Using Buses to Transport Passengers Short Distances To/From Hubs

This post discusses an idea I've had for awhile, but been somewhat hesitant to share. After thinking of potential ways for airlines to cut fuel costs, this one struck me as relatively easy with immediate impacts. Throughout our air transport network, dozens of very short routes (less than 150 miles between airports) exist. Most of these routes can be covered by bus with only a modest increase in transport time. While the idea of busing passengers to alternate airports is nothing new, as Ryanair has successfully done at many of its major bases in Europe, busing passengers between destinations in lieu of an aircraft, in order to facilitate connections, it is something untested in the US.

The reason buses are preferable to small aircraft is simple: cost. It's very, very expensive to fuel a small plane traveling such short distances (relative to the amount of revenue generated), in addition to the costs of crewing and maintaining that plane.

There are two different basic types of regional jet contracts that could potentially be affected by a move to buses. One are the contracts, known as at-risk flying, that many companies which operate turboprops on very short routes receive. For a flat fee per flight, the turboprop operator can use the brand of the legacy carrier's regional arm, and the legacy carrier will take care of booking and payment. The company that provides the turboprop takes a risk when providing that flight, and can either make or lose money. Theoretically, if turboprops are not making money with high fuel prices, they would be pulled by operators.

It's unclear whether buses would be effective at replacing turboprops for short flights. Turboprops are designed for use on short routes, and depending on the model, can be significantly more efficient than regional jets. However, because I don't have reliable cost estimates for these aircraft, nor intimate knowledge of the contracts that allow a turboprop provider, like Skywest, to license itself as the affiliate of a legacy carrier, I'm hesitant to say that short turboprop flights should be targeted for replacement by buses. While buses might have advantages over turboprops, particularly for very short flights, buses would arguably provide more advantages over regional jets.

The second kind of contracts, known as fixed-fee flying, typically cover regional jets. The company that provides the regional jet can effectively pass on its cost to its legacy partner. The legacy keeps all the revenue generated from that flight. However, in these difficult times, legacies are eating mountains of red ink, because regional jets are not as fuel efficient per passenger as larger planes, and legacies have faced significantly higher costs in the face of smaller increases in revenues.

As we have seen in the past several months, many legacies, such as Delta, have tried to find any loophole possible in their contracts with regional lift providers in order to cancel them. Delta is simply losing too much money on these deals. Unfortunately for Delta, the company has had difficulty nullifying portions of the agreements. Given these restrictive contracts, the transition to the use of buses on some short services could take awhile, but it is worthwhile from a cost standpoint.

I am not suggesting that buses replace all regional flights. I am not even suggesting that buses replace all flights on a given short route. However, there are flights where it would be far more efficient and cost-effective for carriers if they used buses rather than small aircraft, particularly 50-seat regional jets. The vast majority of passengers on regional aircraft will connect at a hub. Regional aircraft are for getting passengers to and from a hub, not flying passengers point-to-point. Yet regional jets remain a very expensive way to transport passengers to hubs.

Moreover, regional flying, in it of itself, is essential for a legacy carrier, enabling the carrier to differentiate itself from its low-cost competitors, and generate higher yields. In fact, while fuel for regional operations can be rather pricey, labor costs are typically much lower, and this can help offset some of the burden. Airlines are finding that 70-100 seat jets are very efficient for many routes they serve, even to larger cities. Longer regional flights are impractical to target by bus, and 50 and over seat jets will have a place in serving this market.

So hypothetically, if this idea were ever to come to fruition, what would it look like?

The operation:
Ideally, buses would depart from downtowns, or from strategic pickup points in the small city being served, enabling passengers to skip the long drive to the airport. The bus would then travel on the fastest route, nonstop to a gate at the airport terminal. Admittedly, this would require some level of security clearance, and it's unclear whether airlines would be able to obtain this. But ideally passengers could then, at a boarding gate, drop off their luggage into a cart and go through a quick security screening before connecting to their flight. This would require the cooperation of several different parties but if airlines were able to get a bus infrastructure in place, it could enable carriers to make this process very seamless, while preventing passengers from having to wait in long lines at ticket counters.

If the cost savings were not so dramatic, this would not be worth doing, but very loosely estimated costs suggest that if a 55-passenger bus costs $300 an hour to operate and a 50-seat regional jet costs $1500 per hour to operate, the savings generated by using the bus would be very significant. Not only could capacity be added on the route, but at significant savings.

On a hypothetical route, if the bus takes two hours to cover the same distance the regional jet can in one that would still produce a cost savings of well over $500 per trip, not bad when added up over time. It would result in some additional time spent traveling for passengers, but this would be minimal if routes were carefully selected. Whether airlines like it or not, oil prices will continue to increase in the coming years, and this cost burdens regional jet operators far more heavily than it does bus operators, making bus travel increasingly advantageous in the future. 

Consider the Delta route between Columbus, GA and its hub in Atlanta. The route, 83 miles by air and just under 100 miles by road, is serviced most days by 4 flights on CRJ-100 regional jets (50-seaters). To fly the route takes about 50 minutes, to drive, about an hour and 45 minutes. If some of the CRJ flights were replaced with bus service, bus passengers would experience a slightly longer trip, but one that is more comfortable and less prone to delays (mechanical, air traffic control, and weather-related).

Admittedly, a bit of timing would be required; sending a bus out in rush hour would nullify any advantages of this scheme. But given the increase in delays that passengers are experiencing, and the increasing strain on our air traffic control system, exacerbated by more flights on smaller jets, bus service could not only offer airlines cost savings, but passengers a better experience by reducing the propensity for delays.

Like a flight, passengers could board the bus from a boarding gate (on the tarmac), and head nonstop to their destination. And with the lower costs of operating the bus service versus a regional jet, Delta could operate additional services, minimizing connections. Unlike a regional jet, which is extremely cramped and offers very little room for passengers to spread out, a bus, while not extremely spacious, offers more room and comfort for most passengers. Moreover, some bus companies have started to outfit buses with Wi-Fi Internet access, enabling business travelers to be more productive on the road. Like planes, most buses have overhead compartments, and there is ample room in large buses for both carry-on and checked baggage.

And though small regional jets would likely be the clearest targets of this scheme, this does not mean that the markets bus services are used in are necessarily small. Regional jets help provide both capacity, but more importantly frequency. On some high-density, inter-city routes that have a lot of traffic, airlines could offer bus service to replace flights for lower-yielding passengers, adding capacity economically.

American currently flies several times daily between Milwaukee and Chicago O'Hare on 44-seat regional jets. If a passenger needs to travel between Milwaukee and Raleigh-Durham, but purchases a very discounted ticket, then American could bus that passenger to O'Hare, about an hour and 45 minutes away, and then fly him or her to Raleigh, saving the airline a considerable amount of money, and enabling the carrier to offer more reliable service during weather and air traffic control delays.

So this begs the question; why wouldn't a customer merely drive the distance themselves instead of putting themselves in a crowded bus with a bunch of other people? Given the rising cost of airport parking, gasoline, and the hassles driving entails, a strong case can be made for taking the bus. Moreover given the convenience of taking the bus (departing and arriving at a boarding gate in the terminal), and the potential comfort benefits (being able to use the Internet or watch movies instead of driving), many customers would readily take the bus instead of their own vehicles. Does this mean that all passengers will be swayed? No, but as long as most are, then offering bus service seems like a reasonable alternative and can help airlines keep valuable business travelers.

Would buses be an ideal solution? Hardly. They will likely be slower in most cases, and some passengers may find them quite frustrating. Time-crunched business travelers (those who provide airlines with their profits) might choose alternative options if the choice was between a bus and a flight on a different airline, and this is something airlines have to be careful with. If business travelers are strongly against the idea of a bus, then this idea may not fly at all. But, if carriers can demonstrate that the bus would not add a significant amount of time to their trip (this means timing buses with key connections), while enabling them to improve productivity, then some could be swayed.

Given the absolute necessity for airlines to cut costs, short regional flights are a place to start. This will hardly be a solution to the airlines' larger problems with fuel, but if carriers are looking for ways to trim excessive fuel usage, bus service should legitimately be considered.