Sure, e-mail, conference calls and videoconferencing are convenient, but there are times when there’s no substitute for a face-to-face meeting. So companies that do business nationwide can be at a disadvantage working out of a transportation-limited market like Baton Rouge.
One example of this impact: IEM, the emergency-planning firm founded here, announced in December that it was moving to North Carolina, in part because of the wealth of flight options from nearby Raleigh-Durham International Airport to Washington, D.C.
Jim Ellis, chairman of the Baton Rouge Metropolitan Airport Commission, says it’s a shame, because the facility’s infrastructure is top-notch.
“We know what the leakage is in this seven-parish region,” he says. “We’re literally exporting thousands of passengers a year to New Orleans, because of connections and price.”
People routinely fly into New Orleans’ Louis Armstrong International Airport, then rent a car and drive to Baton Rouge, he says. City leaders agree, but there’s only so much they can do.
“Baton Rouge desperately needs additional air service,” says Mike Futrell, the city-parish’s chief administrative officer. But the airlines will barely look at you unless you’re offering some kind of a subsidy, and other cities often are happy to pony up.
“We are at the table for those discussions, but we are one party among many trying to make that happen,” Futrell says.
The ultimate goal, he says, is greater service to Atlanta’s Hartsfield-Jackson International Airport. From that major hub, you can get pretty much anywhere. And more flights to and from Atlanta would create more competition for the airlines that already are in Baton Rouge, driving down costs. Right now, many destinations are significantly cheaper from New Orleans than from Baton Rouge.
Several years ago, the Metro Council created a $1 million airline incentive fund, and low-cost carrier Frontier took the bait in 2008. For seven months, Baton Rouge had service to Frontier’s hub at Denver International Airport; the airline used up about $577,000 of the fund before leaving.
Those flights were nearly 70% full on average, airport spokesman Jim Caldwell says. About 63% of Frontier’s local traffic headed to Denver, with the rest connecting to points beyond; Caldwell says Frontier wanted more connecting volume. It usually takes at least a year to really establish a market, so prospects for the route’s success were pretty good, but an untimely bankruptcy forced Frontier to cut back on regional jet service, he says.
“Airlines want a market to work,” Caldwell says. “They don’t want to go in and take incentives for a year or two and leave. They get a black eye, too, if it doesn’t succeed.”
Airlines like to feel comfortable that any new service will become profitable within a year or two. They consider factors like the level of competition, overall passenger volume and population, and the importance of each factor differs from airline to airline.
Low-fare carriers consider “market stimulation,” their ability to grow the market, an important factor. Such carriers are highly sought after, and the competition they bring forces other airlines to lower their prices. Popular tourist destinations like New Orleans tend to get more service than the originating traffic would appear to justify, which can hurt a neighboring airport like BTR, since many carriers prefer not to serve neighboring markets. When markets have similar prospects, subsidies come into play, and “the ante keeps going up,” Caldwell says.
Before Frontier, there was Las Vegas-based Allegiant Air, which announced service to Baton Rouge in 2004 before backing out, reportedly spooked by protests from local casino workers who thought their jobs might be imperiled. And before that, there was a flirtation with Spirit Airlines, which took $375,000 to do business with Melbourne, Fla., instead.
As high fuel prices, followed by a deep recession, squeezed regional carriers, competition for their services has only increased. There are fewer regional airlines flying fewer of the 50-seat jets that carry most of the traffic in and out of smaller markets.
“For smaller cities, it’s getting tougher and tougher, especially if you’re in a city where your passengers can drive to another airport,” says Benet Wilson, a writer and editor for the Aviation Week publication group who formerly worked for Delta Air Lines and Mesa Air.
Any incentive an airport offers with its own money has to be available to all of its carriers, according to Federal Aviation Administration rules. To entice a new airline, the money has to come from outside sources, be they taxpayers, the private sector or a mix of both. One option Wilson describes is the “travel bank,” whereby the community creates a pool of money from which an airline can draw to support a new service.
In a deal that stunned even some industry insiders, Southwest Airlines, which Wilson says largely shunned incentive packages in the past, accepted a $26 million guarantee from developer The St. Joe Company to provide service to Northwest Florida Beaches International Airport, which opened in late May near Panama City Beach, Fla.
Metro Airport officials aren’t expecting anything of that magnitude, Caldwell says, but aviation director Anthony Marino is actively seeking outside funds to provide a revenue guarantee. They did score a win this year with the limited incentives they had, including $200,000 in marketing support over two years, waived landing fees, rent abatement, and reduced fueling fees. In June, US Airways returned to Baton Rouge after a seven-year absence, joining legacy carriers Continental and Delta.
Airport officials were disappointed when a bill in this year’s legislative session, which would have allowed a $28 million airport-infrastructure fund from the Department of Transportation and Development to be used for air service development, never got off the ground. Ellis has created a competition and development task force of community leaders to study the issue; they may try to create a guarantee fund of “several million dollars” to lure in a low-cost carrier that could provide direct flights to Atlanta, New York and Washington, D.C.
“It has been a real hindrance on economic development in the Capital Region,” Ellis says, “and it’s not acceptable.”
FLYING OUT
The cost of a round-trip flight to Washington, D.C., Reagan National Airport on Tuesday, Sept. 21 and returning on Thursday, Sept. 23 [price as of July 12]:
Continental Airlines
Leaves Baton Rouge 11 a.m.
Arrives Washington, D.C. 4:43 p.m.
Layover: Houston
Leaves Washington, D.C. 1:45 p.m.
Arrives Baton Rouge 6:48 p.m.
Layover: Houston
Cost: $255.80
Leaves New Orleans 11 a.m.
Arrives Washington, D.C. 4:43 p.m.
Layover: Houston
Leaves Washington, D.C. 1:45 p.m.
Arrives New Orleans 6:01 p.m.
Layover: Houston
Cost: $437.80
Delta Air Lines
Leaves Baton Rouge 10:20 a.m.
Arrives Washington, D.C. 3:59 p.m.
Layover: Atlanta
Leaves Washington, D.C. 1 p.m.
Arrives Baton Rouge 5:49 p.m.
Layover: Atlanta
Cost: $409.80
Leaves New Orleans 10:10 a.m.
Arrives Washington, D.C. 3:59 p.m.
Layover: Atlanta
Leaves Washington, D.C. 1 p.m.
Arrives Baton Rouge 4:50 p.m.
Layover: Atlanta
Cost: $460.80
US Airways
Leaves Baton Rouge 10:50 a.m.
Arrives Washington, D.C. 4:12 p.m.
Layover: Charlotte, N.C.
Leaves Washington, D.C. 12:10 p.m.
Arrives Baton Rouge 5:52 p.m.
Layover: Charlotte, N.C.
Cost: $442.00
Leaves New Orleans 10:50 a.m.
Arrives Washington, D.C. 2:16 p.m.
Layover: Nonstop
Leaves Washington, D.C. 11:45 a.m.
Arrives Baton Rouge 1:27 p.m.
Layover: Nonstop
Cost: $448
SOURCE: Airline websites
