As individual communities, the varied levels of service reflect differences in other factors such as the level of local economic activity and proximity to nearby airports. Most Small Communities Had Few Flights and Few Air Carriers, Though Service Levels Varied Considerably

In October 2000, the typical small community among the 202 we analyzed had the following levels of service:   Service from two different airlines or their regional affiliates, each providing service to a different hub where passengers could make connections to other flights in the airline’s hub-and-spoke system. Airline Service at Small Communities Declined Between October 2000 and October 2001

Between October 2000 and October 2001 (revised), the number of total daily departures in small communities dropped by 19 percent. In all, the number of communities served by only one airline increased from 83 (41 percent) to 95 (47 percent) of the 202 communities in our review. National Economic Decline and September 11 Attacks, Along with Airlines’ Strategic Decisions, Underlie Shifts in Air Service

Two primary external events that occurred since October 2000—the economic decline that began in early 2001 and the collapse of airline passenger traffic after September 11—significantly affected carriers’ financial conditions and thus influenced decisions about service throughout their networks, including service to small communities. These reductions were dramatic. (The major U.S. airlines do not operate hubs in either state.) R-squared is a measure of the proportion of the total variation in the dependent variable that can be explained by the independent variables in that particular model.
What GAO Found

Most major U.S. airlines began realizing net operating losses early in the 2001, and all of the major U.S. passenger carriers except Southwest Airlines reported losses for the year. Travelers throughout the nation shared in the difficulties. In October 2000, the typical or median small community that GAO analyzed had service from two airlines, with a total of nine daily departing flights. Forty-one percent of the communities were served by only one airline with size being the most obvious factor for service limitations. However, the level of service also varied by the level of local economic activity. The total number of daily departures from these small communities declined by 19 percent between October 2000 and October 2001. Although carriers had reduced total departure levels at small communities before September 11th, airlines made even more reductions after that date. Because profitability is so critical to airline decisions about what markets to serve and how to serve them, the changes in service levels in small communities can be traced to economic factors. Two such factors--the economic decline that began in early 2001 and the collapse of airline passenger traffic after September 11--are widely acknowledged as the main contributors to declining profitability in the industry.