SARASOTA -- Sarasota-Bradenton International Airport's new budget coupled with a letter of support for an American Airlines-U.S. Airways merger are providing another signal that the airport is moving on from losing AirTran.
"Next year is a building year," said Frederick "Rick" Piccolo, president and chief executive officer of SRQ airport. "I think we turned the corner when we gained United."
Within the Sarasota-Manatee Airport Authority's $21.6 million fiscal 2014 budget approved 4-0 Monday is $253,725 in marketing/advertising funds, $700,000 in airline incentive funds, an unused $500,000 federal grant to attract new service and a $28 million war chest in the form of reserves to commit money as needed to the airport's facilities, real estate investments or new airline service.
"We have done a relatively good job of coming out of the abyss with what happened with AirTran," Piccolo said during Monday's meeting.
All the available incentives and marketing funds will help bring another
carrier here, but one important target for the airport appears to be out of its hands. The airport wants to offer service to Dallas-Fort Worth and Miami, but that's only possible with an American Airlines-U.S. Airways merger.
"It doesn't say you can't get American Airlines to serve here, but under the present way, they'd have to open a station of their own. That's a sizeable investment," Piccolo said. "If they're allowed to merge, American is here. There's no added fixed cost they would have to add to their facility."
The local airport authority voted 4-0 Monday to approve a letter to be sent to Florida Attorney General Pam Bondi from Piccolo stating that the airport supports the merger and hopes that Bondi reconsiders state opposition. Piccolo previously sent a letter to elected officials expressing his support for the merger.
That merger is in federal litigation and Bondi joined six other attorneys general in August to stop the merger, which if approved would make the world's largest air carrier.
"This merger would be anti-competitive and harmful to consumers, with 20 percent of the problematic flight routes affecting Florida. By filing this lawsuit, we hope to save consumers from potential multimillion-dollar increases in prices and fees," Bondi said in a statement released in August.
Authority board member Jack Rynerson said while the new service wouldn't be critical, it is a great benefit.
"Anything we can do to get new service would be a big plus," Rynerson said, adding that with U.S. Airways overseeing the new airline, a better operation would emerge.
It's conceivable that out of the merger, the airport would lose its daily non-stop to Reagan National Airport in Washington, Piccolo said, but it's worth it when picking up the two other offers. All of this is a strange twist in business as AirTran's merger with Southwest Airlines caused Sarasota to lose multiple flights when AirTran pulled out of Sarasota.
What could help lure a merged U.S. Air-American here is the airport's incentive package, which was updated Monday. Airlines will not pay landing fees for their first two years of operation, which were also increased at Monday's meeting to 89 cents per 1,000 pounds from 69 cents per 1,000 pounds. The package also includes marketing money to create awareness of the new service.
To qualify, airlines must offer year-round or new seasonal daily, round-trip, non-stop service starting between Oct. 1 and Sept. 30, 2015. Terminal rent, usage, apron, hold room and baggage claim fees are all reduced by 33 percent for domestic and 75 percent for international service under the package as well.
Even if one of the airlines accepts that incentive, it would be costly to American to add service
The incentive package has prompted United to add service to Boston and Chicago, JetBlue service to LaGuardia and Piccolo hopes that United adds service to Newark as well.
Airlines are also getting a better deal with its terminal rental rate, too. The airport's rental rate will increase 4.1 percent, as opposed to the 5.1 percent increase proposed in August, Piccolo said, thanks to additional budget and insurance savings, but that rate increase actually results in a $250,000 reduction in cost to the airlines because the formula for rental space was changed.
Overall, airlines will pay $937,000 less this year compared with last year, Piccolo said.
The airport has worked on partnerships to bolster use through an agreement with IMG Academy and a new tourism agreement in the works with the Athens, Greece, airport, as part of Piccolo's function as chairman of the Airports Council International World Governing Board.
While Florida is a popular destination, the endeavor for airlines is tricky, Rynerson said. Demand for discount tickets to Florida, means airlines see thin profits. An airline can make thousands of dollars more on a cross-country flight from another destination compared with a Florida flight, he said.
"You have to do them," Rynerson said, or else passengers won't fly with the carrier anymore.
Tertiary discount carrier Allegiant Airlines recently bulked up its offerings in Punta Gorda, Orlando and Clearwater, but those flights are not daily offerings, which Sarasota passengers would balk at, according to a consultant's study performed for the airport.
The September airport activity report, to be released in October, will truly show what life is like without AirTran, Piccolo said, as AirTran left the airport in August 2012. So far, airport officials are getting a glimpse of its ability to recover when a major carrier offering popular flights leaves.
When comparing August of both years, the airport is up 9 percent in passenger traffic, but is down 11 percent year-over-year. That stands as an improvement over the previous report, showing a 12.92 percent drop. Piccolo's goal is to have a single-digit percentage drop for the year.
November proves to be somewhat of a concern for the airport as officials await a report on the amount of seats scheduled.
When not accounting for AirTran's loss, each airline has seen an increase year-over-year at the airport.
JetBlue, which added LaGuardia this year, is up 30 percent while Delta is up about 12 percent.
"Hopefully next year we'll get back to the pre-Air Tran days," Piccolo said.