Great Falls International Airport Director Faulkner Responds
I have written two separate articles this month comparing Montana Airports. Several areas of information were covered including size, cost to fly out of the airport, primary or non primary and which ones have Essential Air Service Programs.
READ PREVIOUS ARTICLES HERE
Where Does Your Airport Rank
Why Does It Cost More
John Faulkner, Airport Director Great Falls International Airport sent me the following information to clarify some of the statements made in the previous articles. The following is directly from Mr. Faulkner and has not been edited:
I read your article “Why Is It More To Fly Out Of Great Falls & Other Airports”. I thought I would provide some additional info that you might useful.
- Airline pricing on a flight. Generally, airlines divide planes into price buckets. Small 50-seat jets may have 4 price zones from low to high while a large 280 seat jet might have more 24 different price zones. As people make reservations they buy seats out of a price zone with the low cost zones typically getting exhausted first. So, if your airport has large aircraft; there is more potential for lower price zones. Generally, airlines need to serve a market 2 or 3 times a day. This isn’t just because some people like an early flight and others can take a latter connection after work. This provides them the best feed for their hub and allows them to create a crew flow that maximizes use of their pilots. So, an airline can’t simply serve an airport with one large daily flight.
Ranking the Airports
- Bigger typically means better price. If you rank the MT airports by average ticket price in the last year, they almost perfectly line up from large to small. This is because when there are more flights and larger aircraft, there are more of those cheaper coded seats in the market that I described above. This is why Spokane and Boise likely have a cheaper average ticket than any MT airport and LAX typically has some of the cheapest avg. ticket prices in the West.
Smaller Planes vs Larger Planes
- Death of the 50-seater. For the past two decades GTF has relied nearly exclusively on 50-seat jets. While other communities grew in population, Great Falls didn’t and never outgrew these aircraft. In response to COVID, airlines bought out senior pilots and hired all the 50-seat pilots away from the regional airlines. This caused a massive shortage in small market pilots and resulted in the loss of hundreds of routes. GTF suffered a major seat shortage in this period. Locals will remember that Alaska could only fly one of their two normal daily flights, MSP flights were cancelled for 18 months and Allegiant reduced their schedule dramatically at GTF while there were problems with Canadian’s crossing the border. This link includes a Wall Street Journal article on the issues facing small airports. Read the article here. Flash forward to today and now GTF is served by no 50-seat jets. Capacity in the first half of the year is now more than 2019, so pricing is moderating. The same is largely true for Helena. If you go out on Google Flights right now and look at a summer trip at all the MT airports, the rates are really very similar.
- The airline industry relied almost entirely on leisure travel in the past two years which caused tremendous distortions. Airlines piled flights into leisure markets including Bozeman, due to proximity to national parks. Great Falls, as a community, has never really marketed itself as a national park community. Although 50% of our summer visitors report going to Glacier; the market doesn’t really know us as a national park destination. All these additional leisure seats piled into Bozeman resulted in a glut of cheaper seat codes. This happened at the same time 50-seat jets were going extinct and causing higher fares in Great Falls.
- The Facebook link above also examined growth of MT communities. Getting more seat codes is primarily a factor of having more fliers. Great Falls saw only 1% population growth from 2000 to 2020. The next closest major MT county grew at 26x that growth rate. Great Falls also now has the lowest and slowest growing median income of the large counties in MT. Flights are just part of the retail basket with the same economic rules as any other consumer good. I would suspect that groceries are cheaper in some of the other MT communities too, because they have Winco, Costco, Natural Grocers, Whole Foods, Safeway and probably others. I bet clothes are also cheaper in other MT towns because they have Kohls, Macy, H&M, Cabela’s, Sports Warehouse and others. Maybe Lowe’s is cheaper on some things than Home Depot too. Great Falls has the only closed Bed-Bath and the only closed Mattress Firm.
The lack of growth in Great Falls means that we don’t have some of the retail options that others in the state have been able to sustain. The story is similar on tourism; the other way to get seats filled. While Bozeman has seen explosive growth in hotel development, Great Falls generates the lowest number of hotel room nights of the six larger towns. This is why we say community growth is vital. More people would mean larger aircraft, more airlines and more of those lower fare codes in our market.
What isn’t a factor that you mention in your story is airport fees. Here is the 2022 survey done by the state. Airlines basically pay two fees landing fees (GTF had the lowest in the state in that report) and building rents. Please note there is an error in that report. GTF only had one rate of $17.33 – the report lists a second rate in error. Read The Report Here. What a comparison of the stats shows is that the two airports listed in your report as being expensive, GTF and HLN have the lowest airline fees. Airport costs make up only 6% of an airlines cost of flying a flight. It simply isn’t a relevant expense. The most expensive airports for airlines are typically the largest airports with the cheapest tickets like LAX and SEA. Fuel makes up over 20% of the cost of flying while their labor costs are now nearly 33% of total costs. The additional fuel and staff costs to fly from say Denver up to Great Falls is more of a factor in the profit/loss of the flight than the airport fees. Read The Report Here.
Charges and Fees
You mention passenger facility charges, which are governed by Federal Law. The law currently restricts all airports to a max of $4.50 per passenger. All MT airports and nearly all US airports charge the same $4.50. So this is not a factor at all since everyone is the same. Currently, the origin airport gets $4.50 and the destination airports get $4.50 then any connection airports split one more $4.50. There is an effort to raise or remove the cap on PFC’s so airports could charge more. GTF has been very outspoken against this plan within the industry and to MT’s elected officials. This is being discussed currently in the FAA reauthorization efforts.
Thank you to Mr. Faulkner for adding this information to the conversation. There is always more to the story.
If you have a story idea or something you want to learn more about, give Randy a call at 406-788-3003 or send me an email at firstname.lastname@example.org