"Michigan's Capital City Airport revitalization facing challenges"

Saturday, October 5, 2002

Capital City Airport revitalization facing challenges
Airline woes, weak economy add to struggle 
by Lori Hayes
The Lansing (MI) State Journal


More airlines. More flights. Lower fares. More passengers.
  
All have been achieved at nearby airports in Flint and Grand Rapids. Yet
Lansing's Capital City Airport has fallen behind, with declining numbers
of passengers.

Revitalization efforts have begun, but achieving vitality at Capital
City will be a struggle. The airport is up against an ailing economy, a
volatile airline industry and a slow-growing population in mid-Michigan.

Aviation experts say Capital City may have to cater to business
travelers and give up hopes of attracting a discount airline for leisure
flights, while community leaders say the airport must expand its reach
in the area and muster up regional support.

"Until we can reach the pocketbooks of our constituents, then you're not
going to see them coming back to Capital City Airport," airport board
member Victor Celentino said.

That will be a priority of the airport's new executive director. The
Capital Region Airport Authority on Monday will pick from five finalists
for the job, which will pay between $85,000 and $120,000 a year. 

On all fronts, the expectations on that person will be enormous. And the
challenges even greater.

In its search for a director to replace Tom Schmidt, who retired in
March, the airport is looking for someone to boost air service and draw
back passengers. The board hopes expanded service will increase
competition and drive down fares.

Local officials want more aggressive economic development, area pilots
want more focus on general aviation and travelers want more direct
flights.

"We need more nonstop flights to more places, especially your major
cities," said Joanne Brown of Lansing. "Orlando should not be a big deal
to us."

Brown is flying to Orlando later this month. She compared Lansing's
fares with nearby airports and chose Detroit because it was the cheapest
and she could get a direct flight.

"I would have preferred Lansing. Everything here is convenient, but
price is the bottom line," said Brown, who added that she also would
like to see updates to Capital City's terminal, such as more food
choices, vacation charters and more decor that promotes the city.

Catering to residents

Airport board members say the community's goals are within reach.

"I'm king of wallowing in their expectations because for so many years
there were no expectations," said Richard Baker, chairman of the airport
board. "Nobody was talking about us before.

"We would like to be known as the best airport of its size in the
country. I don't know if we'll make it, but we're going to give it a
heck of a try."

Five airlines offer 24 departing flights a day to six major cities.
Northwest Airlines is the primary carrier.

Northwest is the only carrier flying full-size jets into Lansing. The
other four carriers use regional jets and turbo prop planes.

"Because of their dominance, look how much the tickets are," Celentino
said about Northwest.

Battling the reputation as the most expensive area airport, Capital City
is more competitive than a year ago, said Kevin Hamilton, president of
Spartan Travel, the area's largest travel agency.

"We tell our clients that there is a value to fly out of here," he said.
"When the price is right, they make that decision every time."

Still, airport leaders have been working to recruit more airlines,
particularly a discount carrier.

Attracting new airlines is a steep challenge for regional airports such
as Capital City, and the odds are even greater now, said Mike Boyd, an
aviation consultant in Evergreen, Colo.

"If they're hiring a new director and requiring him to bring in new
airlines, my advice is to get him his severance package now," Boyd said.
"There aren't many airlines out there to attract. Nobody wants to take a
risk."

Airline analysts estimate the industry will lose $8 billion by year's
end, passing last year's $7.7 billion loss.

As airlines beg Congress for financial help, the six major carriers -
Delta, Northwest, American, US Airways, Continental and United - have
cut more than 70,000 jobs, idled 267 planes and cut routes. US Airways
has filed for bankruptcy.

Airline ridership dropped dramatically after the terrorist attacks on
Sept. 11, 2001. One year later, passenger numbers worldwide have
stabilized and are expected to rebound next year - if the economy
recovers.

Falling numbers

Although local boarding plummeted after Sept. 11, Capital City's numbers
had been falling for three years.

The airport was growing at a record pace in the mid-1990s, spending
millions on expansions and renovations of the terminal and runway. But
in the past two years, the airport lost three airlines - American Eagle,
discount carrier American Trans Air and Continental Express. The drop in
competition pushed up fares, which drove passengers to airports in
Detroit, Grand Rapids and Flint.

In the summer of 2001, ridership was down about 9 percent from five
years ago when Capital City - once the state's third-largest airport
behind Detroit Metro and Grand Rapids' Gerald Ford International Airport
- fell to No. 4 behind Flint's Bishop International Airport. The
terrorist attacks then fueled a 30 percent drop in passengers in 2001
over 2000.

As the airport struggled, expansion plans and airline recruitment
efforts were put on hold. Ridership has recovered some, seeing its first
monthly increase in 3¬Ý1/2 years in April. However, passenger counts are
still down 7 percent for the year.

Lansing, Boyd said, is hurt by a stagnant population. From 1990 to 2000,
the number of tri-county residents grew 3¬Ý1/2 percent, according to
U.S. Census Bureau data.

In contrast, Grand Rapids' Kent County population grew nearly 15 percent
during the past decade. And Flint is benefiting from a 10 percent
population increase in neighboring Oakland County. Both also are
supported by a substantial business presence in their regions.

Capital City, however, is not a dying airport, Boyd said. But it may
have to adapt its role, catering to the time-sensitive business traveler
rather than the leisure traveler who will drive an hour for a cheaper
seat.

And rather than focusing on gaining new airlines, Capital City needs to
work to upgrade its current service, encouraging airlines to fly to more
cities and on larger jets, Boyd said.

In Flint, AirTran Airways, a discount carrier, has generated a 130
percent gain in ridership since it came to Bishop six years ago.

Lansing's hope of getting a discount carrier in today's flying
atmosphere may be unrealistic. Most low-fare airlines, such as AirTran
and Frontier, are only going to major cities, Boyd said.

And for business travelers, low fares are not always the top concern,
said John Pearson, vice president of economic development for the
Lansing Regional Chamber of Commerce.

The convenience of Lansing is appealing, if passengers can get where
they need without too many delays, he said.

"They want direct flights. They don't want to be up and down, up and
down," Pearson said.

Getting on track

Once the new director is on board, the airport board will begin
developing its first strategic plan, a list of priorities and goals.

The first step will be a daylong forum with community and business
leaders. The board hired a Detroit firm to spearhead the forum for
$25,000.

Baker said the board is looking for creative strategies to increase
business.

Each of the executive director candidates threw out ideas to boost
service, from partnering with similar-sized airports to targeting
travelers beyond the tri-county region to hiring a full-time air service
development director.

"We've simply not had that kind of creative approach taking place in the
past," Baker said. 

Baker said the airport also needs to be a more active player in the
region's economic development, bringing in businesses to develop 126
acres of vacant land the airport owns.

"We're not providing the leadership that I think the airport can," he
said.

The airport authority is pushing for funding and participation from all
three of the tri-counties. 

The 2,150-acre airport has a $5.9 million operating budget. Ingham
County and Lansing residents pay 0.11 of a mill to support capital
projects at the airport, which is in Clinton County on the border of
Eaton County.

Ingham and Lansing leaders want Eaton and Clinton to contribute. They
are working a plan for a new authority board that would include
representatives from all three counties and the city. The airport board
now has three members appointed by the Lansing mayor and three members
chosen by the Ingham County Board of Commissioners. 

"It's time the region steps up to the plate to help this transportation
center," said Celentino, who also is an Ingham commissioner.

The new director will be expected to pick up efforts already in place.

Boosting efforts

Airport leaders have been visiting airlines for several months to
recruit new service, and the airport launched efforts to improve
customer service in the 10-year-old terminal, such as adding an
information desk and a business center.

The airport also has run advertising campaigns touting Capital City's
convenience, cheaper parking and shorter lines.

The airport is spending $279,000 this year on marketing the airport. In
comparison, Flint - which brought in two new carriers in the past six
months - has an $800,000 marketing budget in addition to a full-time
marketing director.

Efforts here must be more aggressive, Lansing Mayor David Hollister
said.

Hollister has been a staunch critic of the airport in recent years,
pushing for better service. This fall, he appointed his chief of staff
to the airport board.

Hollister got more involved in the airport's development a few years
ago, after General Motors Corp. announced plans to build two
state-of-the-art plants in the region that will draw international
attention.

"We're going to be a show-and-tell for the world, and we better have
adequate facilities to accommodate their wishes and schedules,"
Hollister said.

Attached Photo:

Passengers get ready to check in last week at Capitol City Airport.

capital_city.jpg