Along Came Baton Rouge

BATON ROUGE — The citizens of this genteel community in the center of the Louisiana oil patch had their future turned upside down by a hurricane. It became Baton Refuge — to relief efforts, to refugees, to those passing through. In a time of regional desperation, along came the community of Baton Rouge, the place some 80 miles north of New Orleans where many came for help, and stayed. Estimates say that as many as 100,000 newcomers never left. Just as the community tried to absorb them then, it continues to integrate a population base that dropped in overnight. Central to that, of course, has been the airport. As with the city, there are two histories of Baton Rouge Metropolitan Airport — pre-Katrina and post-Katrina. Already in the midst of a reconstruction program when the hurricane hit, the airport has responded aggressively to meet the needs of its growing customer base. Its priorities: focus on customer service and on keeping charges to the airlines low. Oh, and being prepared for another disaster.

Comments airport director Anthony J. Marino, “One of the most notable issues with us is the increase in the enplanements at the airport. After Katrina, we were doing a 106 percent increase. We knew that wasn’t a real number.

“Apartments in Baton Rouge, the condominiums, hotel rooms, houses for sale — all of them were taken. The inventory was depleted. But it didn’t give us any indication of where our traffic was going to level out.

“So we hired one of our consultants, who interviewed 46,000 passengers over a two-week period. We wanted a good review of what is happening to people who are coming through this building.”

Specifically, the airport wanted to know:

  • Have you relocated to Baton Rouge?
  • Has your company moved here?
  • Are you going to continue to fly out of this airport, or is it just a temporary thing?

Comments Marino, “When the information was tabulated, we were going to do about a 35 percent increase in traffic when it leveled out. In fact, right now we’re at a 45.4 percent increase; so, we’re above the number that our own study gave us.

“When you have a 50 percent increase in enplanements, you’re going to have some infrastructure problems that you’ll have to deal with,’ he adds, intended as an understatement.

The airport moved some 1.06 million passengers in 2006.

Growth, airport wide
It’s not only passengers having an impact. Business aviation is up, and cargo is through the roof. Prior to Katrina, the airport was aggressively trying to lure freight and mail, with little success.

Recalls Marino, “FedEx, DHL, Airborne — they all came to the airport and we provided them with temporary facilities. FedEx stayed, and is now flying two Airbus’s and a 727 a day into Baton Rouge. They’re still in New Orleans doing the same business they did there.

“We’d been trying to tell them there’s a market in Baton Rouge; this is a petrochemical market. There’s $600 billion worth of plants on the [Mississippi] river in Baton Rouge. Exxon’s second largest refinery is in Baton Rouge.

“We were doing 800,000 pounds of freight and mail pre-Katrina. Post-Katrina, last year we did 52 million pounds of freight and mail. This year we’re going to go to 55 million pounds.”

Marino says freight has settled down, and FedEx has made a five-year commitment. But the carrier wants more space, and the airport is preparing to issue a request for qualifications to design a second cargo facility.

Total on-airport employment has grown since 2005 from 1,550 employees to 2,600 currently.

Says Marino, “The good news is, freight, cargo, landing weights are all up; enplanements are up — but then there’s infrastructure, and you better meet the needs.”

Therein lies the focus of the Baton Rouge airport staff today — to them, it’s more like the revitalization program that keeps on wanting. The impression one gets on a visit here is, with that comes a sense of activity, of accomplishment, of loyalty to a director and a community, particularly the newcomers.
Always part of the Baton Rouge economic engine, the airport’s role has been magnified. It just so happens that by mid-2005 when Katrina made her visit, the airport had mentally positioned itself for energizing the community and capturing new opportunities. Timing or fate? It isn’t lagniappe, but it’s close.

Step one: a ‘cash cow’
The airport is overseen by a 13-member commission, four of which are state-elected officials along with the local mayor. The city council sits as airport authority and sponsor. “We keep officials focused on the airport,” says Marino. “It’s like [dealing with] Congress sometimes.”

By the mid-1990s, when Marino became director, the city was anxious to see the terminal enlarged and enhanced. Operating as an Enterprise Fund, the airport could expect no financial support. And, says Marino, the airlines had no interest in financing terminal reconstruction.

Since that time, Marino and his team have directed some $297 million worth of improvements, and another $100 million is in the works. It happened one step at a time.

Recalls Marino, “In the latter part of 1996 we started rolling. We knew we had to find a cash cow, and that was the first parking garage. We had to find a way of securing some money — not having debt on the garage, it would be the cash cow to support other revenue bonds.

“We ended up with 13 funding sources to pay for this terminal building. If you’re going to do $297 million in about nine years, 80-something projects, you’d better come up with some creative ways of doing it.”

The airport also instituted a $4.50 passenger facility charge for the terminal project as well as a $3.25/day customer facility charge to build a new rental car facility adjacent to the terminal.

Marino points out that $184 million of the projects were in process pre-Katrina. “It wasn’t done for Katrina,” he says. “We had all this wonderful new capacity — in one day, it’s gone.”

The airport is also seeking other sources of revenue, evidenced by a recent agreement to lease 112 acres to Coca Cola for a distribution plant. And, it continues to seek opportunities in the MRO (maintenance/repair/overhaul) market. It currently hosts a Delta regional jet maintenance facility, which is growing, and is working to put in an on-airport A&P technician school to feed that labor segment.

In January, the airport announced another $100 million for construction, much of it focused on airfield upgrades. BTR officials have submitted a letter of intent application with FAA for $40 million.

Comments Ralph Hennessy, assistant director, “We had completed a master plan in 2004. Traffic forecasts were mainly for an RJ fleet. As a result of the hurricane, we started getting a lot more mainline aircraft. FedEx started coming in with their Airbus’s. We had military aircraft coming in — C-17s, C-5s. All that weight accelerated what had been projected as a need in five years to two years.” Projects include reconstruction of the primary runway, four taxiways, an ILS, and more airfield accommodation for business aviation that has relocated from New Orleans.

Making it attractive to airlines
Baton Rouge Metropolitan recently welcomed its first low-fare carrier, Frontier, which is flying direct to Denver International. The airport put together a $1 million incentive package, much of it centered on rent concessions and marketing. BTR’s annual marketing budget is $500,000.

To quell concerns in the community about subsidizing a new entrant, the airport contracted with Louisiana State University, based here, to uncover the economic impact of adding the low-fare airline.

Says Marino, “Their investment to come to Baton Rouge — equipment, allocation of resources — is $9.8 million. They make a substantial investment to the community. The community has to step up.

“We haven’t stopped with low-fare; now we have to look to the east.”

Marino emphasizes the need to keep costs reasonable to the carriers while maintaining a level of service. Thus, the airport controls all gates and provides all furnishings, ticket counters, and flight displays.

The airport has backed off from entering long-term agreements with the airlines, which it had been negotiating in 2005, due to the rapidly changing environment. It has capped the terminal building lease rate at $75/square foot, but adjusts its other fees based on an ongoing analysis of rates and charges at comparable U.S. airports, according to officials.

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