Monday, March 21, 2005

Airport Economics

I am completely baffled by the economics of airports. Not airlines, whose economics are baffling to everyone including CEOs and CFOs of the airlines, but airports. A couple of cases in point:

1. The number of flights coming to and going from our airport is down over 50% from 10 years ago with the number of carriers down even more. The only major presenses left are American and Southwest. But there are now at least 5 new parking lot companies. I am guesstimating that number of parking spots is up around 100% from 10 years ago. I don't get it. Did most people take a cab or get dropped off at the airport 10 years ago? I don't remember that being the case.

2. The more flights American cuts to and from STL, the more stores open up in the airport. Americna sent me an e-mail today informing me of 2 new Starbucks, a full size Chili's Restaurant, a CNBC store(??!!) and a Brooks Brothers opening in the main terminal. Leaving aside the CNBC oddity, what explains the additions of these stores. I have a theory on Starbucks: there are way fewer people at the airport but those that are there are there much longer than they used to be. This might help the Chili's as well, but Brooks Brothers?

3. The biggest question I have revolves around the airport itself. Lambert is undergoing an expansion that will double its size, despite the fact that it is running at less than half its capacity as is. Where is the sense in that?


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