"Lambert Field businesses brace for American's cutbacks"

Thursday, July 31, 2003

Lambert Field businesses brace for American's cutbacks
By Ken Leiser
The St. Louis (MO) Post-Dispatch

  
Companies that rely on the constant flow of passenger planes through Lambert
Field are bracing for potentially significant losses when American Airlines
slashes its flight schedule in half this fall. 

Many company leaders still are trying to bring the magnitude of American's
cuts into focus. The airline intends to turn the Lambert hub into an
operation that caters mostly to travelers who "live, work or do business" in
St. Louis. American's new schedule - which leans heavily on smaller regional
jets and turboprops - takes effect Nov. 1. 

The economic ripples could prove significant. 

Gate Gourmet Division Americas of Memphis, Tenn., which in May opened a new
110,000-square-foot, in-flight kitchen in Berkeley, said in a corporate
statement that the American service cuts will have "a very serious impact on
our business in that market." 
  
American is Gate Gourmet's largest customer in St. Louis. 

"We are evaluating the situation to determine the best course of action for
the St. Louis facility," the company said. "While we do not anticipate
closing the kitchen, we must either reduce costs or find new revenue to keep
this facility viable." 

New York-based Allied Aviation staffs the mobile hydrant trucks used to pump
fuel from the airlines' underground storage tanks into the commercial
aircraft using Lambert. 

Stan Czaplicki, Allied's vice president of sales and marketing, said fewer
flights will probably lead to layoffs among its 140-person work force. No
pink slips have been sent so far. 

Airport-area hotels and the company that matches them with stranded
passengers will feel the hit from service cuts as well, said Carolyn
Roberts, client relations manager for Airport Accommodations of Chicago.
Lambert is one of 18 airports it handles. 

Passengers whose flights are canceled either get a pink discount coupon or a
voucher entitling them to free lodging at the airline's expense - depending
on the circumstances that led to a canceled flight, Roberts said. 

Either way, participating hotels fill a room that otherwise would sit empty
for the night. Airport Accommodations booked 10,000 hotel rooms in the first
five months of 2003 - about half of them passengers who were catching a
connecting flight out of St. Louis. And those are the very passengers who
will become more scarce after American scales back. 

"I think they'll feel a huge twinge," Roberts said of the hotels. 

Joseph Uhl, area general manager at the 600-room St. Louis Airport Marriott,
said some local hotels consider temporarily stranded travelers to be an
important clientele. 

"Not just in St. Louis, but in general, there are more displaced passengers
from airlines than most people realize," Uhl said. 

Concession companies operating at Lambert certainly will share in the loss,
experts say. 

Pauline Armbrust, publisher of the Airport Revenue News of West Palm Beach,
Fla., said no concession company could have built this kind of airline
service cut into its business plan. Fewer planes will mean fewer people
buying magazines, snacks or drinks. 

"If they cut the number of bodies, it is going to have a big impact" on
sales, Armbrust said. 

Charles Wilson's Airport Shoeshine Corp., already was smarting, because
fewer people have been flying since the terrorist attacks of Sept. 11, 2001.
This latest piece of bad news "is going to kill everything," he said. 

HMSHost Corp. and Paradies-Concessions II-Arch Inc., the airport's two most
visible concession operators, acknowledge that the drastic loss of flights
will cost business. But neither company could predict how bad it will be. 

They're trying to remain optimistic. 

"We really see it as a short-term bump in the road," said Gregg Paradies,
senior vice president of the gift and news concession company at Lambert.
"We have seen many other airports that have recovered when they lost part of
a hub." 

HMSHost spokesman David Milobsky acknowledged that the loss of American
flights "certainly is a serious thing," because food and beverage sales are
driven by the number of ticketed passengers. 

Brian Kinsey, Lambert's aviation properties manager, said this week that
plans are going forward to develop a new restaurant and stores - likely to
include a Brooks Brothers and a CNBC-branded airport newsstand - in the C
concourse, despite the pending flight reductions. 

Mike Riley, president of Clear Channel Airports, whose Chicago-based company
runs the display advertising concession at Lambert, predicts the loss of
passengers will be short-term. Meantime, the company's target audience,
business travelers, still will show up. 

"Some advertisers will hee and haw over the numbers dropping," he said. "But
it is not going to be significant enough to really hurt our business that
much."

Attached Photo:

Kimberly Pitcher of Rockhill, an American Airlines flight attendant looks
over the golf merchandise at The PGA Tour Shops before flying to Boston,
Tuesday at the lower level of Lambert Airport's main terminal.

lambertlobby.jpg