Have you been through Miami lately? Unless you’re an American Airlines-loyalist, the answer is probably a firm “no.” While American’s presence continues to strengthen, other airlines are running away in droves. The latest is Delta, which dropped its last attempt to make non-hub flying there work this week. Why is this happening? 
It’s actually a very clear lesson on how not to run an airport.
Miami is a vibrant city with a great local Latin population. That local presence combined with its location should make Miami a fantastic place for a Latin American hub. Sure enough, it is. It’s one of American’s jewels in an ever-rusting crown. By all accounts, it’s a rock star of an operation for the airline.
That makes sense, because soon enough, American and its oneworld partners might be the only ones left. Here’s a list of airlines that have left or cut back recently.
- Air Jamaica cut its recently re-launched route to Kingston (but it still does Ft Lauderdale)
- AirTran pulled all flights after the merger with Southwest
- Alaska recently decided to switch its flights to Ft Lauderdale
- Delta killed flights to Cincinnati, London, Memphis, Orlando, Raleigh/Durham, and Tampa
- KLM canceled summer service to Amsterdam and winter service for next year is up in the air
So what’s left? A lot of silver birds. While Delta pulled out of many cities, it’s not like other US airlines are stepping in to fill the void. Pre-merger United doesn’t fly there much – there’s only one flight a day from Denver and three a piece from Chicago and Washington, many on regional jets. US Airways flies to Charlotte and Philly but it doesn’t even bother with its Phoenix hub. It can be downright difficult to find good flights to Miami if you’re traveling domestically . . . unless you fly American.
From Europe, there will continue to be some service, but it’s highly seasonal (winter, of course) and leisure-based. Nearly every Latin airline has to continue to fly there because that’s the bread and butter route, but we’re increasingly seeing even Latin carriers look elsewhere. TAM now flies double daily flights to Orlando in addition to its Miami service. But it’s not Orlando that’s the real threat. It’s Ft Lauderdale.
Ft Lauderdale has seen a tremendous increase in service over the last decade, much of it from low cost carriers. Sitting only 25 miles north of downtown Miami, Ft Lauderdale is not that far, especially considering how much of the population lives north of Miami itself.
Spirit makes its home in Ft Lauderdale with low cost flights all over the US and the Caribbean. JetBlue has grown its operation there over the last few years, and the new Southwest/AirTran combo will have a significant presence. Allegiant bases airplanes there while airlines like Alaska have moved service over from Miami. And despite its stated desire to fly into primary airports, Virgin America picked Ft Lauderdale over Miami. What gives?
You can probably blame it on two things. One is American. American is a tough competitor, and it fights ferociously if anyone invades its turf. But that doesn’t explain everything. The one that really grabbed me was Alaska’s decision to leave. Alaska and American are long time partners and American even puts it code on the Alaska flight. So something else is happening here to push airlines away.
That “something else” is Miami’s out-of-control spending. The airport is on a building spree putting together incredibly expensive, long-delayed terminals that are causing costs to simply skyrocket. In 2010, the airlines paid roughly $17.61 for each passenger boarded. In the next decade, that will balloon to over $30. Think about that. How can a low cost carrier survive in an environment like that? It can’t. And Alaska, despite not being a low cost carrier, apparently feels the same way. Everyone should. The crushingly high costs are simply too much to overcome, even with a partnership with American.
Of course, high costs alone wouldn’t cause the exodus. But high costs combined with a convenient alternative? Ah yes, that’s enough to make waves. It’s very easy for airlines to walk away from Miami and its money-wasting ways because Ft Lauderdale is so close. By comparison, Ft Lauderdale is downright cheap. In 2010, its cost per enplanement was a measly $5.32. You can imagine why low cost carriers have flocked there. That airport itself is going to see costs rise as it works to build a new runway for almost $800m (just broke ground), but even if costs tripled, it would be half of Miami.
Of course, if costs triple, Spirit and Allegiant might find themselves running away, so hopefully Ft Lauderdale is able to keep its spending down and its charges low. If the trend continues, we might just find Miami renaming itself to Miami oneworld International Airport.
