“Now … if there are two markets that are forecasting out similar metrics, and one market has incentives and another market doesn’t, that’s when an airline could potentially lean towards the one that offers incentives.”
Echoing Audino’s point, Sieber says some incentives are riskier than others, and that’s where programs like the Small Community Air Service Development program have really been valuable.
For example, he adds, “One of the great success stories is with Sarasota Bradenton and AirTran.
“The airport received a SCASD grant, and with those funds on the table, they were able to get AirTran to get into that market. The grant is done now, and AirTran has continued to service Sarasota; not only that, it has actually built its presence at Sarasota without the use of additional funds.
“That’s a situation where Sarasota was able to utilize air service development funding/risk-abatement dollars to get AirTran to try the market from its main hub in Atlanta.
In terms of targeting service, Sieber says incentive programs need to be focused from two perspectives: airports need to identify where air service deficiencies are in the marketplace, and the type of traveler it is attracting to its community.
“Airports have to gather demographics, and identify communities of interest ... on a macro-level in terms of general industries, and then drilling it down to specific corporations.
“We know that the folks in the Midwest and Canadians prefer the Gulf Coast region; the Atlantic and Northeast folks have a propensity for travel to the Atlantic Coast of Florida; etc.
“There’s a lot of data out there; the challenge that we have as consultants is that sometimes people don’t properly read the data, or they may misinterpret the available Department of Transportation (DOT) data; or worse they may be using raw DOT data without really cleaning it up and filtering it.
“We try to bring an informed analysis as it relates to the data, and then layer on top of that a knowledge base of individual airline strategies that will fit the airport’s objectives.”
Sieber says every carrier is very focused on airport cost, so fee waivers are certainly an incentive that comes into play.
“But, once the fee waivers expire, if the costs are not palatable to the operator, the airline may pull out of the market,” relates Sieber.
“The low-cost carriers are very focused on airport costs; this is particularly true when you look at carriers such as Allegiant, AirTran, and Frontier, that have implemented service into specific markets with less than daily strategies.
“The old model was, hang a sign up behind the counter, install some computers, hire some people, and away you go. Now, if an airplane is only coming in once a day three days-per-week, you want a turnkey solution that will be cheap, reliable, and easy to manage.
“The overall goal is to have sort of a wide-stable of air carrier brands and hub choices, as well as the one-off non-stop market that might not necessarily be a hub for a carrier but yet can support that service. The issue is providing as many choices as possible at your airport so that your community’s travel needs are met.”
The incentives package also includes $5.3 million of city tax increment financing and $1.4 million of state infrastructure and employee-training grants.
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