Transformation in the Delta

Known as “The South’s Casino Capital,” Tunica lies in the plain between the Mississippi and Yazoo Rivers in northwestern Mississippi. A long-time agricultural community turned burgeoning gaming market, the area now boasts nine world-class casinos, some 6,300 hotel rooms, and a healthy sales tax revenue. Meanwhile, Tunica Municipal is completing a large capital improvement program that has extended the runway, added an airport-run fixed based operation, and is about to break ground on a new passenger terminal facility and commercial apron expansion. The airport is focused on complementing its strong charter presence with scheduled commercial service in an effort to diversify its capabilities and continue to support and enhance the region’s growth.

Located in the Mississippi Delta approximately 30 miles south of Memphis, the Tunica area has grown during the last decade and a half into America’s third largest gaming region behind Las Vegas and Atlantic City. With a population of some 1,300, Tunica draws more than ten million visitors each year. Tourism remains on the rise here and Tunica Municipal Airport is one of the many beneficiaries of the region’s growth, and it is fixed on supporting and enhancing that growth.

“We are an agricultural-based community that has really taken off in the tourism industry,” says Tunica Convention & Visitors Bureau president and CEO Webster Franklin.

“We are enjoying some very good success, and are finding that once our visitors come and experience us, they like it, and they come back.

“The growth of the airport, in its various stages during the past few years, and how fast it has developed, is a mirror image of Tunica.”

Franklin relates that when the gaming industry arrived in Tunica after the Mississippi legislature legalized gambling for the state in the early ‘90s, there was one 12-room hotel and no stretch of four-lane highway anywhere.

“Now we have an infrastructure that has been built to accommodate millions of people on an annual basis; the airport is continuing to grow, and I think it’s going to play an ever-increasing role in the overall development of this area,” says Franklin.

Charter Service Abounds
Hired in 2002 by the Tunica County Airport Commission, airport executive director Cliff Nash says 75-80 percent of the business is commercial charter aircraft activity. He relates that the charter program at Tunica started in 2005 after the airport extended its lone runway to 7,000 feet and received Part 139 certification to allow large jets.

The first large jet to land at Tunica was a 125-passenger 737 operated by Gold Transportation for casino and hotel mega-company Harrah’s Entertainment. “We live and die by the casinos,” says Nash. “Of the larger casino companies here, Harrah’s has really done the bulk of flying into the airport.”

In 2007, relates Nash, Harrah’s found that the charter program was proving to be a real success, and it doubled their efforts. The airport saw some 47,700 charter passengers that year. In 2008, thanks to the initiation of additional charter service by MGM under the Gold Strike casino properties, charter boarding rose to some 60,000 passengers.

“Starting in January of ‘08, Harrah’s initiated a contract with Allegiant Airlines to base two MD80s, capable of seating up to 172 passengers, at the airport along with a station manager and staff,” says Nash.

ExpressJet, a regional charter airline, has also been flying into the airport with six to eight flights per month, also for Harrah’s, says Nash. Overall charter activity for the airport currently averages some 102 destinations in 26 states.

“We average about 45-55 flights per month; up from a total of 200 in all of 2006,” says Nash. “We are hoping to have some 70-75,000 commercial boardings this year; we are currently 17 percent ahead in terms of total passengers year over year.

“A lot of that activity can be attributed to Harrah’s charter program; the company owns 30-40 properties nationwide and their charter program here handles charters from North Carolina, Illinois, Mississippi, as well as the coasts; so it’s not just the Tunica properties.

“Harrah’s air staff is run out of this airport as well, and the company continues to see the value of bringing individuals into the airport.”

The airport is strategically located near the geographic center of Harrah’s properties, says Nash, making it an attractive transportation resource for the gaming company.

Capital Development
According to Nash, airport fuel sales, ground services, and rents generated an annual revenue of some $894,000 in 2008. Airport expenses totaled some $1.7 million, of which $130,820 was for matching funds for $5.23 million in federal grants received during that year.

Last year, the airport completed a $6.2 million runway and taxiway extension — this year, Tunica will break ground on a new three-bay $1.7 million aircraft rescue and firefighting facility, a commercial passenger terminal, and a 240-foot, $1.3 million commercial apron expansion.

The new terminal will be roughly 40,000 square feet; and the apron expansion will allow the airport to have up to five narrow-body aircraft at the terminal simultaneously, says Nash.

Regarding the terminal funding, “We have been working with our congressional staff and the FAA,” says Nash. “Because we don’t have scheduled service and even though we enplaned some 60,000 passengers last year, we are still not considered a primary airport.”

There was hope that the airport could get some stimulus funding; unfortunately the airport was not eligible for any stimulus funds to help with the terminal construction, says Nash. The county is now going through a bond process to fund that construction. Bids for the terminal, minus the jet bridge and baggage system installation, are coming in at some $8.2 million, relates Nash. Facility construction is expected to be completed in 2010.

The airport development is aimed at luring a commercial air carrier in order to diversify the airport’s services from predominant charter activity to a combination of scheduled air service and connections through hub airports to further support the region’s gaming market, explains Nash.

In the meantime, he says the new terminal will segregate the airport’s general aviation and charter operations, providing customers with better facilities and enhanced customer service.

Tunica did enjoy a short period of scheduled air service in 2006 when Pan Am Clipper operated three flights per week from Tunica to Atlanta-Hartsfield. That contract ended in October of that year when the airline lost its routes from Atlanta.

“We are a destination gaming market; in order for us to grow outside the regional area, it’s going to take the development of the airport,” explains Tunica visitors bureau president Franklin.

“That will go a long way to helping us diversify our economy from one of agriculture and tourism to another possible area such as manufacturing.

“Our next step is the terminal and the overall development of that to try to attract scheduled air service into the market.”

Much of the region’s economic development is a result of gaming sales tax revenue. In Mississippi, the gaming industry pays a 12 percent tax on gross gaming revenue — 8 percent of which goes to the state — and 4 percent of which comes back to the local community.

“When I say local community, I mean the county board of supervisors, which is the governing authority of the county,” says Franklin. “The airport commission is an arm of the county that is funded by a general fund revenue.

“The airport is a line item within the Tunica County overall budget; the majority of those funds come from that 4 percent gaming tax.”

Tunica is a $1.1 billion per year gaming market; the airport is having a dramatic affect based on the number of planes that utilize it, and the amount of revenue that those planes are bringing into the market, says Franklin. “It just shows that the investment that has been made in the airport is coming back to Tunica County and the state of Mississippi in the form of that gaming tax revenue.”

The Tunica Convention & Visitors Bureau is in full support of the airport’s development, relates Franklin, and has put up marketing dollars in the past to attract scheduled air service.

TUnica Air Center
The airport opened in September of 2003 with a 5,500-foot runway and taxiway, and an airport-owned and operated FBO, Tunica Air Center. The FBO does not provide aircraft rental, flight training, or maintenance. The maintenance center on the field, Tunica Air Group, leases the airport’s only hangar and provides much of the aircraft maintenance for the casino charter programs.

There really isn’t a demand for flight training or aircraft rental, says Nash, yet part of the goal with the airport and its relationship with the gaming industry is to bring in charter flights as well as entities like Tunica Air Group, “that come in and form a company that will attract other business, which helps us diversify rather than being dependant on just the gaming industry,” relates Nash.

Fueling is Tunica Air Center’s biggest profit center. Says Nash, “As an old airport director at a small airport down the road that had a third-party FBO, I was constantly trying to convince the city and the commission that we should own and operate an FBO for the fuel sales. It’s a tremendous revenue generator; and also a tremendous marketing arm.

“A lot of airports that are thriving may not want to deal with the risk associated with fueling; at the airports I’m familiar with, it makes a lot more sense to provide the fuel yourself and control the costs so that you don’t price it out of the market. The result is an increase in revenue of nearly seven- or eight-fold. In Tunica’s case, it made absolutely good sense for the airport to provide the fueling.

“When I was hired, that was one of the fundamental questions that the commission asked in the interview process. I recommended that the airport should initially be the FBO; then at some point if it grows and can support third-party activity, then it can be sold off.”

The airport provides all ground handling services, charter companies included. This means check-in, baggage handling, aircraft servicing, customer ground transportation coordination, etc. Last year, the airport pumped some three million gallons of fuel, says Nash. The bulk of those sales were into-plane for charter aircraft, and not retail.

NBAA’s 62nd Annual: Tunica Exhibits

Says Tunica Convention & Visitors Bureau president and CEO Webster Franklin, “NBAA is a good way for the Tunica Airport to gain exposure within the airport community. Our goal there is to take an area that had a rural agricultural strip as early as 2000, and in today’s terms, let people know that we are positioned for growth, whether it be on the airfield, with corporate aviation, or with scheduled service.
“One of the things that is not talked about so much is the vast amount of land around the airport that is developable. We think that is something that we will take advantage of in the future; and businesses can take advantage of as well.
“So we exhibit at the annual convention to get exposure and to let people know who we are, and to let them know what the story of Tunica is.
“We are located in the Mississippi Delta; it’s an agricultural area and it’s very flat. There’s land around it as far as the eye can see; and while not all of that is controlled by the airport commission or Tunica County, a large majority of it is. We can grow as much as we need to and are not inhibited by things around us to do so.”