SRQ officials worry about another potential merger

MANATEE -- Airport officials are keeping a close eye on another potential merger by one of their airlines to ensure it doesn’t mirror what unfolded with AirTran.

U.S. Airways Group, one of three remaining carriers at Sarasota-Bradenton International Airport, is vetting a potential merger with troubled American Airlines, whose parent company is navigating Chapter 11 bankruptcy.

Because American Airlines has a strong presence in the Midwest, the carrier ultimately could join U.S. Airways at SRQ to fill the void created when AirTran pulled out.

But that’s just what airport officials had in mind when Southwest acquired AirTran in a similar merger last year. Instead, the carrier notified SRQ on Friday that it will discontinue all local service by August.

Airport CEO Rick Piccolo said SRQ can’t afford the same to happen with U.S. Airways.

“We have not been a big winner in mergers,” Piccolo said. “Because we don’t have American Airlines now it could create an opportunity, but that’s exactly what I thought with Southwest.”

AirTran told Piccolo on Friday that it would be pulling out of SRQ by Aug. 12 to concentrate on existing Southwest service in Tampa and Fort Myers. The decision strips the airport of nearly one-third of its total passenger load, creating an estimated $1.2 million yearly hole.

The merger, which triggered the entire sequence of events, has become a common theme in the industry of late.

Take the last three years alone: Delta bought Northwest Airlines in 2008, United merged with Continental in 2010, and Southwest acquired AirTran last year.

Two decades ago, more than 25 full-service domestic carriers were operating in the U.S. Three recessions, rising fuel prices, and volatile travel habits have shrunk that number down to just seven, Piccolo said.

The industry downsizing has taken its toll on airports in smaller to mid-sized markets across the country. SRQ was the latest to feel the pain, joining as many as 15 other airports where AirTran will stop service this year, experts predict.

“It’s been a problem at a lot of airports,” Piccolo said. “Nobody’s closing, but we’ve seen things really shrink.”

Since the grim news Friday, Piccolo has had conversations with a number of potential replacements and existing airlines, including U.S. Airways, which now represents about 15 percent of the airport’s total passengers. The American Airlines merger never came up in those discussions, he said.

Because Southwest is the largest carrier in Tampa, its situation here is a little different than that of U.S. Airways and American.

Once Southwest purchased AirTran, the company realized it just couldn’t continue most of AirTran’s flights profitably, said Michael Boyd, an aviation consultant.

With 1.3 million passengers walking through the SRQ terminal last year, local demand still remains -- also making it more unlikely others will follow suit in AirTran’s withdrawal.

“This merger is still 18 months down the road if anything; nothing is imminent at all,” Boyd said. “Even if it were to happen, I don’t think you’re looking at any downgraded service at SRQ.”

For now, the airport authority bolstered its incentives to lure a new suitor. County officials also may explore the idea of offering a financial package, like the one used to first draw AirTran several years ago.

“It’s worth looking into and something we will probably have to discuss,” Manatee County Commissioner Larry Bustle said.

“I just can’t predict whether something like that will happen given our budget, and the other priorities we have.”

While the industry shrinking has posed a setback for SRQ, and many others across the country, small airports that found a niche have excelled.

Passenger traffic last fiscal year at the Charlotte County Airport in Punta Gorda has surged 60 percent over 2010, which was better than the year before.

During that same time, passenger trends at SRQ have held relatively flat, records show.

Unlike SRQ, whose daily service is in direct competition with Tampa, Charlotte County focuses solely on twice a week flights -- leaving the bigger players to Fort Myers.

“Sarasota is in the shadow of Tampa, and that’s extremely challenging,” Airport Director Gary Quill said. “When you have a large hub nearby, you just can’t compete with that.”

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

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