High hopes for airport dashed again
Discount airline Flyglobespan bankrupt, as global economy takes nosedive
December 18, 2009
Steve Arnold
The Hamilton Spectator
http://www.thespec.com/News/Business/article/693110
The cherished dream of turning Hamilton airport into a passenger destination has been battered again - but supporters refuse to let it die.
On Wednesday bankruptcy claimed Flyglobespan, the discount airline that for the past three years offered a seasonal service linking Hamilton with destinations in Britain. It was a good service providing five flights a week to British destinations during the season that ended in September. In the end, however, a bad world economy made it vulnerable, and investor skittishness meant it couldn't get desperately needed financing.
"This wasn't a Hamilton issue, it's a global economy issue," airport president and CEO Richard Koroscil said yesterday. "All kinds of airlines have experienced problems like this."
Despite Koroscil's stubborn hopefulness, the history of Hamilton airport is littered with the wreckage of airlines that have tried offering regularly scheduled passenger service. Since 1969 alone there have been 19 such services. The shortest lasted a matter of weeks, the longest 13 years. The common theme, however, is their ultimate decision they couldn't make money flying from Hamilton. Several charter services have also come and gone.
Today, the only scheduled carrier operating here is WestJet Airlines, although it is a mere shadow of the service it was in 2000-2004 when Hamilton was the company's eastern hub. In those days passenger volume topped 1 million a year, compared to an average of 25,000 a year before WestJet.
For 2009, the final volume is expected to be about 500,000, down from 545,800 in 2008.
There are also charter services to winter sunspots.
With each new disappointment, airport officials promise to continue searching for a new carrier - in July of this year Koroscil revealed Hamilton airport was in talks with American discount carriers Southwest Airlines, JetBlue and AirTran Airways to make Hamilton their Canadian home.
All three currently operate at Buffalo Niagara International Airport, where Canadians have been flocking in growing numbers to take advantage of cheap flights.
Koroscil said those talks are continuing, but it will likely be 2011 before anything comes of them - with airlines cutting their capacity by as much as 15 per cent very few new services are going to be started until the economy turns around.
"These things always take a long time and the current conditions make them even worse," he said.
Beyond the economy, there's also the problem of much higher fees, taxes and surcharges in Canada.
"In Canada you have $80 in charges on a $100 ticket. In Buffalo it's $20. That makes it very hard to compete," he said. "Despite it all Hamilton is still here and will be here and will grow."
Joe D'Cruz, of the University of Toronto's Rotman School of Management, isn't as sure about Hamilton's passenger future. He argues that as Toronto Island airport grows, the reasons for using Hamilton will shrivel away to nothing.
"Hamilton's chances of success look much less promising than they used to," he said. "I'm much less optimistic about the chances for scheduled service from Hamilton."
On the debit side of the equation for Hamilton, D'Cruz notes the growing use of Toronto Island, the fact Hamilton is far enough away from Pearson that it's not seen as a real alternative and the fact it has never attracted enough passenger volume to be a real player.
"Even WestJet couldn't get the load factors it needed from Hamilton, and if WestJet can't do it, I don't think anyone can," he said. "The economics for Hamilton airport have always been marginal, so I don't see a significant passenger future for Hamilton. I think it will always be a marginal airport."
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