August 19. 2018 11:58PM

Incoming Manchester airport director sees 'eight risks' to growth

By MICHAEL COUSINEAU
New Hampshire Union Leader


Travelers hustle through Manchester-Boston Regional Airport on Aug 10. The airport's incoming director says the growth of Boston-Logan International Airport is not good for Manchester. (DAVID LANE/UNION LEADER)

MANCHESTER — The incoming airport director for the state’s largest airport listed “eight risks” to developing more flights, including high operating costs.

The cost per departing passenger at Manchester-Boston Regional Airport was $13.45 in 2017 compared to $12.35 at T.F. Green Airport in Rhode Island and $14.78 at Boston’s Logan International Airport, according to Theodore “Ted” Kitchens, who last week was awarded the job that he will start Oct. 1.

That figure represents all airline payments made to an airport divided by the number of departing passengers.

Manchester’s rate was 68 percent higher than the national small hub average, according to Kitchens’ report and represents a key industry metric.

“I consider this a high risk to air service development,” Kitchens wrote in an 11-page report he presented the search committee interviewing him for the job.

For Manchester, it’s a function of fewer departing passengers in recent years while facing many of the same fixed costs to run the airport, he said.

After peaking at 4.33 million passengers in 2005, the state’s largest airport has seen its passenger numbers decline every year, dipping below 2 million fliers last year. For the first six months of this year, passenger totals are 2.1 percent below last year’s figures.

Patrick Duffy, a member of the search committee that chose Kitchens and who also served on the Manchester Airport Authority from 1990 to 2000, agreed cost is an issue.

“At one time, Manchester was very, very competitive on a cost factor,” Duffy said. “However, over time, that has reversed.”

Kitchens cites three regional level risks, including a reduction in the area’s population and wages.

“The region has done exceptionally well in increasing regional wages and this needs to continue so that additional enplanements are generated,” Kitchens wrote. “Any reversal in this trend and the demand for air service will drop.”

He also cites airport competition.

“A growing Boston-Logan International Airport is not good for Manchester-Boston Regional Airport,” Kitchens wrote. Since 2010, the average one-way fare out of Logan increased 3 percent versus 21 percent out of Manchester and 10 percent out of T.F. Green.

Meanwhile, Logan saw a 41 percent increase in departing passengers during that time compared to a 33 percent drop at Manchester and a 10 percent decrease for T.F. Green.

According to federal figures for the first quarter of this year, the average domestic round trip airfare was $308.86 out of T.F. Green, $323.31 for Logan and $370.02 for Manchester.

Kitchens also lists four industry-level risks, including continued industry consolidation of airlines, which he thinks is over for domestic airlines.

Other industry-level risks included high fuel prices, pilot shortages and continued concentration of adding more flights into large hub airports.

Kitchens said his impression of Manchester’s airport is “very positive.”

“I believe the market is solid and is improving through the diversification of the regional economy, growth in the knowledge and creative class, and increasing regional per capita and household incomes,” Kitchens wrote.

“Having all Big Four carriers is a major strength of the market and something that very few small hub airports can claim,” Kitchens wrote.

Those airlines are Southwest, United, American and Delta.

Asked about Kitchens reversing airport trends, search committee member Liz Hitchcock said: “I don’t think it will be an easy task. I think he will work at it very methodically.”