The airport followed all the steps in the ASD manual.
That’s why AA is leaving after just one year.
Last week American Airlines announced it’s dropping service to Santa Maria, after barely a year.
The local media coverage did the usual stories about how consumers are in shock and how the decision was sooooo unexpected.
Shocked, indeed. Afterall, SMX followed the recommended ASD instruction manual. To the letter.
Did all the things that are “required” to get the air service they need. A local media quote:
“… The campaign to bring hub service back to Santa Maria included travel to airline headquarters, presentations on local travel data, letters of support from Central Coast businesses, and the crafting of a financial incentive package…”
That checks all the boxes. Plus, it’s a slam dunk a couple of excursions to a speed-date ASD event or two were thrown in, for good measure.
This is the boilerplate recipe sold to small airports across the country. To the letter. To their detriment – because it ignores a lot of airline economic reality.
Particularly the “local travel data” – the perfunctory “leakage” study, or a data-wallow “true market study” – documents that are breathtaking in scope and revelations. Another part of the script is that these expensive projects never – and I mean never – fall short of projecting glowing results. No discussion of potential demand downsides.
But the #1 factor here is the “financial incentive package.” That’s where the community usually gins up a whole lot of gelt to cover the airline’s risk. That’s okay, but typically it’s based on the sunshine demand data the community has eagerly paid for. A lot of the ASD “successes” recently at a few small airports also involve big incentive dollars, too often based on comfort-concocted demand projections.
In the case of Santa Maria, American operated two flights a day to Phoenix, where SMX consumers had over 100 destinational connect options. Supposedly.
AA has clocked in at SMX with a roaring 44% load factor. Shock! That’s not what the true market study indicated. How could this be so wrong?
Wonder if the “local travel data” included any analysis of the fact that just 30 minutes away, San Luis Obispo has flights to four connecting hubs and over 15 fights a day via American, Alaska and United.
Probably a safe bet that the overwhelming competition of SBP was never brought up. Probably a safe bet that this hard consumer fact never was noted as a material downside threat for success of local air service. No, sir. These typical ASD studies are advocacy, not hard data analyses.
The experience at Santa Maria is a poster child for a lot of what’s being fed small communities today.
Unfortunately, it’s an even-odds bet that the community is right now thinking about engaging another Pied Piper to find the right solution.
And they’ll find one, probably.
Consultant, that is. Not another airline.
