"Chattanooga, Tenn., Airport to Cut Landing, Terminal-Rental Fees"

Wednesday, May 29, 2002

Chattanooga, Tenn., Airport to Cut Landing, Terminal-Rental Fees
Chattanooga Times/Free Press, Tenn.


Chattanooga Metropolitan Airport officials plan to cut landing and
terminal rental fees for airlines in hopes of spurring more service.

"It's a marketing tool," said Mark VanLoh, Airport Authority president.

Mr. VanLoh said Chattanooga's airport may be one of the few in the
country to make the move this year. He said landing fees at the airport
are high compared to others in the Southeast, and the facility is
controlling costs to permit it to make the cuts.

Airport Authority Chairman Lloyd Stanley said the action is unusual.

"In the economy today, it's unusual there will be a cut on anything. I
don't care if you're buying a sack of potatoes at the grocery store or
taking a vacation,"he said. Mr. Stanley said the action shows the
airport is trying to make itself attractive to the airlines.

But Mr. VanLoh said officials are looking at dropping landing fees about
10 cents per thousand pounds. Currently, the airport charges about $2
per thousand pounds.

Terminal rent fees could drop $1 per square foot from about $28, said
the airport official. The last time landing and terminal rent fees were
dropped was in 2000, said Debbie Gregory, the airport's senior vice
president for finance. She said a proposed new budget calls for total
landing and terminal rental fees collected to drop by $63,000, or off
about 4 percent from the current year.

Atlantic Southeast Airlines spokesman Kent Landers said while it hasn't
been informed of any cut, fees are a factor in how much service an
airline provides an airport. Still, the primary issue that drives
service is market demand, said the airline spokesman.

"Our flight schedule is driven by the demand in the market,"said Mr.
Landers.

The airport recorded an 8.9 percent drop in traffic in April over the
prior year. Mr. VanLoh said traffic was down 12.9 percent on average
nationally last month.

Still, airport officials hope to use the reduced operating costs as
another incentive to woo more service to Chattanooga. Mayor Bob Corker
last week announced he is forming a task force to look at innovative
ways of attracting airlines.

Airport officials have been meeting with airline officials this year in
an effort to boost service and cut fares, and they think the strategy is
working.

At a meeting of the Airport Authority, officials showed a comparison of
Chattanooga's fares to 11 key cities, including to New York City,
Orlando and Los Angeles. For a 14-day advance purchase ticket for travel
Monday through Friday, Chattanooga to New York was $277 round-trip. The
fare from Atlanta to New York was $207.

"The fares are doing well in response to discussions,"said Mr. VanLoh.

Airport officials said they expect to see savings this year from the
refinancing of bonds that were issued in 1990 for the terminal building.
The Airport Authority agreed to a new bond issue of up to $17 million, a
major part of which is the terminal refunding. The new bond issue is to
close in mid-June, officials said. A new taxiway project on the west
side of the main runway is included in the bond issue.


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