As the governments of Wichita and Sedgwick County prepare their legislative agendas for next year, retaining the Affordable Airfares program is a high priority for most officials. This program provides taxpayer money to subsidize low-cost air carriers in Kansas. Most of the program’s funds have been spent in Wichita, in particular on AirTran Airways.
It’s almost certain that air fares are lower now in Wichita than they might be if not for the Affordable Airfares program. But another goal of the program is not being met. That goal is to increase the flight options from Wichita. This number has been declining for many years, but local officials seem reluctant to acknowledge this. A report produced last year by Kansas Legislative Division of Post Audit, while containing many useful findings, muddies the water in a way that makes it difficult to see the trends at the Wichita airport.
Here’s an example: Sedgwick County’s 2012 legislative platform states “The Post Audit report also concluded that ‘the program appears to have the desired effect … fares have decreased while passengers and flights have increased.'”
In the chart provided in the LPA document, there mare many years where the “percent change in flights from prior year” is zero or negative. That means that for that year, the number of flights declined.
In the chart (below) titled “Monthly Departures, Wichita” we see the number of flights leaving Wichita each month since 2000. (I gathered this data from the same source as did LPA, but independently.) I draw a trend line starting in 2000. That line barely slopes upwards, supporting a claim that “flights have increased.”
But suppose we start the trend line on January 1, 2003, about seven months after AirTran entered the Wichita market. In this case, the trend line slopes downwards, and rather sharply. Which of the two lines best represents the performance of the Affordable Airfares program? I would contend it is the second line, as it shows what has been happening for the past nine or so years: Flight options from Wichita are declining.
Considering passengers, shown in the chart titled “Monthly Passengers, Wichita and U.S.”: If we take as a starting point any time from 2000 to 2002, the number of passengers is higher now than then. But since 2004 the trend for Wichita passengers is pretty flat. (Since the monthly passenger data is highly seasonal, I present a 12-month moving average, so that each point plotted is the average of the previous 12 months data.)
Comparing Wichita to national data, we can see that for the past two years the national trend is slowly rising, while Wichita’s trend is flat. The gap between national and Wichita is increasing, although slowly. This means that Wichita passenger traffic is not keeping pace with national.
In presentations made as part of the Wichita/Sedgwick County Community Investment Plan attendees are told: “Fares have decreased (24 % overall) while passengers (23% increase) and flights have increased.”
You have to make a selective — and I would say tortured — reading of the data for this statement to make sense and be true. The survey administered to program participants, at least in draft form, holds similar errors.
Is the number of flights important? To the business traveler — who often must make travel arrangements on short notice — it is. An available seat on an airplane, even if the fare is high, is the primary concern.
Other facts regarding the Affordable Airfares program are muddy too. The LPA report from February 2011 is Affordable Airfares: Reviewing the Benefits Claimed As a Result of State Funding to Lower Airfares. In its “Answer in Brief” the audit states: “Overall, the program appears to have had the desired effect. Since Wichita’s original affordable airfare program (FairFares) began in 2002, fares have decreased, while the number of passengers and the number of available flights have increased. However, the Regional Economic Area Partnership’s (REAP) annual reports on the program contain numerous inconsistencies and inaccuracies. Further, the economic impact of the program has been significantly overstated. Specifically, the estimated number of jobs created and the State’s return on investment were overstated because of key methodological errors and the use of some inaccurate data. We also found that overall accountability for the State funds is lacking.”
Specifically, some of the problems LPA found were:
- REAP officials don’t use the best data available on fares and the number of passengers.
- The baseline years and industry benchmarks REAP officials use for comparisons are inconsistent from year to year, and sometimes even within the same report.
- REAP officials omitted data on the number of flights available to passengers — a key goal of the program — from all but one of the annual reports.
- The annual financial reports contain numerous errors and inconsistencies.
- The general approach to estimating the number of jobs created appears reasonable, but the actual estimate includes some key methodological errors and uses some inaccurate data. … As a result, the 2008 study’s estimate of more than 9,700 average annual jobs from AirTran entering the Wichita market is significantly overstated. … The calculated return on investment to the State is also significantly overstated.
- Overall accountability for state funds is lacking.
- There is a perception among some people in the State that REAP isn’t sufficiently independent to administer the State Affordable Airfares Fund.
Thea actions of Wichita and Sedgwick County officials show that they are either uninformed regarding these issues, or that they simply don’t care.
The subsidies to Airtran were to be a temporary assistance while the airline was creating name identification and customer satisfaction. Other issues of concerns are: 1)Atlanta will now be ruled by Delta with NO competition causing fares to rise flying to the east coast; 2) the flights to Chicago and Dallas will be to alternate airports which will have transfer issues; and the competition to Dallas could weaken our market for American, which is currently going through bankruptcy. Southwest coming to Wichita has been a goal for years.