"Columbus, Ga., Airport Grapples with Loss of Airlines, as Recession Lingers"

Monday, March 31, 2003

Columbus, Ga., Airport Grapples with Loss of Airlines, as Recession Lingers
The Columbus (GA) Ledger-Enquirer


For Columbus Metropolitan Airport, its past eight years have been filled
with a queasy turbulence. 

   -- Commuter airline American Eagle's three daily flights between Columbus
and Nashville, Tenn., were discontinued in October 1995. 

   -- Less than three months later, Delta Air Lines halted three daily jet
flights. Its subsidiary carrier, Atlantic Southeast Airlines (ASA), was left
to carry the load between the city and Atlanta. 

   -- Northwest Airlink, another commuter operation, stopped three daily
flights between Columbus and Memphis, Tenn., in June 2001. 

   -- Then, in February, US Airways Express, a connection to the airline's
hub in Charlotte, N.C., pulled the plug on its three flights a day after its
parent company filed for bankruptcy. 

All of the carriers cited financial pressures in choosing to leave Columbus,
whose airport serves an estimated regional population of about 500,000
people. "Business decisions," they called the moves. 

Nonetheless, the number of flights before the exodus began in 1995 was 19 a
day to four major airports. Today only ASA remains, scheduling six daily
flights between Columbus and Atlanta's Hartsfield International Airport,
just 83 air miles to the north. 

"We have nowhere to go but up," Mark Oropeza, airport director, said in a
recent interview inside the $12 million terminal, constructed in 1991. 

Not that he's panicking. Oropeza knows intimately the challenges facing the
airport that once had nearly 30 commercial flights daily before the U.S.
government deregulated the airline industry in 1978. 

Its geographical distance places the terminal within an easy drive to
Atlanta, Delta's hub. ASA has a reputation for unreliable service, one that
was gained in the 1990s when aircraft problems would strand travelers in
Atlanta. There's the lack of marketing by competing carriers once they are
in the market. And there's the sense that the community does not truly
embrace newcomer carriers and use their services to keep them here. 

Further hampering the airport has been a recession that began rippling
through the economy in early 2001 which put pressure on all of the nation's
airlines. The industry began teetering on the edge of financial ruin after
terrorists struck the United States on Sept. 11, 2001, and travelers began
to stay home or drive more to leisure and business destinations. 

The timing could not have been worse for Columbus Metro and other
small-market airports looking to keep what airline service they have and
expand on them. 

"I don't have a real good answer for you just because of the turmoil the
whole airline industry is in right now," Oropeza said when asked what the
solution is to Columbus Metro's predicament. 

A study released in January by the U.S. General Accounting Office noted the
dire situation facing airlines and the airports they serve. It said the
airline industry had lost $6 billion in 2001 and that losses were expected
to hit $8 billion in 2002 with forecasts calling for the slump to continue
at least through 2004. 

Airlines have been reducing their flight schedules and leaving smaller
airports across the country, the study said. Of 98 airport officials
interviewed in the study, 83 said they were experiencing passenger
"leakage." That's the term for travelers who leave a local market and drive
to a larger airport in search of more airline choices, better schedules and
lower fares. 

Washington, D.C.-based PA Consulting Group, which has done studies for the
airport, estimates two-thirds of local air travelers are leaking out of the
market and driving to Atlanta. 

"You have a situation where there's not that much of an incentive for Delta
to improve its service, whether that means reliability, whether it means
equipment, whether it means flying to new destinations," said Barney
Parrella, a consultant with PA Consulting. 

Parrella said two things need to happen for the city to land additional air
carriers. First, the community has to make the decision to launch and
embrace an aggressive, concerted campaign for luring more airlines. Then it
has to pony up money in the form of revenue subsidies or a travel bank that
guarantees passenger fannies in airplane seats. 

That's what Pensacola Regional Airport did in 2001. And it appears to be
working. 

"Our business travelers were being reamed big-time when they were flying
middle of the week without a Saturday night stay or two-week advance," said
Belinda Zephiri, marketing manager for the Florida Gulf Coast airport that
handles about 630,000 passengers a year. "It was costing them $1,000 to
travel 45 minutes to Atlanta by air" aboard Delta Air Lines." 

Pensacola and its business community set about to attract a low-fare carrier
that would compete with Delta and drive travel costs down. The airport
targeted Orlando, Fla.-based AirTran -- the second largest carrier in
Atlanta -- and began courting the airline and raising money for the travel
bank. 

The community asked corporations if they would divert 30 percent of their
annual travel budgets to the bank account for two years. Any money left over
when the agreement ends this November will be given to contributing firms in
the form of travel vouchers. 

In the end, Pensacola raised about $2 million of its $4 million goal, enough
to land AirTran at the airport and force Delta to match the airline's
midweek standby fare to Atlanta of $350. 

On the other hand, Chattanooga Metropolitan Airport has decided against
striking up any sort of deal with an airline to enter its market, said Mark
VanLoh, the airport's president and CEO. That decision was made despite a
task force report last fall that said the airport needed to double its
290,000 annual boardings to lure a low-fare carrier and become a player in
the air service industry. 

Like Columbus and 150 other midsize markets, Chattanooga longs for a carrier
like Dallas-based Southwest Airlines, which is famous for its customer
service and $98 roundtrip fares. 

VanLoh said the task force looked at the travel bank idea and decided
against it because there is no guarantee that the airline will stay when the
fund goes away. 

"It's expensive and it's a gamble," VanLoh said. 

The focus in Chattanooga, which has 52 flights a day and is located about
100 miles northwest of Atlanta, is to stick with the basics. That includes
developing a reputation for customer service, offering incentives for repeat
customers and taking care of the airlines already in the market. 

"I still go see Southwest every year just to pay homage," VanLoh said. "But
I think our really big responsibility is to go home with the ones that
brought us to the dance. These airlines have been here through thick and
thin and I go and meet with them. We talk about new cities and new routes,
and we keep trying to help them out." 

In Columbus, Oropeza said part of the solution to adding airlines is getting
Fort Benning to use the facility more. About 16,000 infantry and basic
training recruits move through the post every year. Thousands more go
through a variety of advanced infantry training courses. That's on top of
the 25,000 or so permanent and temporary duty uniformed soldiers who move
about on the installation any given day. 

Fort Benning and the airport have talked in recent years about how to
increase business between them, said Chuck Walls, the post's garrison
manager. But the situation is somewhat of a Catch-22. Airlines require some
form of commitment that travelers will consistently use their service before
setting up a station here, Oropeza said. Fort Benning, on the other hand,
said more airlines and flights are needed in Columbus before it can stop
funneling soldiers through Atlanta. 

"We do use the Columbus airport quite a bit and we like using it because it
is more convenient," said Walls, estimating more than 35 percent of Fort
Benning travelers use the local facility. 

"The only challenge is it's a volume issue," Walls said. 

One area that isn't a major stickler for the post, Walls said, is the price
of doing business with the Columbus airport. The government will pay air
fares that often -- but not always -- can be higher flying out of Columbus
than Atlanta. But he admits Columbus isn't always his first choice when
choosing an airport from which to depart. 

"As a personal user, I will drive to Atlanta because it's a little cheaper
for me to pay the gas and parking or just take Groome Transportation than to
pay that much more on a ticket," Walls said. "If the difference is anything
between $80 and $100, I can still do it cheaper just driving up myself or
taking Groome." 

Donna Comer, owner of Travels by Donna travel agency in Columbus, said most
of her clients shop around for the lowest fare. And a good number of them
will opt for an alternative airport in Atlanta or Montgomery, Ala., and pay
a $40 shuttle fee or drive themselves. 

Air fares are set by airlines, not the airport. 

"It is a pocketbook issue," Comer said. 

The Greater Columbus Chamber of Commerce is working with the Columbus
Airport Commission -- which owns and operates the airport -- to come up with
long-term solutions to its dilemma. The chamber uses the airport as a tool
to recruit companies to the area and entice existing businesses to expand. 

A lot of ideas have been thrown on the table so far, said chamber president
Mike Gaymon, including turning the airport into a multi-transpor- tation hub
that could include air, bus, limousine and, eventually, rail. But there's no
sure-fire answer on the horizon, he said. 

"If the reliability's not there, if the pricing's not there, if the whole
airline industry is such that for whatever reason people will still get in
their cars and drive or will get on the transportation companies and drive,
then that's the marketplace and we have to deal with it," Gaymon said. "In
one respect, the customer is going to decide ultimately who wins and who
loses. It won't be the airport commission." 

Columbus Metro has yet to fully explore the impact on the airport of losing
US Airways Express, Oropeza said. The operation is already very lean in
personnel, he said, employing about 30 people, which includes its police and
fire departments. No layoffs are anticipated, he said. 

Oropeza, the man who has shepherded the airport since 1986, appears
determined to remain cool and calm through all of the turbulence it is now
encountering. He does have a $2 million reserve fund to put him at ease. 

"Right now if the revenues are off enough and we have to tap the $2 million
account, we'll go tap it," he said. "We don't want to, but that's why we
kept it there, so that we didn't have to go to the taxpayer or the city and
say, 'Please, please bail us out.' 

"It gives us some breathing room to think this thing through rather than go
into a total panic mode."


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