"Florida airport determined to keep Delta"

Monday, August 9, 2004

Airport determined to keep Delta 
Panel freezes struggling carrier's fees 
BY WAYNE T. PRICE 
FLORIDA TODAY


Some members of the Melbourne Airport Authority, worried that
financially troubled Delta Air Lines could exit the city's airport,
started wondering out loud last week what kind of generous goodie basket
it could give the carrier to make sure it stays. 

How about taking a few million dollars out of the airport's fund reserve
and fully subsidizing the carrier's operations here for six months or
more, one member suggested. 

How about paying for all the fuel used by Delta's aircraft flying out of
Melbourne International Airport, asked another. 

While Melbourne airport attorney Don Nohrr quickly dismissed the
authority members' suggestions as against Federal Aviation
Administration regulations, it did show the length some officials are
willing to go to ensure Delta stays at Melbourne International. Mainly,
they're concerned Delta might opt to leave Melbourne as it maneuvers
through rough financial straits in the months ahead and looks to cut
costs. 

That would leave Melbourne International without a major carrier and
force more travelers to drive to Orlando International Airport for
flight service. 

The Airport Authority did decide to freeze at current levels, rather
than raise, fees charged to Delta to lease space and land its planes in
Melbourne. And there is a move to begin a community effort to raise
money for incentives to persuade Delta or other airlines to expand
flight service in Melbourne. 

Melbourne International Executive Director Jim Johnson stressed it is
unlikely Delta will leave the local market, even if the carrier does end
up filing for Chapter 11 bankruptcy protection. Delta flights out of
Melbourne typically are 80 percent to 90 percent full, a figure airline
experts call extremely good. 

And Delta said it has no plans to pull out of the Melbourne market. 

Still, last week, the seven-member Airport Authority unanimously agreed
to not raise fees for Delta in the upcoming fiscal year that begins Oct.
1. 

Originally, airport budget officers suggested a 3 percent, or
approximately $18,000, cost-of-living increase in fees for Delta -- on
such things as landing fees, and leases for terminal and baggage spaces.


"I don't think Delta doesn't expect a cost-of-living increase," Johnson
said. "Maybe that overture will speak well of us to Delta. And we'll
certainly make them aware that we're giving them that." 

Airport Authority member Titus Hall said that, for him, the reason not
to increase Delta's fees was much simpler. 

"Why raise their expenses when they're hurting?" Hall asked. "That's
like kicking someone when they're hurting." 

To stop some of that hurting, civic and business leaders in many
communities with smaller airports are raising funds in hopes of it being
matched by a special Federal Aviation Administration grant program to
stimulate new service. 

Each year, the FAA makes a total of $20 million in matching grants
available for 40 small U.S. airports through its Small Community Air
Service Development Program. That money can be used to help subsidize an
airline by guaranteeing a certain number of seat purchases for new
service. 

Airport money can't be used in the matching-grant program, but funds
from businesses and governments can. 

Johnson wants community leaders to launch a campaign to raise at least
$200,000 by next June in hopes that Melbourne International could
qualify for a matching FAA grant, which could be used to help establish
service to Washington, D.C., Boston, Chicago or another popular
destination. 

Two years ago, Daytona Beach International Airport received $743,333
from the program to begin two daily flights to Newark, N.J., using
Continental's regional jets. 

"It worked extremely well in Daytona," Johnson said. "They were able to
bring Continental Airlines back to Newark. And, in the second year, it
added more service to Newark, and then added Cleveland on top of that.
It really showed how well the program can work." 

Jim Ridenour, chairman-elect of the Melbourne-Palm Bay Area Chamber of
Commerce, said he doesn't know if the matching-grant fund-raising effort
will succeed or not. But it's important for airlines to know the local
business community will do what it can to attract more flights to
Melbourne. 

"I think it's important for community business leaders, on behalf of the
airport and on behalf of the chamber, to let the various airlines know
that we're very interested in attracting more flights," Ridenour said. 

For some community airports, it's too late. A recent USA Today study
showed at least 22 U.S. airports have lost, or are losing, all airline
flights during the past three years because of the harsh economic
conditions of the airline industry. 

"Certainly, there are a number of communities looking to find ways to
retain air service," said aviation consultant Michael Allen of the New
Haven, Conn.-based Back Aviation Solutions. "Some airports are very
close to very high-frequency airports. And, for the smaller airports,
it's a little bit more challenging." 

The grants are useful in persuading airlines to start or maintain
service, Allen said. 

Atlanta-based Delta is the only major carrier with a presence at the
Melbourne airport, and most of the flights from Melbourne are routed
through Hartsfield-Jackson Atlanta International Airport in Atlanta. 

Flight service is through Delta's wholly owned subsidiaries, Atlantic
Southeast Airlines and Comair, and Delta main line, which flies 142-seat
McDonnell Douglas aircraft out of Melbourne daily. 

Continental Airlines and Spirit Airlines both ended flights to Melbourne
International as the aviation industry retrenched following Sept. 11,
2001, terrorist attacks.


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