South Dakota State University Open PRAIRIE: Open Public Research Access Institutional Repository and Information Exchange Electronic Theses and Dissertations 1976 Feasibility of Establishing a Commuter Airline System in South Dakota Thomas C. Hruby Follow this and additional works at: https://openprairie.sdstate.edu/etd Recommended Citation Hruby, Thomas C., "Feasibility of Establishing a Commuter Airline System in South Dakota" (1976). Electronic Theses and Dissertations. 4950. https://openprairie.sdstate.edu/etd/4950 This Thesis - Open Access is brought to you for free and open access by Open PRAIRIE: Open Public Research Access Institutional Repository and Information Exchange. It has been accepted for inclusion in Electronic Theses and Dissertations by an authorized administrator of Open PRAIRIE: Open Public Research Access Institutional Repository and Information Exchange. For more information, please contact [email protected]. ESTABLISHING A COMMUTER FEASIBILITY OF AIRLINE SYSTEM SOUTH DAKOTA IN BY THOf!AS C. HRUBY A thesis submitted in partial fulfillment of the requirements for the degree Master of Science, !·!ajor in Economic�, South Dakota State University 1976 SOUTH DAKOTA STATE UNIVERSITY LIBRARY ,,./ FEASIBILITY OF ESTABLISHING A COMi�UTER AI RLINE SYSTE1" IN SOUTH DAKOTA This thesis is approved as a creditable and independent investigation by a cand idate for the de�ee, Master of Science, and is acceptable for meeting the thesis requirements for this degree . Acceptan ce of this thesis does no t imply that the conclusions reached by the candidate are necessarily the conclusions of the major department. Thesis Adviser Date -- L/Afead , Economics D�tment Date ACKNOWLEDGEMENTS I would be terribly remiss if I didn't properly acknowledge some of the individuals who were instrumental in assisting me in the completion of this research . Without their efforts, this endeavor would have been most difficult to complete. My thesis adviser, Professor Tom Daves, receives my indebted thanks . His dedicated, patient, and professional assistance were essential to the completion of this thesis. His academic criticism and philosophical enlightenments were of great help to me. My wife, Jean , and our children, Ann and Paul, provided the encourage­ ment and support required to achieve this goal . In addition, I thank the members of my thesis committee and the staff and instructors of the Economics Department , South Dako ta State University, for their assistance. ·rABLE OF CONTENTS Chapter • DU I INrRO CTION 1 The Problem • • • . 1 . South Dakota Conditions •.•••• 8 Goal and Objectives 14 Methods • • • • . • • . 14 Sco pe and Limitations . 18 Chapter Review • . • • 19 AND II . COViMUI'ER AIRLINE POSITION, GROWTH , FUTURE IN THE SCHEDULED AIR TRANSPORTATION INDUSTRY • • • • • 21 Trunkline Carriers • • 21 Local Carriers • • • 22 Commuter Industry . 24 III. ISSUES OTHER THAN PASSENGER TRAFFIC AFFECTING C0�'1 UTER F'EASIBILITY • . • • • 42 Subsidy . 42 Joint Fares . 54 Air Mail . • 59 Air Cargo . 61 IV. USERS AND FACTORS AF!i'ECTING THE USE OF SHORT-HAUL AIR TRANSPORTATION • • . • • • . • • • . • • . 64 Users of Short-Haul Air Transportation • . 64 D AND V. ESTIMATE OPERATING COSTS POTENTIAL IMPACTS OF A COMMurER SYSTEM ON sourH DAKOTA 74 Costs of Operating An Airline 74 AND VI. SOUTH DAKOTA AIR TRANSPORTATION SYSTEM FACILITIES 98 Air Transportation System . • . 98 Airport and Radio Navigation Facilities • . 105 VII. EVALUATION OF N ERES IN A SOUTH DAKOTA COMMUTER I T T .. SYSTEM • • • . • . • . • • • • 111 FBO Qu estionnaire . • • . 112 Chambers of Commerce and City Go vernment Qu estionnaire • • • • • • • • • . • 115 North Central Airline Interview • . • • 118 VIII. SUMMARY, FINDINGS, CONCLUSION AND RECOMMEN DA TIONS 124 Summary • • . • • • • • . • . • • . • . 124 Find.in gs • • . • . • • • • • • • • • • • • . • 125 Conclusion and Re commendations . • • • 126 . APPENDIX 1 . 128 APPENDIX 2 . 142 APPENDIX 3 . 144 APPENDIX 4 . 146 APPENDIX 5 . 150 APPENDIX 6 I e a e a . 153 APPENDIX 7 155 BIBLIOGRAPHY . 156 GLOSSARY OF TER MS • . 162 LIST OF ABBREVIATIO NS 167 LIST Qlt, FIGURES 1. South Dakota Po pulation Changes by County--1940-1970 12 2. Large st Cities in Counties with An Increased Population--1940-1970 • • . • . • • • • • • • 13 J. FAA Regions--Continental Un ited States • • • • • 39 4. Hypothetical Service Route--Eastern South Dakota 85 5. Possible Impacts by Group--South Dakota Commuter Air line System . • • . • • . • • • 92 6. Lo cation of South Dakota Radio Navigational Airds--1975 • • 107 CHAPTER I INTRODUCTION In the past decade or two , some basic changes have occurred in many of the nation's rural areas. On e of the most important areas of change has been that of transportation. Transportation facilities and systems are the lifeblood of rural America . The vast agricultural producing Mid-West, of which South Dakota is a· part, produces much of the food that feeds the United States as well as foreign consumers. Th e movement of mate­ rials and commodities to and from this area is accomplished, pri­ marily, by rail or truck. · The transportation of people is also of importance to this area and South Dakota. Due to isolation from major manufacturing, business, and trade areas, it is essential that prompt, efficient, economic, and comfortable modes of personal transportation are available. South Dakotans require access to outside areas and likewise, outside centers require ready access to South Dako ta. Mo vement within the State and region is improved when efficient and safe modes of transportation are available . The Problem With the exception of Amtrak ( the Government sponsored rail system) , which provides very limited service to the upper Nid-West and none to South Dakota , passenger train service has become history. 2 A vast system whi ch used to pro vide pas senger service to nearly every town on its routes is no w nonexistent . Bu s service lacks the speed of other modes (automobile and airplane), especially when routes require stops at every small town, service station , and major highway intersection between larger cities. Nevertheless, bus service does meet a certain transportation need an d in certain instances and on selected routes (non-stop) bus travel co uld pro vide a compet itive alternative to other modes of transportation . Air transportation appears to be ideally suited to serving the upper Mid-We st. It is a relatively fa st, convenient, reliable, and safe mode of travel. ·1o vement to and from and within the region and South Dakota is ha stened in most ca ses, by air travel. However, the reduction and/or cessation of air service is possible for some east ern South Dakota cities in the near future . If air service is reduced or curtailed, these communities will become more iso lated and less readily accessible to outside areas . This would undoubtedly affect the economic stability and growth of these com munities and their surrounding trad e ar eas . In itiation of scheduled air taxi or commuter service is perhaps the only way that airline service to many low density points in South Dakota can be continued. This paper contains an J evaluation of the feasibility of a commuter airline system in lieu of or in addition to present air carrier service in South Dakota.1 Factors Affecting the Problem The problem of declining air service to smaller, remotely located cities has been precipitated and affected by a variety of interrelated phenomena. These phenomena are contributing factors in the decline of air service to this area and South Dakota. During the 1960's, the Federal highway construction program vastly expanded our nation's highway system, thus encou raging greater use of the automobile as the primary mode of personal 2 transportation in short-haul situations. Competition from the automobile and the highway system have been mentioned as big factors in reducing the use of air trans}:X)rtation in short-haul markets.3 Local airlines contend that it is very difficult for them to provide a good selection of flight frequencies at smaller communities. This makes driving with its great flexibility a more convenient form of travel over short distances. 1 Refer to the Glossary of Terms and List of Abbreviations for an explanation of terms and abbreviations used in the text. 2 Short-haul refers to trips of 200 miles or less. Jin late 1971, Mr. David Moran, vice president for traffic and sales, North Central Airlines, said that, "Previously the 50-60- mile market was.conside�ed short haul; now it is 150 miles and under. We get c�earned by freeways." James P. Woolsey, "Locals Predict Rising Subsidy Needs." Aviation Week & Space Technology,· November 15, 1971, p. 26. 4 Other factors also contribute to passengers' decisions to drive to major terminals rather than to use the smaller , less frequently served airports. The Athens, Georgia--Atlanta market (67 miles apart), is an excellent example. When better parking facilities were built at Atlanta, airline passenger traffic from Athens to Atlanta showed a decline . Further drops were noticed when the limousine service between Athens and Atlanta was improved . 1 Population shifts in the plains states have brought about a redistribution of population . Despite the movement of population into major urban areas , many small communities continue to express a desire for scheduled air service. This demand will most likely increase if recent trends of movement back into the less populated Mid-West continues. Also , the composition and market structure of local airlines has changed as the result of mergers and route expansion. The locals have shifted their emphasis to longer and denser routes that serve larger hub terminals rather than emphasizing service to small towns and cities.2 There are various examples of this change in the route structure. In 1969 Mohawk extended from its traditional upstate New York points to Chicago and the Twin Cities; North Central was 1 U.S. Department of Transportation, Civil Aeronautics Board , Remarks Before the Joint Luncheon of the Kiwanis Club and Chamber of Commerce of Wichita Kansas b Secor D. Browne, Washington, D.C.: U.S.