A $100m Expansion and Hub for Low-Cost Airlines: Is This The Future of Tweed New Haven Airport?

ROME – A new terminal, a longer runway, 11,000 jobs, and a base for a budget airline. These are the main points of the Tweed New Haven airport expansion project in Connecticut. The expected investment is around $100 million.

While Republic Airways, which operates on behalf of American Eagle, will terminate 5-weekly flights to Philadelphia on September 30, ULCC Avelo Airlines has announced four new destinations starting November 2021 (Gilbertson, 2021).

There’s once more a great deal of talk about Avelo because it’s the only airline to make uncommon choices in a highly contested market. Airline’s propositions raise doubts, but they have their own logic.

The brief analysis is based on a single question. Will the arrival of a low-cost airline and the expansion of the airport be the key to breaking the impasse?

The airport is owned by the City of New Haven, run by the Tweed New Haven Airport Authority, and managed by Avports LLC, a subsidiary of Goldman Sachs. The airport is surrounded by homes that could become a cause of project failure.

Although on the East Haven side the airfield borders the largest industrial park in the area where businesses are still relocating (Santiago, 2021).

Avports will commission an in-depth noise study within five years of the FAA approval and will invest up to $1.75 million for noise mitigation programs, as a part of an approximately $5 million community investment.

But the company is also committed to mitigating environmental and traffic problems with a community investment of $5 million (The New HVN, 2021).

The $100+ million investment is set to be split into $70 million by 2023 for major upgrades and $45 million for a 74,000 square-foot new terminal. As recommended by the master plan, the runway would be stretched from 5,600 to 6,635 feet.

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The plan also includes the creation of a 271-space car park by converting the decommissioned crosswind runway. Using the existing floor will help to reduce the number of paved surfaces, adding a rainwater retention capacity, without affecting the neighboring properties (Zaretsky, 2021).

Avelo has committed to invest $1.5 million to upgrade and modernize facilities, including the current terminal on the New Haven side. The airline aims to base three 147-seat Boeing 737-700 aircraft at the airport by the end of the year and add approximately 175 pilots, flight attendants, technicians, and customer support staff.

It has also announced plans to begin flight operations to Fort Lauderdale, Fort Myers, Tampa, and Orlando in November 2021.

According to data from the Department of Transportation, Florida is the busiest domestic destination in Connecticut and New York states (US DOT, 2021).

At Hartford Bradley International Airport (BDL), CT, which is 37 miles from New Haven, the U.S. LCC JetBlue is the first airline with a 19% share, followed by Southwest at 18.80%. The busiest 2020-21 destinations are Orlando, Charlotte, Atlanta, and Baltimore.

Florida’s cities Fort Lauderdale, Tampa, and Fort Myers are also on the list of the top 10 destinations.

At Westchester County Airport (HPN) in White Palms, NY, which is approximately 50 miles from New Haven, the airline with the largest presence is again JetBlue with a 78.75% share, followed by PSI with 11.85%. The top destinations are West Palm Beach, Fort Myers, Fort Lauderdale Orlando, and Tampa.

At New York LaGuardia Airport (LGA), legacy carriers have the largest share with Delta at 26%, American at 24%, and the low-cost Southwest at 12.22%. LaGuardia’s top destinations are Atlanta, Fort Lauderdale, Miami, Dallas, and Orlando.

At New York JFK, JetBlue holds a 47% share, followed by Delta and American Airlines. The top destinations are Los Angeles, Miami, Fort Lauderdale, Orlando, and San Juan.

A low GDP per capita in the area (Open Data Network, 2017) and the presence of an American Eagle-operated flight may have been the root cause of the low passenger demand in Tweed-New Haven.

But the scenario could radically change with the entry of a low-cost airline.

The connectivity that, at present, favors well-off people, often associated with employees at Yale-New Haven Hospital and students at Yale University, could become extremely affordable to anyone, as one-way fares to Fort Lauderdale, Fort Myers, Orlando, and Tampa Bay start at $59.

Avelo Airlines and the New Haven Airport have also launched a “Pick and Pack” sweepstakes that offer 25 Connecticut residents a free pair of tickets (Avelo, 2021).

However, the reason why no other airlines have preceded Avelo in the choice of the airport remains an open question. There are, however, some considerations to make in this regard.

The length of the Tweed New Haven runway places constraints on the maximum take-off weight (MTOW) and therefore airlines would be forced to operate smaller aircraft. For this reason, Avelo will base at HVN the 737-700, unlike the West Coast where the ULCC flies the bigger 737-800.

In addition, the other airlines have already consolidated operations in nearby airports fitted with facilities, instead of going for the row condition of HVN.

The latest state of affairs that could affect future choices, unlike a decade ago, is the economic growth of New Haven from which derives the need to ease travel. The presence of educational institutions and health care facilities are said to serve as a dual economic driver.

Plus, New Haven is projected to grow as a bioscience hub favoring thousands of jobs (Zaretsky, 2021). According to local media, the city had also granted 1,405 housing permits between 2018 and 2020, as compared to 1,290 between 2011 and 2018 (Turmelle, 2020).

The center of the state’s economic growth seems to be New Haven, in contrast with Hartford. Thus, it would make sense to expand air service to the coastal area. Tweed is also more central and has fewer issues than Sikorsky Memorial Airport in Fairfield County, CT.

The municipal airport, owned by the city of Bridgeport, is built in a swampy area 15 miles from New Haven, and the extension of the two runways, which are only 4,700-feet long, appears to be unfeasible.

Nevertheless, if the ULCC plan works, it’s foreseeable that other budget airlines can land at HVN. The paradox is there’s no other carrier in Tweed, but the routes announced by Avelo are the most demanded in the area.

Inevitably, Avelo can get its share of the market only if accompanied by a formidable marketing campaign that will bring people to a ghost airport, what Tweed New Haven is today.

“Connecticut residents told us they want more convenient and affordable options for flying to Florida and we listened. These four popular sun-soaked destinations are an ideal winter retreat, “said Avelo Chairman and CEO Andrew Levy (Avelo, 2021).

In conclusion, Tweed-New Haven airport could be reborn as a hub for low-cost airlines, assuring a limited number of daily flights, but essential for the economic growth of the area.

“None of these things are easy,” said Sean Scanlon, executive director of the airport authority. But he believes the risk is worth it. “If we can finally get this airport to be self-sustainable, we no longer have to ask the taxpayers of New Haven and Connecticut to help us keep chugging along” (Haddadin & Smith-Randolph, 2021).

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About the author

Alessio Olivetti

UK-based journalist, analyst, private pilot.

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