Monday, April 23, 2012

Search for new airline fruitless so far: Express Airport still seeking replacement for DirectAir service

Nearly seven months after receiving a $750,000 grant to try to lure a new airline to Toledo Express Airport, the Toledo-Lucas County Port Authority has no firm candidate to receive that federal support or the local matching funds and resources the agency lined up to complement it.

Paul Toth, the port authority president, told the agency’s airport committee last week that he believes Toledo remains a strong contender to attract Toledo-Denver service from Frontier Airlines, a discount airline whose system features a mix of traditional routes radiating from its Denver hub and direct flights between northern cities and a variety of vacation destinations.

During a meeting with Frontier representatives in February, Mr. Toth said, “We made our pitch as to why they should want to put their iron in Toledo.”

But he conceded that since then, jet fuel’s price has climbed once again, “putting a lot of pressure” on the airline industry.

In any case, the goal of a May start-up that port officials expressed when the Small Community Air Service grant was announced in late September almost surely will be unmet. Airlines typically place new routes or flights into their reservations systems months before service commences.

Mr. Toth said his next air-service development meeting will be with Allegiant Air, which he believes will pick up at least some of the slack left at Toledo Express when DirectAir, a scheduled-charter carrier flying between Toledo and Punta Gorda, Fla., abruptly suspended operations last month.

Allegiant also flies to Punta Gorda but had avoided routes there that competed directly with DirectAir before its shutdown, the port authority president said. DirectAir’s last few Toledo flights were 98.5 percent full, port authority statistics show.

The federal grant, if the port authority can find a taker, is to be matched by $250,000 from the Northwest Ohio Development Fund, to create a $1 million revenue guarantee for the first two years of a new route’s operation. The port authority pledged $250,000 for marketing support, “in-kind” contributions from the airport valued at $642,025, and $235,000 in advertising subsidies from “media partners,” including The Blade.

In 2006, the port authority obtained a $400,000 grant from the same federal program, but it returned the money four years later after failing to attract service.

Mike Boyd, an Evergreen, Colo.-based airline industry analyst and consultant who has worked on Toledo service development in the past, predicted the same outcome for the latest grant and said that in any case, bringing in an airline like Frontier is unlikely to seed an air-service revival at Toledo Express.

“I don’t think they’re going to get anything out of it,” Mr. Boyd said before cracking that “it’s time for air-service hospice” at Express.

Continuing to spend money on air-service studies and consultants “is almost irresponsible, because the writing’s on the wall, or in the sky,” the analyst said. Bringing an airline like Frontier in “is not going to change the fact that 95 percent of your people drive to Detroit.”

“You have good access via Detroit,” Mr. Boyd said. “The local airport is a lost cause. It’s air-service access that counts [for economic development], not local air service.”

But Mr. Toth argued that air passenger service is important to Toledo Express’ future.

“The bulk of our revenue, whether people want to realize it or not, is driven by passenger [service],” he told the airport committee.

The port authority has budgeted a $700,000 operating loss for Toledo Express this year. Mr. Toth said its bottom line has been helped by the mild winter, which reduced expenses for snow and removal, and by the port authority’s decision to set up its own company to operate food concessions and cancel a contract with V/Gladieux Enterprises.

Toledo’s only remaining traditional network airline service is flown by American Eagle Airlines, which operates four round trips most days between Toledo Express and Chicago’s O’Hare International Airport.

During March, travel on the American Eagle route was up 40 percent compared with the same month in 2011, thanks in part to the port-supported increase to four flights a day from three that American Eagle instituted in August.

But load factor — the percentage of seats sold — was down, to 65.3 percent from 70 percent, which Mr. Toth acknowledged was less than ideal.

“We’re 10 to 12 points below their systemwide load factor, which is not something you like to see,” the port authority president told the airport committee.

He surmised that American Eagle — which is owned by American Airlines, now in Chapter 11 bankruptcy — is “not pricing Toledo to fill their planes but to get the right [fare-paying] passenger.”

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