Diversifying Your Portfolio Matters, Even in Air Service

The announcement by American Airlines last week to start nonstop service to Los Angeles from Pittsburgh was a welcome addition for many businesses in the region.  

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Weeks earlier, Breeze Airways announced expanded service to Los Angeles, as well as bringing back seasonal service to San Diego and other cities, including Portland, Maine. 

The announcements came a month after Spirit Airlines discontinued the LAX-PIT route amid national cuts after serving it successfully for several years. 

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“Our goal is to work with all of our airline partners and help them succeed on their respective routes,” said Joe Rotterdam, Director of Air Service Development at Pittsburgh International Airport. “With a large variety of carriers at PIT, we are helping to serve all sectors of our market – from people seeking business class to low-cost options. We always strive for a diverse, competitive market.” 

In the last 10 years, the airport has achieved a 70 percent increase in nonstop destinations, from 36 to 61, providing passengers with more options and convenience. During that same period, the airport welcomed seven new airlines, including the notable return of British Airways with nonstop transatlantic (soon to be daily) service to London Heathrow, for a total of 15 carriers and two tour operators. 

With the current split of passenger share at PIT no carrier is dominant. Southwest carries the most with 25 percent of passenger traffic followed by: American (22 percent), Delta (16 percent), United (14 percent), Spirit (10 percent), Allegiant (4 percent), JetBlue (2 percent) Breeze (1.7 percent), with several other carriers following.  

That’s a big difference from 20 years ago when US Airways carried more than 90 percent of the traffic at PIT.  

With a diversified air service portfolio, if one carrier pulls back others may see an opportunity and step in to fill a void, said Bijan Vasigh, professor of economics and finance at Embry-Riddle Aeronautical University in Daytona Beach, Florida. 

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“Generally, with (non-hub or) smaller airports, most of the flights go to hubs and people don’t have that much choice of nonstop flights,” Vasigh said. “But when you have a diversity of carriers, especially smaller carriers and so forth, they tap into unserved markets. Therefore, the people in the airport community have more choices of nonstop flights.” 

Just like a stock portfolio, it’s key for airports to work to diversify their air service portfolio, he said. 

 “From my point of view, that’s a great idea that is happening where you see new airlines like Breeze and others are serving the market,” Vasigh said. 

Rotterdam pointed to carriers like Spirit and Breeze that continue to be key contributors to PIT’s air service portfolio adding to the core service of major carriers like Southwest, American and others.  

“All of our carriers are important,” Rotterdam said. “That’s why we’ve pursued this strategy. All air service development drives economic development for our region.”