It looks as though Stewart Airport outside Newburgh is this year going to have its best year since 2008 in terms of total passenger traffic, and unless something completely unanticipated occurs 2018’s traffic counts should be substantially higher than this year’s. These projections are based on data released last week by the Port Authority of New York and New Jersey (PA), operator of the airport.
The lion’s share of the Stewart turnaround, of course, is due to the arrival at the regional airport of Norwegian Air, the rapidly growing European budget carrier that has increasingly disrupted the airline industry through its flights from secondary airports like Stewart to secondary destinations such as the European ones it serves from Stewart — Edinburgh, Belfast, Dublin, Shannon and Bergen. A small but significant sliver is due to the increase in activity of Allegiant Air, a low-cost, Las Vegas-based budget carrier that specializes in seasonal flights to southern vacation and entertainment destinations. Stewart airline traffic by the three more established carriers — JetBlue, US Airways and Delta — has plateaued in recent years, but has benefited this year from an overall increase in the number of airline travelers.
Year-to-year traffic at Stewart, PA figures show, increased in August from 25,969 paying passengers to 56,621. Some 27,120 of that surge came from Norwegian, and the remaining 3532 from the other airlines. The corresponding figures for July were 26,703 from Norwegian and 3016 from the other airlines.
Norwegian’s load factor at Stewart, the all-important proportion of paying passengers to the number of seats available, is flat: 81.4 percent in August as compared to 81.2 percent in July, the European discount airline’s first full month of operation at the airport. The worldwide load factor in 2015, according to the International Air Transport Association, was 79.7 percent.
Prior to Norwegian’s arrival, passenger traffic at Stewart showed a decline of about 15 percent from the summer peak flying months into the winter. It will be interesting to see if the presence of the new airline affects that pattern of passenger seasonality. Though it may be premature to generalize, the Norwegian experience seems to be establishing the principle that price consciousness is as important a motivation to a significant part of the New York metropolitan area market as it is to people in other places around the globe.
What is likely to happen next in a dynamic marketplace? A variety of business strategies being pursued in this rapidly changing and increasingly more unregulated industry may affect the Stewart situation. My guess is that they’re going to have a hard time dislodging an increasingly successful Norwegian Air. Airlines with a large proportion of Internet bookings like Norwegian prosper in the present environment.
The traditional airlines could compete more actively to protect their market shares. Other budget airlines interested in doing what Norwegian is doing could be attracted to Stewart and other secondary airports. Cheap flights to Florida and other seasonal destinations such as those offered by Allegiant could become even more popular. Some airlines could deploy planes used for less profitable routes to holiday packages or vacation destinations.
As we enter the late fall, Norwegian Air could either cut back or expand. It could decrease the frequency on some of its flights while it expanded to other destinations. Or it could stand pat and see whether its load factor goes up or down.
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