International growth, particularly in Mexico and the South America region, is key to driving the continued expansion of San Antonio airport in Texas, which will host the Airline Business-organised Network USA 2013 event in March

San Antonio International airport is on the rebound. Traffic is growing after a brief dip during the recession, driven by international service and the region's growing economy.

The airport, which will host the Airline Business-organised Network USA 2013 event in March, serves a metropolitan area which totalled almost 2.2 million people in 2011, a rise of more than 28% since 2000, according to the US census. This makes it the third-largest city in Texas and in the top 25 nationally.

San Antonio International is growing alongside the metro region. During the first nine months of 2012, traffic increased nearly 1% to 6.15 million passengers and, says San Antonio city aviation director Frank Miller, is on track to post year-on-year growth as well.

"The airport is doing well," he says. "It's growing with its traffic and, basically, in San Antonio they've always seemed to weather the economy very well and I think we're seeing that with the air service." The airport recorded a near 2% increase in traffic to about 8.2 million in 2011 - the last full year data is available for.

Breaking records

New international flights are driving growth. International traffic more than doubled to nearly 300,000 passengers during the nine months to September, while domestic traffic dropped 2% to almost 5.9 million during the same period. Even when compared with full-year 2011 traffic, the airport would break records with a near 62% increase in international traffic.

"Continued economic and population growth in San Antonio has contributed to new destinations and keeping [and] adding flights in existing markets," says Brach Crider, senior business consultant of network planning at Southwest Airlines. He adds that the city is in the carrier's top 25 in terms of number of flights, and is one of its original "cocktail napkin" cities - part of the original route triangle devised by airline founder Herb Kelleher - to emphasise its importance to the Dallas-based low-cost airline.

Southwest is the largest carrier at the airport, with more than 38% market share of its passengers during the year ending 30 September, according to US Department of Transportation data. American Airlines is the second largest with 17%, while Delta Air Lines, at almost 11%, rounds out the top three.

Mexico is the at the centre of San Antonio's growth. Miller says the airport is now the 10th-largest gateway from the USA to Mexico, following a spurt of new flights in the past year.

Mexican budget carrier Interjet began flights to Monterrey in November, while Southwest subsidiary AirTran Airways started services to Cancun and Mexico City in May. Interjet had earlier launched services between San Antonio and both Mexico City and Toluca, which is an alternative airport for the Mexican capital, while another of the country's budget carriers VivaAerobus began flights to Monterrey in November 2011.

"San Antonio has always had a very strong link with Mexico," says Miller. "As we've seen, [with] some of the violence occurring down in Mexico, we've seen a fairly strong influx of Mexican nationals coming into San Antonio." He explains that this includes those flying back and forth to see family, as well as people who previously drove but no longer feel comfortable doing so.

Crider says the demise of Mexicana in 2010 made room for the addition of AirTran's flights to Mexico. "With the cessation of services by Mexicana, our view was that the market became over-priced and under-served," he says. "We have a terrific customer base in San Antonio, and the Mexico City service helps us become more relevant to those customers."

More flights south of the border are likely. Mexican regional carrier Aeromar received approval from the DoT to fly between San Antonio and Manzanillo, Saltillo and San Luis Potosi.

While it has not set a launch date, Aeromar's vice-president of network planning and corporate development Fabricio Cojuc Wolfowitz says the carrier will add flights to the USA in the second quarter of 2013.

However, he would not specify whether they would be to San Antonio. Miller says Guadalajara is a destination the airport is actively targeting for air services.

Domestic ambitions

San Antonio's local economy is also driving growth at the airport. Miller says the facility's proximity to the Eagle Ford Shale oil play and a strong military presence in the region are both drivers of the local economy.

"They're looking at least 20 to 30 years of the oil operations down there," he says about Eagle Ford. He adds that the play contributed about $25 billion in economic output to the region in 2011. Oil and gas conglomerates Tesoro and Valero Energy also have their corporate headquarters in the city.

Alaska Airlines, Southwest and US Airways have added new domestic flights in the past year. Alaska launched daily flights to Seattle in September, Southwest to St Louis in August, and US Airways to Philadelphia in June.

"We have developed a list of target cities," says Miller on expanding air service to San Antonio. "Seattle was one of our target cities but we still look at Boston, Fort Lauderdale and Sacramento, and down in Mexico, Guadalajara is one of the cities we don't have service to at this time.

"If [airlines] can provide service to a target city, they are eligible for a lot of incentive dollars," Miller adds. Incentives include marketing funds and reimbursement of landing fees, he says.

American says it would consider adding a flight to its Miami hub from San Antonio, about 48km (30 miles) south of Fort Lauderdale, once it begins flying the Airbus A319.

The airline will receive its first of 130 A319s in the third quarter of 2013, Flightglobal's Ascend Online database reveals.

Merger impact

Miller is unconcerned over the impact on the airport of a possible merger between American and US Airways. He says San Antonio "weathered" the mergers of Delta and Northwest Airlines in 2008 and United Airlines and Continental Airlines in 2010 well in terms of capacity.

He expects a similar result from any American-US Airways combination. "They are serving different markets out of San Antonio, so they can certainly complement one another," he says.

In the medium term, San Antonio hopes to add flights to Central and South America, as well as Canada, says Miller. It is not actively seeking flights to Asia or Europe as service would require runway improvements, he says.

San Antonio is working to accommodate rising traffic and new international service. The airport opened the new eight-gate terminal B in November 2010, and is now working on a $30 million renovation and upgrade to terminal A and a new consolidated rental car facility.

"We will work to bring the interior of that terminal in line with the newer building. One of the things, from a customer service standpoint, that we know needs to be done is a consolidated rental car facility," says Miller.

The upgrades to terminal A, which opened in 1984, are slated to be complete by March 2014, and the airport is in the process of selecting an architecture and engineering company for the $128 million rental car facility, he says. The airport expects the car facility to open in late 2016 or early 2017.

San Antonio is also upgrading its airfield infrastructure. An extension of roughly 305m (1,000ft) to runway 4/22 to 2,592m is complete, and the airport is finishing work to the parallel taxiway before the extension can open to air traffic, says Miller.

When this work is done, the airport will shift its focus to repaving projects elsewhere on the property.

"We've seen a fairly strong influx of Mexican nationals into San Antonio"

For further details of the Airline Business-organised Network USA 2013 click here.

Source: Airline Business