial Service Airport designation by the Federal Aviation Administration, and with it a significant boost in federal funding and per passenger funding. That success wasn’t enough for Frontier to stick it out here though, as it rapidly expands a network to the West Coast, Florida and the Caribbean. An airline executive told me in 2021 that they expected to see planes out of Wilmington about 80% full compared to data from its prior stint from 2015 to 2017. In the end though, Frontier never really came close to that mark, with its best month, July 2021, only reaching a load factor of 77%, according to federal transportation data. The annual average for service was 55%, meaning nearly one out of every two seats on Frontier’s flights were empty out of Wilmington. So why didn’t Frontier succeed, and can Avelo change the narrative enough to make it work? I try to subscribe to the advice of legendary investor Peter Lynch when thinking about the future: “Invest in what you know.” My experience tells me that Wilmington Airport will likely continue to be a hard sell for most travelers. I’ve never flown out of the small airport but do fly quite frequently out of Philadelphia International Airport and, on occasion, Baltimore-Washington International Airport. That’s in large part due to the sheer number of destinations available at such mega airports compared to Wilmington, which will always have a limited number of routes. It’s an obstacle that any carrier will be forced to overcome straight out of the gate, even with comparatively cheaper fares and easier door-to-gate access. Orlando makes a lot of sense as an initial destination, as a wide swath of travelers will be interested to visit Disney World, Universal Studios and other theme parks in the central Florida city. But I just cannot see such a one-destination service surviving long. Many families will visit Disney World at some point in their lives, but most don’t make it an annual trip due to its rising cost. For retirees looking to getaway for snowbird months, Orlando may not be as in demand as other Gulf or oceanside destinations like Fort Myers, Tampa, Miami or Palm Beach might. Frontier booked more than 100,000 passengers through Wilmington in 2015, with an average annual load factor of 87% when it ran two flights a day to destinations like Chicago, Denver, Atlanta, Detroit, Houston, Orlando, Tampa, and Fort Myers. Now that is a service that many locals surely would probably return to the terminal for, but are the days of such wide-ranging service in small airports over? It’s possible, as the consolidation of airlines and focus on cost-saving hubs has overtaken the industry since deregulation decades ago. Why supply so many routes through Wilmington when Frontier already has a significant presence just 30 miles up the road in Philadelphia? Avelo may well buck the trend – we’ll know more about its initial destinations after a Thursday announcement – but if history is a guide, it started with 11 destinations from Hollywood Burbank Airport in California in its first service. Its leadership has apparently kept an eye on Wilmington as a growth opportunity for the last two years, and saw its chance after Frontier scuttled their plan. If Avelo offers even a handful of regular destinations at the outset, with a local marketing campaign to push its ease of access compared to bigger airports, it’s possible that we could see six-digit passengers here again. Only time will tell if the company is willing to put that commitment to the First State.

EDITORIAL: Can Delaware succeed in commercial air service?

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