The cost of doing business for airlines serving Fort Lauderdale-Hollywood International Airport and some other Florida destinations is on the rise as aviation departments move to make up lost revenue from sweeping flight cutbacks.
But as carriers continue to wrestle with staff shortages and other problems that have caused unprecedented levels of canceled and delayed flights this year, it remains unclear the degree to which consumers will tolerate higher prices if airlines elect to pass along proposed fee increases to them.
The Broward County Aviation Department unveiled its plan to raise fees for landings and takeoffs and other charges at Fort Lauderdale-Hollywood during a 2023 budget workshop with county commissioners in mid-August. On the same day, the Greater Orlando Aviation Department disclosed its own round of increases for airlines serving Central Florida’s giant Orlando International Airport.
At the Broward workshop, Mark Gale, the Fort Lauderdale airport’s CEO and director of aviation, told commissioners the loss of flights to airline operational cutbacks — particularly by JetBlue Airways — are the chief drivers of fee increases, which are not only needed to make up for lost revenue, but to repay long-term debts that are financing large expansion projects.
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“We are no strangers to seeing that airlines across the industry are announcing each and every day service reductions,” Gale said. He added that while “signs of recovery are there, it is very very turbulent and not across the board airline by airline.”
Industrywide, delays and cancellations rose this year as consumer demand surged and the airlines scrambled to restore staffing after offering retirement packages to unneeded employees during the COVID outbreak. Those shortages compounded routine flight problems such as bad weather.
Passengers wait in line at the Southwest Airlines ticket counter at Fort Lauderdale-Hollywood International Airport. After airlines imposed broad schedule reductions as way to cope with flight delays and cancellations, airport operators at Fort Lauderdale and elsewhere are raising the landing, takeoff and other fees they charge the airlines to make up for lost revenue. (Joe Cavaretta / South Florida Sun Sentinel)
Two of the big airlines that collectively generate the most passenger traffic at Fort Lauderdale — Spirit Airlines and JetBlue Airways — did not respond to a question about whether rising costs might prompt them to increase fares.
Southwest Airlines said it doesn’t discuss future pricing.
“As a matter of business, Southwest cannot speculate on future consumer-facing pricing/fares/fees,” the Dallas-based airline said in a statement to the South Florida Sun Sentinel. “Also, we don’t have a position to offer, at this time, regarding the airport’s proposed fee hike to airlines.”
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Delta Air Lines declined comment.
In advance of the holiday weekend, AAA said in a statement that travelers “are paying more for their Labor Day trips this year.”
The auto club said it found that the average lowest airfare stands at $179 per ticket, “an almost 20% increase over last year and a 30% increase over 2020.”
Airlines for America, a Washington, D.C. industry trade group, also did not respond to the fare hike question. But the group’s figures show consumers are paying more for tickets since 2019, which is before the COVID-19 pandemic all but grounded the airline industry in 2020.
Ethan Klapper, senior aviation writer for The Points Guy, an online service for air travelers, believes fares could see an upward swing for passengers flying out of Fort Lauderdale.
“Airlines can pass on this thing to passengers, " he said. “At an airport like Fort Lauderdale where you have ultra-low-cost carriers, they probably will pass it on to passengers.”
Traveler Braham Vasquez makes his way to the ticket counter for his flight to Chicago at Fort Lauderdale-Hollywood International Airport on Friday at the start of the Labor Day weekend. (Carline Jean/South Florida Sun Sentinel)
“It depends on the competitive environment and what the other airlines do.”
Dr. Bijan Vasigh, economics professor at Embry-Riddle Aeronautical University in Daytona Beach, said it is easy for an airline to pass along higher costs to business travelers, “but you have a much more difficult task to pass that cost to leisure travelers because leisure travelers are more price-sensitive.”
“Leisure travelers will take their cars if the distance is not that far,” he said.
As Labor Day holiday travelers took to the skies this weekend, airline managements hoped their adjustments would avert the flight disruptions that have plagued and frustrated fliers for months.
During the first six months of this year, 3.2% of flights around the nation were canceled while 24% were delayed, according to the U.S. Department of Transportation. Under pressure from the government to fix their operations, the airlines have modified their schedules so that staffing levels better match the flights they offer.
The Fort Lauderdale airport has lagged behind several Florida airports in recovering traffic lost to the pandemic. Data shows domestic and international traffic combined is in the low 90% range against 2019 levels. In April, it had reached about 88%. But domestic traffic alone surpassed 2019 levels in summer 2021.
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“It is likely that the reduction in airline seat capacity in and out of FLL in recent months has hindered the airport from already reaching 100% of 2019 pre-pandemic total passenger traffic,” spokeswoman Arlene Satchell said.
Gale, who was unavailable for an interview last week, suggested to county commissioners last month that the revamping of airline schedules is far from a predictable process.
Some make changes close to their scheduled flight times while others do it “further out,” he said.
At Fort Lauderdale, JetBlue has suspended more than a dozen routes from the airport to U.S. and Caribbean destinations. American Airlines, which has a much smaller presence at Fort Lauderdale but dominates the landscape at Miami International Airport, announced 31,000 flight reductions systemwide for November.
Satchell said the airlines’ “rolling flight reductions” have mostly come from JetBlue, with “the others to a lesser degree.”
Travelers make their way around Fort Lauderdale-Hollywood International Airport on Friday at the start of the Labor Day weekend. (Carline Jean/South Florida Sun Sentinel)
In May, Spirit reduced its summer flight schedule by 5% to 7%, and early last month, attributed continuing disruptions in part to air traffic control staffing issues in Florida.
Unpredictable scheduling has made for a bumpy ride for airport budget makers.
Passenger boardings are forecast to come in at 17 million next year against 2022′s budget of 17.4 million, a decrease of 2.2%.
That helped lift proposed fee increases to be paid by the airlines for items such as aircraft landings by 12.8%.
Satchell said that while the airline revenue portion of the airport’s income “may be hurting due to the flight scheduling cutbacks, non-airline revenue from concessions, parking and rental cars is strong.”
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Last month, Gale told the commissioners that 52.9% of the airport’s revenue comes from non-airline sources. “Many airports have the exact opposite,” he said.
Gale deferred comment on the potential impact on the airport of JetBlue’s proposed takeover of Spirit, which many analysts believe could reduce local services and raise fares. The $3.8 billion deal still requires federal regulatory approval and is not expected to be completed until the first half of 2024. In the interim, Spirit continues to operate as an independent carrier.
But Gale said he has received assurances from JetBlue that Fort Lauderdale remains a major priority in its future. The Broward airport is one of a half dozen “focus cities” in the New York-based airline’s system where there are heavy concentrations of flights. And the airline is partnering with the airport in the building of a fifth terminal.
In the meantime, airport management is counting on traffic to return to the positive side over the long term as airlines even now are adding new routes from the airport.
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Recently, Spirit said it will resume daily service from Fort Lauderdale to Managua, Nicaragua, on Nov. 30, boosting its Latin American-Caribbean destinations to 29 cities.
Frontier, the loser in the takeover battle for Spirit, is adding flights to Phoenix out of Fort Lauderdale.
Internationally, Norse Atlantic Airways has introduced service to Oslo, Norway, and plans to start flights to Berlin in December with London and Paris to follow.
On the same day Gale was delivering his forecasts, Orlando International Airport was also announcing fee increases for landing and terminal rents, among other items, to help cover a budget that is roughly double Fort Lauderdale’s for next year as a result of ballooning expenses driven by inflation and a new terminal.
The new South Terminal C at Orlando International Airport is among the big-ticket items helping to drive airline fee increases at the airport for 2023. A people mover will provide a connection to the airport's north terminals and there will be a station for Brightline's inter-city rail service to and from South Florida. (Roger Simmons/Orlando Sentinel) (Roger Simmons / Orlando Sentinel)
“Just about every sector of this budget has been affected by current economic forces and the opening of Terminal C,” said Kathleen Sharman, Greater Orlando Aviation Authority chief financial officer. “With passenger traffic returning to 2019 levels, revenues are projected to rise, but so are expenditures like maintenance and personnel.”
Palm Beach International Airport is not adding to its fees next year, a spokeswoman said.
Miami International Airport is cutting a number of its fees, but plans to increase terminal rentals across the board, according to next year’s budget.
The airline has benefitted from new services introduced by Spirit and Frontier last year, as well as by JetBlue the year before, a spokesman said.
Some observers believe fee increases are not a good idea, arguing that they could drive airlines to other airports.
Klapper of The Points Guy believes that high fees cost Fort Lauderdale the services of Emirates Airlines, the Middle Eastern carrier that moved to Miami International after the pandemic.
“These rates have driven some of the traffic away,” he said. “Miami International is seeing an opportunity here. They have made some very aggressive moves to take away traffic from Fort Lauderdale.”
Vesigh of Embry-Riddle believes an upward push in fees is not a good idea.
“I’m against that,” he said. “The price of fuel has increased significantly. At this time I believe that increasing the landing fees and so forth is not beneficial to anyone.”
Members of the Air Line Pilots Association International hold a protest against airlines at Orlando International Airport on Thursday. They were part of a nationwide demonstration at 13 airports, protesting the industry's problems in realigning operations to accommodate a surge in consumer demand for air travel. (Ricardo Ramirez Buxeda/ Orlando Sentinel) (Ricardo Ramirez Buxeda/Orlando Sentinel)
Besides rising fuel and fee costs, some airlines are facing tough contract negotiations with unionized pilots who assert that managements failed to fairly compensate them during the tough times generated by COVID-19. They want more money and better benefits.
On Friday, Spirit and pilots represented by the Air Line Pilots Association agreed to begin contract talks next Tuesday. The pilots’ contract becomes amendable on March 1 of next year, the union said.
Also last week, Delta pilots conducted informational picketing at 13 airports around the country, including Orlando’s, to jump-start talks that the union says have been stalled since 2019.
“Delta management has invested billions in foreign airlines and rewarded short-term investors, spending billions in stock buybacks to boost the Delta stock price,” the pilots group said in a statement. “Meanwhile, the Delta pilots are working under wages, work rules and benefits negotiated in 2016. If our pilots look frustrated and tired, it’s because they are.”
Staff writer David Lyons can be reached at dvlyons@SunSentinel.com