SRQ ups incentives to replace AirTran

MANATEE -- The Sarasota Manatee Airport Authority plans to aggressively seek a replacement for AirTran, which notified airport officials Friday it will cease all local service by summer.

The board Monday unanimously bolstered its incentive package for new carriers, while directing airport staff to begin marketing in countries such as Brazil and Russia, which have better sustained the global recession.

With a weekend to digest AirTran’s decision to discontinue all flights at SRQ by Aug. 12, authority members were upbeat and focused on the future Monday during their first meeting of 2012.

But the reality remains: The AirTran withdrawal will deliver a $1.2 million shortfall to the airport, stripping about 360,000 passengers from the terminal, or one-third of the airport’s total traffic.

“Welcome to the new normal in American business,” Airport Authority member Henry Rodriguez said. “I’m not surprised by this. We’re depending on Midwesterners and the golden oldies, which is great, but we need to diversify.”

Airport officials already have had discussions with JetBlue and Delta about expanding their presence here. A pitch was also made to Spirit and to bring back Continental, which discontinued flights at SRQ about three years ago.

To make the sell more enticing, authority members agreed to increase rent and landing fee abatement to $7 per passenger for airlines that add new market flights.

The board also approved a more robust marketing assistance program that hands new airlines up to $600,000 over their first two years at SRQ. The incentive program carries a $1.5 million cap, which will be funded through reserves.

Although AirTran’s decision to pull out of the airport will create an immediate setback, the impact will be eased by a lease agreement that runs through 2014, allowing the airport to continue collecting about $1 million in rent from AirTran through that time.

SRQ, which runs on a $22 million annual budget, will have its entire debt paid off by 2014. The AirTran withdrawal isn’t expected to stall immediate capital improvement plans, with the airport’s $11.2 million project to enhance curb side, the center canopy and baggage claim still slated to begin this year.

“I can’t come out tomorrow and announce we have an airline to fill that void, but they’ve shown interest,” Airport President and CEO Rick Piccolo said. “Right now they’re kicking the tires.”

Piccolo also said Monday he was surprised by the way the AirTran withdrawal transpired Friday.

Typically when an airline makes a decision this significant, a vice president will fly down to deliver the news in person. In this case, the decision came abruptly from a mid-level manager over the phone, Piccolo said.

“To have it done in such an unprofessional way was a disservice,” he said. “There was no previous implication that there were any negative issues ... I don’t understand their decision. I don’t think it’s a good decision.”

AirTran, which was acquired by Southwest in May 2011, will pull out of six airports across the country this year. Southwest will assume 53 of AirTran’s 69 serviced cities.

The airline cited SRQ’s seasonal swings, proximity to other metro markets, and the rising cost of fuel. Increased staffing expenses also played a role, the airline said.

Because the entire industry is downsizing, SRQ officials acknowledge that filling the void will be no easy task. The airport will be left with no direct flights to the majority of the Midwest, including Chicago, Indianapolis and Milwaukee.

“I never liked AirTran anyway,” Airport Authority Vice Chairman Gary Kompothecras said with a smile. “We’ll figure it out.”

Josh Salman, Herald business writer, can be reached at 941-745-7095.