By Martin Sinderman
Contributing Writer

Traffic is up during the past year and capital improvements are proceeding at the Charleston International Airport, while the airlines leasing space continue to work their way through increasingly difficult market conditions.

The number of enplaned passengers at Charleston International totaled 641,274 through the first seven months of 2005, according to a July operations report issued by the Charleston County Aviation Authority. The number represents a 27.9% increase over the same period in 2004.

This percentage increase bests those of other nearby coastal-area airports. During the January-July 2005 time frame, some 626,574 passengers boarded planes at Savannah/Hilton Head International Airport, a 15.1% increase over the same period last year. Meanwhile, Myrtle Beach International Airport’s 388,461 enplanements for the first six months of 2005 surpassed the same period in 2004 by only 2.5%.

At Charleston International, construction of the $22.5 million, 1,200-car parking garage continues, according to David Jennings, chairman of the Charleston County Aviation Authority.

“I am hopeful—but not confident—that we will get it opened before the holiday season,” he said.

Meanwhile, construction is nearing completion on the airport’s new rental car facility.

And following a recently completed round of bidding, Cendant Car Rental Group, a unit of New York-based travel and residential real estate services giant Cendant Corp., will occupy the No. 1 position in the new facility with its Avis and Budget brands, Jennings said.

Hertz Corp. will take the No. 2 slot, followed by National Car Rental, Enterprise Rent-A-Car, Thrifty Car Rental and Dollar Rent A Car.

Given that no Gulf Coast markets are directly served by flights from CHS, the impact of the devastation wrought by Hurricane Katrina should have little direct impact on the local airport, Jennings noted.

“Indirectly, though, the storm’s impact on the availability and pricing of fuel could affect the carriers, some of whom are in pretty desperate financial shape right now,” he said.

Katrina has had an immediate impact on the already beleaguered airline industry.

The Air Transport Association, the industry’s trade lobby, said “Following Hurricane Katrina, jet fuel prices have soared to $99 per barrel (as of Sept. 1), jumping 47 cents per gallon (25%) from $1.89 per gallon a week before the hurricane, to $2.36 on Sept. 1. In that same time span, the jet fuel crack spread (the difference between the price of crude oil and jet fuel) more than doubled to just under $30 a barrel from $13.80, driving an extra $25 million a day in industry fuel costs.”

This fuel crunch could be especially rough for carriers such as low-fare Independence Air, whose corporate parent FLYi Inc. reported a net loss of $98.5 million during second quarter 2005, compared with a second quarter 2004 loss of $27.1 million.

An existing carrier going dark or entering bankruptcy proceedings would have little effect on airport operations, though, Jennings said.

“None of the airlines have long-term leases here. Our arrangements with all of them are month-to-month, which we think works to our advantage and to theirs,” he said.

But at the same time, fuel costs are apparently having a significant impact on efforts to recruit additional lower-far airlines to Charleston.

Keeping Charleston International’s existing low-cost air service and trying to attract others remains a high priority among members of the Charleston Metro Chamber of Commerce, said Mary Graham, vice president of Public Policy.

“But quite frankly, right now, we are not actively doing anything,” Graham said, “because until there is some change in fuel prices, the airline industry just isn’t looking at any kind of expansion plans.”

Independence Air considers Charleston to be one of its stronger markets, according to Graham, “and over the short term, our focus is on working with them to ensure that they do well here.”

Long term, though, “we still want to get some kind of carrier to help us with connections to Atlanta,” she said.

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