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Want Air Service?: Cough Up the Cash
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Business New Haven
9/16/2002
By: BNH
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If the city of New Haven, the chamber of commerce and the business community are truly committed to attracting air service to Tweed-New Haven Airport (as opposed to being committed simply to talking about it for another ten years), there is a way to accomplish it: Guarantee a carrier's revenues.
That's what Wichita, Kan. did earlier this year - and it worked. With some of the nation's highest airfares due to lack of competition from low-fare carriers, Wichita was a sellers' market for giants such as Delta Air Lines and AMR Corp.'s American Airlines.
Exasperated area civic and business leaders approached low-cost carrier AirTran, whose arrival in a market has typically driven down fares by 50 percent or more. AirTran offered Wichita a cheaper alternative - with strings attached to starting service: big financial commitments from local government and area businesses.
So last year, some 400 Wichita area businesses agreed to shell out a total of $4.7 million for AirTran tickets to woo the Orlando, Fla.-based carrier. City government agreed to add up to $4.5 million in revenue guarantees over two years. As well, local officials chipped in $600,000 to market and promote the new service.
Such public-private “partnerships” have been a key element in AirTran CEO Joe Leonard's growth strategy since he took the reins of the carrier three years ago. According to a July 13 Wall Street Journal article, the “public” part taps municipal coffers for revenue guarantees that protect the carrier against losses during the initial phase of operations. The “private” part builds “travel banks” in which businesses pledge to spend a certain amount on airfares.
Since AirTran commenced service to Wichita in May, the cost of a full fare to Washington, D.C., for example, has dropped to about $460 from $1,667 late last year, according to the Journal.
Throughout the 1990s and into the new century, New Haven political officials and civic-booster types have sung the need for augmented service from Tweed long and loud. The business community demands it, they say (although in more than nine years of publishing Business New Haven we have received exactly one - one - letter from an actual business executive arguing that an enhanced Tweed was essential to his success).
Do we really “need” a bigger, better Tweed - notwithstanding the thorny issue of lengthening the runway? That remains debatable. Surely there are plenty of area businesses and institutions (Yale University comes first to mind) that generate a large number of air passenger miles each year.
If more service from Tweed is truly essential to them - well, now is the time for them to step up to the plate and put their money where their mouth is.
In their arguments to the supply side, Tweed boosters have long touted southern Connecticut's affluent demographics and the market's enormous “leakage” to other airports - Bradley, T.F. Green in Rhode Island and, obviously, New York. After a decade, it seems pretty safe to conclude that those arguments have fallen on deaf ears.
Rather than pretend that New Haven is a market that carriers simply forgot about or overlooked, those who want more Tweed flights must confront the reality that the competition from marginal markets such as Wichita or Burlington, Vt. is keen and even cutthroat, and that to make it onto a carrier's short list is going to require a tangible and substantial financial commitment.
And not just from the “usual suspects” such as Yale or Bayer. In Wichita, the Journal reported, volunteers working from a local call center telephoned 16,000 local businesses and a direct-mail campaign hit 40,000 companies to drum up support for the drive. Even relatively modest businesses such as local construction companies were induced to guarantee, say, $20,000 in annual airfares to AirTran.
That's what it took in Wichita - and it worked. If greater New Haven is unwilling or unable to galvanize a similar effort, then maybe we should all just shut up about Tweed Airport and move on to the next agenda item.
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