XNA enplanements might not recover to 2019 levels for 3 or 4 years

Enplanements at Northwest Arkansas National Airport (XNA) in Highfill could fall to between 250,000 and 500,000 for 2020 and might not return to 2019 levels for three or four years, based on new projections from consultant Mead & Hunt.

XNA board members listened Wednesday (Sept. 2) to a virtual presentation by Ryk Dunkelberg and Ryan Hayes, both of Mead & Hunt, on the new projections. The updated projections show the airport might not return to 2019 enplanement levels until 2023 or 2024. In 2019, enplanements, or passengers flying out of the airport, rose 17% to 922,533, from 788,261 in 2018.

XNA staff had requested updated projections to better understand the expected impact of the COVID-19 pandemic as enplanements are used as guidelines for when improvements are needed. Dunkelberg noted enplanements drive peak demand, and this drives the needs of the terminal building.

“While the short-term picture is very murky and when XNA recovers and when the entire industry recovers from this pandemic is completely unknown, and there’s a lot of theories about it, from a long-term perspective the aviation industry is incredibly resilient,” Hayes said.

Hayes showed a chart that included economic downturns and wars dating back to 1950, and enplanements dipped after each but started to rise again.

“From a long-term perspective, XNA is going to recover, the passengers are going to be back and you’re going to need the space to accommodate all that passenger demand that we’ve been talking about for years,” Hayes said.

He said passengers have started to return to XNA at a faster rate than the nationwide average. Enplanements fell to a low of 3,151 in April and have since started to rise. In July, enplanements increased to 25,447; however, enplanements for the month were down 72.1%, from the same month in 2019. Between January and July, enplanements have fallen 57.7% to 222,214, from 525,454 over the same period in 2019.

The Mead & Hunt enplanement projections for 2020 ranged from pessimistic at 200,000 to optimistic at less than 500,000. The optimistic projection showed enplanements reaching 2019 levels again in 2023. The pessimistic projection showed reaching 2019 levels again in 2024. Hayes said the optimistic scenario would be if a COVID vaccine became available and the fear of boarding an airplane faded.

Mead & Hunt also provided a 2020 forecast showing enplanements at XNA would be 298,767. That would be lower than any year since 1998 when the airport opened. The projection was included as part of an enplanement forecast using several sources, including Volaire Aviation, S&P Global Ratings and Goldman Sachs. The average of the three projection sources showed enplanements are expected to fall 63% in 2020, from 2019. In 2021, enplanements are expected to be down 41% from 2019 levels. And enplanements are projected to be down 25% and 4% in 2022 and 2023, respectively. In 2024, enplanements are expected to be 949,797, up 3% from 2019 levels.

“In the next two to three years, it’s incredibly murky, and it’s anyone’s best guess what’s going to happen,” Hayes said. “From a long-term planning perspective, we are still forecasting enplanements to double at this airport.”

By the end of 2040, enplanements are projected to be 1.8 million, he said.

Before the pandemic in December 2019, Mead & Hunt had projected enplanements at XNA in 2040 would be an average of 2.88 million. However, a low-growth projection in the December model showed enplanements would be 1.69 million in 2040.

Board members discussed the recovery of flight demand, and Hayes noted corporate travel policies have impacted business travel demand for carriers, including American Airlines, Delta and United Airlines. He expects the demand to rise as a result of COVID vaccines and treatments along with the rescinding of the corporate travel policies.

“Our theory is as soon as Walmart allows people to come back into the home office for meetings, any vendor of Walmart if they have the opportunity that they can increase their chances of selling to Walmart by 1%, they are going to fly here and meet in person,” XNA CEO Aaron Burkes said. “We agree completely with the theory there’s probably going to be a decrease in demand for a long time.”

Dunkelberg noted the impact on business travel considering the efficiency of hosting a virtual meeting as opposed to an in-person meeting.

“We’re getting to see what’s called Zoom burnout,” he said. “People are getting tired of these kinds of meetings after a while and really want to get back to meeting in person. I think it will rebound a little quicker than we thought maybe two or three months ago.”