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Indianapolis airport boardings hit 10-year low

January 18, 2013

If you thought Indianapolis International Airport didn’t seem as busy in 2012 and that tickets were pricier, you’d be correct.

Passenger boardings fell by 2.2 percent last year, to 3.68 million, assistant treasurer Marsha Stone told airport board members on Friday. That’s a low not seen since 2003, according to airport records.

And it was nearly 6 percent less than what officials had projected for 2012.

Boardings at the airport peaked in 2005, at 4.26 million.

“We continue to be challenged by falling enplanements like every other airport in the country,” said Michael Wells, airport board president.

The authority is still tallying 2012 financial data, but with fewer passengers, the airport receives less in the way of income from concessions and parking.

Airlines also are using fewer planes, which reduces landing-fee income for airports. Airline mergers have resulted in fewer flights being offered at certain airports. And that reduced aircraft capacity has left remaining flights packed to the gills.

Airport board veteran Wells said he has never seen airlines so disciplined for so long—referring to aircraft utilization rates and ticket pricing.

Such trends have sent fares skyrocketing. The average fare from Indianapolis International in mid-2012 was $391, compared with $367 in mid-2011, according to the Bureau of Transportation Statistics. That’s up substantially from $279 in the same period of 2009.

Fares for certain routes, such as New York, have been especially painful. Wells said the authority will look for ways to improve competition to such destinations. In the current airline environment, there’s often little an airport can do, however.

Changes in the industry brought by mergers and the economic slowdown came at an especially bad time for Indianapolis International. The new terminal opened in 2008, just as the slowdown hit.

Wells said the authority intends to continue its focus on cost reductions and ways to grow revenue.

Wells, president of real estate development firm REI Real Estate Services LLC, suggested that the airport might even lease some of its own offices at the midfield terminal to private parties while moving airport staff to less expensive space.

In coming weeks, the airport will unveil a revamped parking operation intended to boost parking revenue and fend off off-airport parking options. Among the changes to make airport parking more attractive will be more frequent shuttle busses to remote lots. The airport also is looking at ways to generate more money from its higher-rate, $100 million parking garage.

Longer-term goals include trying to protect revenues generated from the airport’s aircraft maintenance base. It was built in the mid-1990s for United Airlines, which later abandoned it.

After several years of sitting vacant, the airport managed to land Chicago aircraft repair company AAR Corp. It also leased repair space to Indianapolis-based Republic Airways Holdings.

AAR’s current lease agreement ends in about two years and the Authority has begun efforts to reach a new agreement that will retain AAR. The cavernous facility was built to accommodate United’s fleet when times were good, but that the facility is costly to maintain.

Wells said the airport isn’t in the business of subsidizing maintenance operators, but needs to find ways to reduce costs to make sure AAR stays put.

“To the extent we can reduce expenses, it helps everybody,” he said.

Meanwhile, the airport board Friday approved a contract for demolition this year of the old passenger terminal complex.  

The airport is trying to expedite the demolition to make it easier to entice new users to the land. The authority has had discussions with several prospective tenants. “We’ve had some pretty good interest,” Wells said.

With direct airfield access, the old terminal would be ideal for such uses as an air cargo facility.

On the upside, cargo flow at the airport—mostly flights operated from the FedEx regional hub—rose 2.6 percent in 2012.

FedEx operates its second-largest U.S. hub here, and landing fees it generates help mitigate the effects of fewer passengers.

Meanwhile, airport officials said they’ve added electric outlets and USB recharging ports in passenger waiting areas, as a way to increase convenience for passengers.

Airport director Bob Duncan noted that it’s not been uncommon to see passengers scrambling to find outlets—sometimes sprawling out on the floor next to an outlet to power a computer or recharge a wireless device.

The new outlets and charging ports are being installed between seats in several gate areas. Look for glowing blue lights on the lower half of seats.

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