[Archive Home][Date Prev][Date Next][Index]

         

"SC airport still seeks low-cost air carriers; no takers yet"


 
Tuesday, December 26, 2006

Airport still seeks low-cost air carriers; no takers yet
BY JASON SPENCER
The Spartanburg (SC) Herald-Journal


Business strategy rises to a new level when it comes to the airline
industry, which changes on a weekly -- and sometimes daily -- basis. But
despite that dynamic, deal making and deal signing is a gradual process that
involves skill, timing and luck.

Greenville-Spartanburg International Airport is courting at least five
low-cost air carriers.

The airport's traffic has taken a noticeable hit since the loss of
Independence Air, which operated out of GSP from early 2004 to early 2006.
The low-fare Allegiant Air began flights to Orlando, Fla., in November, but
that is its only destination from here -- compared to the 37 destinations
Independence Air served nationwide.

"The quest for a low-cost carrier is an ongoing quest," airport spokeswoman
Rosylin Weston said. "We are not operating in a vacuum."

The three people at Greenville-Spartanburg who share the task of landing a
low-cost carrier are airport director Gary Jackson, GSP's chief financial
officer Jack Murrin, and Weston. Jackson has been with the airport for about
20 years, while the others were hired in 1999.

Their strategy is one of networking, marketing and synthesizing efforts with
economic development projects -- though none of those will work unless an
airline thinks servicing the Upstate would be profitable. In other words,
airlines want to know they'll have passengers. And timing is everything.

"Air service in general is a process," said Dan Gibbs, a consultant with
Southlake, Texas-based Sabre Airline Solutions.

"It's not an event. It's a campaign, not a final battle. What they're doing
is correct: Yo.keep updating the carriers, yo.keep updating your stories,
yo.keep involved in industry events where yo.can know the players, and look
for situations where things are propitious, like with Independence Air."

In recent months, airport staff have been increasingly open about the fact
that the lack of competition from a low-cost carrier has driven up ticket
prices at GSP.

For example, in November, a same-day ticket purchase for a trip from
Greenville-Spartanburg to Los Angeles cost $832 -- compared to a $248 ticket
out of Charlotte-Douglas International Airport or a $258 ticket out of
Hartsfield-Jackson Atlanta International Airport under the same
circumstances.

A trip planned two weeks in advance would have cost a traveler $400 out of
GSP, versus $268 out of Charlotte or $318 out of Atlanta.

Spartanburg County GOP Chairman Rick Beltram, when not focusing on politics,
runs a food-service equipment manufacturer. He says he books three-quarters
of his business flights out of Charlotte to save money.

"It's hundreds of dollars difference," Beltram said. "When yo.do this two or
three times a week, it adds up over the course of a year."

Though Allegiant doesn't substantially increase the options a flyer has out
of GSP, if it is successful, it can be used as a tool to lure other low-cost
carriers.

As Gibbs puts it, "It gives yo.another arrow in the quiver, so to speak.
It's a demonstration that low fares really generate traffic, that a carrier
can come in and be successful."

"With the low-cost carrier, a big part of the case is to show that traffic
has been underdeveloped because fares have been so high, so that if a
low-cost carrier came in, it would stimulate a great deal of traffic," he
said.

"So, the carrier shouldn't just look at the traffic, but at the increased
traffic its presence could bring."

An eye on Denver

Strategies for landing a low-cost carrier can be as simple as staying in
touch with the various airlines. Jackson, Murrin and Weston attend industry
meetings, like the American Association of Airport Executives' annual
convention and the Airports Council International annual JumpStart event.

JumpStart features 20- to 30-minute meetings all day between airport
directors and airlines.

"It's a way to meet and build contacts, and keep the dialogue going on,"
Gibbs said. "And that's important, because this is a dynamic industry."

Gibbs has been associated with GSP since 2002, working under contract to
provide insight of various air service development projects.

Since 2002, Greenville-Spartanburg has spent about $50,000 on Sabre
services.

Gibbs recently completed a study that showed 35 percent of
Greenville-Spartanburg's potential passenger market "leaks" to other
airports -- most of the time, to Charlotte or Atlanta.

He also accompanied the GSP team to Denver-based Frontier Airlines in early
November.

Frontier has no immediate plans to announce flights to GSP, airline
spokesman Joe Hodas said.

Frontier meets with hundreds of communities each year, he said. This year,
only four or five new destinations were added. Next year, because of the
purchase of about 10 regional jets, Frontier likely will add about 15 new
markets, Hodas said.

"It was a good meeting," Gibbs said. "I think they were very impressed with
the area, the underlying population, the economy. They have a lot of
opportunities. They are besieged. There are many more airports seeking
low-cost service than there are carriers."

Greenville-Spartanburg employs "a number of consultants," Weston said,
including those who specialize in seeking new airlines or the expansion of
existing air service. Like Gibbs, they provide information that GSP
officials can use to make the airport here attractive to airlines.

But no one has been hired to specifically make calls or pitch GSP on the
airport's behalf.

And, anyone can pay for a study to make an airport look good.

"Sometimes (airlines) want to talk to yo.about your city and your community,
and they don't care about the numbers," said Bob Uhrich, director of air
service development at Savannah-Hilton Head International Airport.

"It's like, you're putting the numbers together and you're hoping they
agree. What yo.really want to do is to go in and tell the airlines something
they don't already know about your town: 'It looks like we're getting a new
factory, and their home office is in Dallas. That's why we need this.' Stuff
they don't know, that's what they want to know."

Seeking AirTran

Uhrich's point about using economic development as leverage in landing new
service or expanding existing service isn't lost on officials here. And it
works both ways.

While GSP officials realize that dealmakers try to keep economic development
projects close to their vest, "The airport needs to be at the table. That
way, we can go to an existing or new air carrier and say, 'This is a
business that needs your service,' " Weston said at a transportation summit
last month.

Such interaction has happened, though it's usually on a project-specific
basis, said Carter Smith, chief executive officer of the Spartanburg County
Economic Development Corp.

"If we knew that on the way in, that (a business prospect) would need
traffic to a specific area, we would contact the airport: 'Do we have
service to that airport? If not, what's the possibility of that of achieving
a gate at that one?' " Smith said.

In terms of total number of passengers, GSP and Savannah are about the same
size.

However, the low-fare carrier AirTran services Savannah-Hilton Head, while
GSP has tried (unsuccessfully) to land that airline.

Savannah won AirTran service in the mid-1990s, when the company was called
ValuJet. ValuJet held a contest to choose which city it would add to its
list, and Uhrich says Savannah basically stuffed the ballot box.

AirTran, which has its major hub in Atlanta and is the second-largest
carrier there under Delta, recently held another sweepstakes.

Online voters chose Sky Harbor International Airport in Phoenix as the next
city the airline should add.

Out of about 50 potential cities voters could choose from,
Greenville-Spartanburg wasn't on the list. Proximity was a factor.

"Because our hub is in Atlanta, any city that we start in would start with
service to Atlanta," AirTran spokeswoman Judy Graham-Weaver said. "And to
start in Greenville, or Chattanooga, or another city that's within driving
distance, yo.can't generate enough local traffic, because enough people
would drive to Atlanta."

If AirTran opens a second hub elsewhere, then GSP would become more
attractive, she said.

Gibbs, who said he has been directed in the past by GSP to contact AirTran
to gauge their interest, believes Greenville-Spartanburg should continue to
court the company.

"They really like the demographics, the economy of the area," Gibbs said.
"The biggest problem for them is the distance to Atlanta. The longer the
airplane stays in the air, the more economic the airplane becomes. It's more
efficient than taking off and landing in short stages."

Competing with other cities

In smaller markets, low-cost carriers would generally like some sort of
startup incentives, Gibbs said. A smaller carrier, too, would probably want
the airport to help get its name out, building its brand and mitigating some
of its start-up costs.

Incentives can be relatively small, or in some cases of international
service, can exceed $10 million, Gibbs said.

"More and more airlines are looking for those kinds of incentives," Weston
said at the summit, which was hosted by chambers of commerce in Greenville,
Spartanburg and Greer.

"Those usually come from the airport or the community or both. Generally,
GSP does not go to the table dangling untold amounts of money in front of an
airline, because if the passengers are there, they will come."

Rallying the business community to provide incentives is usually easier in
an area desperate for service, Gibbs said. If the only benefit of new
service is lower fares, that doesn't spur as much motivation, he said.

"If yo.have a company that flies its people all around the world to do
business, they may have an interest in saying, 'We would commit x number of
travelers or seats per year.' "

Such a commitment translates into a guarantee that a new carrier would be
able to fill a certain number of seats, which, in essence, is a commitment
of dollars, Smith said.

"GSP is in competition with virtually every other airport in the country for
air service, new air service and low-fare service in particular," Gibbs
said. "That's why it's important they have their campaign. Staying involved,
keeping on track, staying focused: It's a tough slog for cities."

 Do you have an opinion about this story?
Share it with other readers in our CAA Discussion Forums

http://www.californiaaviation.org/dcfp/dcboard.php


*****************************************

Current CAA news channel:


Fair Use Notice
This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of political, human rights, economic, democracy and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.html. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. If you have any queries regarding this issue, please Email us at stepheni@cwnet.com