Saturday, May 13, 2006 Charting a course Airport wants to be more competitive By D.R. STEWART Tulsa (OK) World Tulsa residents have relatively good airline service in terms of non-stop destinations, number of departures and air fares compared with similar-size cities nationwide, a consultant has advised Tulsa Airport Improvement Trustees. While air fares are generally lower in Tulsa than Wichita, Northwest Arkansas and Will Rogers World Airport in Oklahoma City, Oklahoma City is attracting more passenger traffic and is becoming a more attractive air service market to the airlines, the consultant says. "Passenger traffic didn't drop as much in Oklahoma City as it did in Tulsa after 9/11 because the government keeps traveling," Robert Hazel said of the traffic generated by the state capital, Tinker Air Force Base and the Federal Aviation Administration's Mike Monroney Aeronautical Center. "In 2000, passenger traffic at Tulsa and Oklahoma City was almost dead even. Today, Oklahoma City's traffic is 13 percent higher than Tulsa's in domestic passengers. "This is not a trend we want to see continue." In 2000, Tulsa International's passenger traffic was 3.59 million travelers, 2.5 percent more than Will Rogers' 3.48 million passengers. By 2005, Will Rogers' traffic rebounded to 3.57 million passengers, 10 percent more than Tulsa International's 3.23 million. "We recognize that we need to improve, and we are going to be pro-active about it," said Tulsa Airports Director Jeff Mulder. "We're going to put together a plan to develop air service in this community." Hazel, senior vice president and managing partner of Eclat Consulting, a Reston, Va.-based air service research firm, has been retained by Tulsa airport trustees to help airport staff develop a marketing plan to expand air service at Tulsa International Airport. Eclat is being paid up to $30,000 by the board for its work. Hazel told trustees on Thursday that the city is competing for air service with communities that are more willing than Tulsa to offer lucrative incentives for new or expanded air service. Oklahoma City, Hazel said, offers $50,000 to $200,000 in marketing support for new non-stop service. Airlines offering new non-stop service to the East and West coasts are eligible for $200,000 in incentives by Oklahoma City, he said. Tulsa International Airport awards up to $10,000 to airlines inaugurating new service. Although Federal Aviation Administration regulations prohibit direct subsidies from airport operating funds to airlines, they permit air carrier marketing assistance for new service and fee waivers during a promotional period. Incentives work, Hazel said. In Pittsburgh, city officials used economic incentives to attract discount carriers Southwest Airlines, JetBlue and AirTran, which caused a significant reduction in fares. Wichita has $33 million in state and corporate funding over the next five years to attract additional air service, Hazel said. "There have been lots of studies of the impact of new airline service," Hazel said. "The direct airport impacts include increased landing fees, rents and passenger facility charges. "In the local community, the impact includes additional employment. If you're successful in attracting low-fare service, then you're talking about a huge difference in air fares for the community, which is why Kansas devotes so much to attracting new air service." Hazel said investing airport-generated revenue in marketing assistance or lowering or eliminating landing fees for new airline service can generate an economic return 10 to 20 times more than the incentives offered. "Greater air service attracts still more airlines and air service," Hazel said. "Offering incentives involves small risk to the community compared to the risk of the airlines entering a new market." Hazel and Airport Marketing Director Mary Smith are developing marketing and incentive proposals with the advice of a business advisory group. In June, Smith and airport officials will attend a marketing and communications conference in Austin, Texas, sponsored by Airports Council International. "We hope to talk with six airlines: Continental, Northwest, United, JetBlue, Southwest and American," Smith said. Attached Photo: An American Airlines jet lands at Tulsa International Airport. While service is good at the airport, a new report says Oklahoma City is doing a better job attracting passengers.