Wall Street turmoil threatens to erode the critical New York-to-Boston shuttle service, which had a 17 percent drop in passengers in the first half of this year as companies scaled back travel budgets and road warriors increasingly chose trains and buses over planes.
Now, demand could slip further for the hourly shuttle flights operated by
"The airlines, of course, don't have a whole lot of choice," said Dan Kasper, managing director of LECG, a Cambridge consulting firm that has studied the shuttle service.
New York-to-Boston is an important route for airlines because it carries the most business travelers in the country. Capturing a larger chunk of that market has consumed US Airways and Delta - which fly between Logan International Airport and LaGuardia Airport. They face competition from American Airlines Inc. and
"New York and Boston are battleground cities," said David Beckerman, a vice president with OAG, a Chicago-based company that provides aviation data and analytical services.
But the shuttle service is a shell of its glory days in the 1980s, when demand was so high airlines had extra planes waiting for passengers who spilled over from sold-out flights. The current economic slowdown coupled with the popularity of low-fare buses, such as Megabus and BoltBus, and Amtrak's high-speed Acela trains have hurt the shuttle business.
During the first six months of this year, US Airways and Delta carried 90,663 fewer passengers - a 17 percent decline - along the route than they did during the same period last year, according to OAG. That left planes along the route only 36 to 54 percent full each month between January and June, compared with 40 to 62 percent during the same period in 2007. In total, the volume of passengers flying between Logan and LaGuardia has dropped 44 percent since 2000.
"That's pretty bad," said Beckerman, who used to be a strategy analyst in Delta's international revenue management. "I'd be very surprised if they're breaking even, even in 2007."
So far, US Airways hasn't cut any of its 16 round-trip flights. Citing emptier planes and higher fuel costs, Delta this month cut one of its 16 daily round-trips. And American - which offers eight daily round-trips - had planned to eliminate that route as part of its companywide seating-capacity cuts; but a few weeks ago the company said it would reinstate most of that service, leaving six daily round-trips starting Nov. 2.