Assessment of Contributing Factors to Air Service Loss in Small Communities

Abstract

As indicated by current literature, service at small community airports was negatively affected by the Great Recession from 2007 to 2009 and recent changes in competition structure. Existing studies have looked at the recession’s lingering impact on small community airports (e.g., hub premiums, airport dominance, connectivity) and markets (e.g., market competition structure). However, to date it has been difficult to determine which factors contribute to a market’s potential future loss of service that serves a small community. In this study, we identified characteristics that could potentially contribute to a market’s loss or gain of service by incorporating different regional- and market-specific characteristics that have evolved over the years. This study used a fixed-effects conditional logistic regression and focused on region-to-region markets serving small communities that were in service at least once between 2007 and 2013. In total, the panel data included 1,367 markets departing from a small region and arriving at a small-, medium-, or large-sized region with 453 markets adding or losing service during that time. Fixed-effects were used to identify the impact of within-market variation on service loss over the years. Results showed that, first, markets affected by a merger were indeed at a higher risk of losing service. Second, markets operated by a fuel-intensive, small-aircraft fleet had a higher chance of being discontinued. Third, an increased number of competitors greatly reduced potential market service loss.