By Ashley Fletcher Frampton
aframpton@scbiznews.com
Published Nov. 2, 2009
Charleston International Airport officials have approved a new incentive package worth $150,000 to attract new airlines.
The new incentives were approved at the Charleston County Aviation Authority’s meeting in October, a few weeks after low-cost carrier AirTran Airways announced it will end local service Dec. 3.
Authority chairman David Jennings said the new incentive package isn’t a direct result of that announcement, “but more an acknowledgement of the current state of the industry.”
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The incentives reflect the 21st Century airline model, in which Jennings said airlines — particularly low-cost airlines — are looking for the community to share the risk of new service.
“This is a beginning effort on our part to acknowledge what portion of the risk the airport can share,” he said.
While the airport is offering up money to new carriers, in a separate move it is now collecting new $4.50 fees from passengers to pay for upgrades to the 25-year-old terminal.
Incentive details
The aviation authority approved a four-part incentive package that would cover an airline’s landing fees and rent for up to 12 months, help upfit the airport for the new airline’s operations and contribute $10,000 to the airline’s marketing efforts.
The airport’s maximum contribution for those costs is $150,000, though actual costs might exceed that amount, Jennings said.
Because Jennings and airports director Sue Stevens talk regularly with airlines, he said, “We both thought it was a good idea to have authority approval for what we could offer airlines to provide service.”
Before AirTran finalized its decision to leave Charleston, local officials said the airline asked them for subsidies that would allow it to stay. Officials said AirTran wanted $500,000 to stay through January and $2 million to stay another year.
Local government and business officials have said they decided against that deal because they didn’t have the money to spare right now and because it might set an unwanted precedent for other carriers.
Jennings said he would be surprised if the airport doesn’t land another low-cost carrier soon, but he couldn’t comment on specific talks with carriers.
He said the airport’s marketing efforts to other airlines include representatives from the Charleston Area Convention & Visitors Bureau, the Charleston Metro Chamber of Commerce and the Charleston Regional Development Alliance.
The offer of $10,000 toward marketing is an incentive the airport already offered. It applies for new carriers as well as existing carriers that add a flight.
New passenger fee
Also at its October meeting, the Charleston County Aviation Authority approved a $4.50 charge for facility improvements. The fee took effect Sunday.
“The terminal this coming March will be 25 years old,” Jennings said. “I think some of us who were around then still talk about it as the new terminal. But at 25 years old, it’s not new. It’s time to look at what we need for the next 25 years.”
Airport officials are negotiating a contract with a consultant to study the terminal and determine whether improvements are needed. Jennings said it’s likely that the consultant’s study will call for new baggage carousels and possibly new gates, among other changes.
Construction probably would not start for at least a year to 18 months, Jennings said.
The fee might not increase passengers’ fares, because many other airports already charge it. Jennings said passengers can be charged up to two airport passenger facility charges per flight — so, for example, if someone flies from Charleston to Atlanta and on to San Francisco, that passenger is likely already paying fees to the other two airports.
He said the first two airports in a flight itinerary are entitled to the fee, so Charleston can now claim the fee for the first leg of the example trip.
Jennings said Charleston did not previously charge the fee because it must be tied to facilities projects.
The airport does not use local tax dollars for operations or capital needs, he said. The new charge, which amounts to a user fee, is expected to generate between $4 million and $5 million per year.
“We think the people who use the airport ought to pay for it,” Jennings said.
Reach Ashley Fletcher Frampton at 843-849-3129.
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