2018 was a banner year for Austin’s Bergstrom International – will Delta now declare it a focus city?

There is no question that passenger growth at Austin Bergstrom International airport has been nothing short of impressive, with a nearly 14% jump in passenger throughput in 2018 as passenger levels reached 15.8 million last year. This was the third double digit annual increase in the four years ending in 2018.

The growth story for Austin has been well documented. The technology sector is a major force of economic growth in the region, and Austin is consistently rated as one of the fastest growing cities in the US. Austin’s stature as a technology centre and its continued steady economic growth provide a certain level of attractiveness for airlines, and the business case for launching new flights is different from at other airports.

As of early Feb-2019, Austin had nonstop service to 53 destinations, 49 of which were to domestic markets. British Airways has been serving Austin from London Heathrow since 2014, and Norwegian during 2018 introduced service from the airport to London Gatwick. Lufthansa is adding service from the airport to Frankfurt in 2019, and WestJet has announced seasonal service from the airport to Calgary.

In the local market Spirit Airlines is adding Austin as a new market in 2019, and its uncharacteristically adding a higher number of destinations for a new market, introducing nine new cities from Austin between Feb-2019 and May-2019 – Baltimore/Washington, Chicago O’Hare, Denver, Detroit, Fort Lauderdale, Las Vegas, Los Angeles, New Orleans and Orlando.

With Spirit’s arrival, Austin will have service from the three US ULCCs – Allegiant Air, Frontier Airlines and now Spirit – as well as the US Big 3, Southwest Airlines, Alaska Airlines, JetBlue Airways and Sun Country Airlines. That results in Austin having representation from all the major US airlines with the exception of Hawaiian Airlines.

CHART – Southwest Airlines is the  largest operator at Austin bergstrom International ahead of the three US majorsSource: CAPA – Centre for Aviation and OAG (data: w/c 11-Feb-2019)

Southwest is Austin’s largest airline measured by passengers carried, posting a 35% share in 2018. The US Big 3 had shares ranging from 13% to 18% and Frontier and JetBlue held shares of 7% and 4%, respectively.

Even before Spirt’s arrival, Austin has solid mix of FSC and LCC representation, with low cost airlines representing around 45% of the airport’s ASKs and 49% of its system capacity as at early Feb-2019.

CHART – Austin Bergstrom International has solid mix of FSC and LCC representation, with low cost airlines this week representing 49% of the airport’s capacitySource: CAPA – Centre for Aviation and OAG (data: w/c 11-Feb-2019)

Delta Air Lines transported 2.1 million passengers through Austin in 2018, which was an 18% increase year-on-year. The airline has opted to open a new Sky Club at the airport in 2019. During the last year, various reports have surfaced indicating Delta aims to transition Austin into a focus city, joining other non-hub focus cities Cincinnati (a former hub), Raleigh Durham and Boston.

If that the case, Delta will no doubt challenge the positions American and United hold at the airport. Both airlines posted decreases in passenger share in 2018 – American’s dropped to 18.0% from 18.9%, and United’s share fell from16.3% to 13.o%. Both those airlines also have clubs at the airport.

Austin Bergstrom International airport’s passenger capacity is roughly 11 million, according to local news outlet The Statesman, and its 15.8 million passenger throughput in 2018 far surpassed those levels.

Given Austin’s prospects for continued strong passenger growth, the airline is opening nine new gates in 2019 in new section of the airport, which will bring the total number of gates to 34.

As growth in the greater Austin region shows no signs of slowing, the airport is also crafting a 20 year plan to accommodate some projections of passenger levels reaching more than 30 million by 2040. Elements of the airport’s master plan include a new terminal housing 32 additional gates. Austin’s city council has approved the USD4 billion plan, and according to the Austin Monitor, the new terminal and a pedestrian bridge linking it to the current terminal could be complete in 2025.

Austin’s current and future capital and future capital improvements join a growing number of expansion and refurbishment programs at airports across the US including Chicago O’Hare, Denver, Los Angeles, Washington Dulles and Seattle. The common challenges all those airports face is maintaining competitive costs for their respective airlines while ensuring they have ample capacity to offer a favourable customer experience.

With the opening a club in a new section of the airport featuring nine additional gates, Delta is showing its long term commitment Austin, whether the airport rises to the level of focus city or not.