2004 Passenger Demand Analysis Report

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w~ Section 8 Situation Analysis .~ .~ ,~. Eugene Airport has shown steady progress over the past year. The improvement in retention of domestic w~ air travelers from 52.1 percent during the prior year to 55.4 percent is an impressive improvement. Changing travel habits and negating the natural advantages of a nearby major airport is accomplished in ~,:~ small steady steps. Though retention of international travelers declined slightly, 0.4 percent, it seems to -=r""~ have plateaued. There appears to bean opportunity for improvement in this area since Portland International Airport has limited direct international service. The larger array of international service at `-~ San Francisco or Seattle can be as easily accessed using Eugene Airport's air service as would be the ;-~ case at Portland International Airport. Also, the domestic retention improvement had the benefit of only seven months of Delta Air Lines' Salt Lake City service. Delta Air Lines' Eugene Airport service resulted z ~ in Delta Air Lines achieving a survey market share of 4.9 percent. Compared to the prior year survey, ,...._ Horizon Air/Alaska Airlines' market share declined 4.8 points, America West Airlines' share dropped 3.4 points, and United Airlines gained 3.3 points. In top 25 destinations, retention improvement occurred in 19 markets. As expected, Salt Lake City ` ~ retention improved from 37.6 percent to 55.6 as a result of seven months of Delta Air Lines' nonstop service. This service may have been a factor in retention improvements in the Las Vegas, Phoenix, San Diego, Orlando, Orange County, Atlanta, Dallas, Newark, Boston, and Palm Springs markets. Retention ~, in the Los Angeles market declined from 70.1 percent to 67.5 percent and is a concern. This situation is certain to worsen with Horizon Air's elimination of nonstop service, consolidation to two direct round trips, !~ and replacement of regional jets with turboprop equipment. Other markets experiencing year over year diversion increases include Washington Dulles, Sacramento, San Jose, and Ontario. '~ Eugene Airport's average one-way domestic airfares overall remained approximately $28.00 higher than Portland International Airport's average domestic airfares. Average fares increased approximately $4.00 ~ in both markets over average fares in the prior Passenger Demand Analysis. Eugene Airport's average ~~~ fares were higher than those at Portland International Airport in each of the top 25 catchment area markets; however, the fare spread narrowed in 14 of the top 25 markets, remained approximately the i~ same in three markets, and widened in eight markets. In nine markets, the fare spread narrowed by $15.00 or more. In eight of those nine markets, Eugene Airport's retention increased by five points or more. The spread between Eugene Airport's average fares and Portland International Airport's average ~~~ fares increased by approximately $9.00 and retention dropped by 2.6 points in the Los Angeles market. ~-~ In the San Francisco market, the spread between Eugene Airport's average fares and Portland International Airport's average fares decreased by approximately $28.00, and retention increased by 1.2 -:? points. Eugene Airport catchment area's true market grew 8.6 percent from the previous Passenger Demand Analysis. Among Eugene Airport's nonstop markets, there was a wide variation in year over year differences in true market size. Of greatest concern are changes in Horizon Air's markets with the Seattle market down 29.1 percent and the Los Angeles market down 15.6 percent while the America West Airlines' Phoenix market declined 2.6 percent. With the stimulus of Delta Air Lines' new nonstop service, the Salt Lake City true market increased by 50.5 percent. '.::' ~- ~ EUGENE AIRPORT Page 31 "i