Hooters Air Owes Lehigh Valley Airport $1 Million

The Myrtle Beach, S.C. airline has been struggling with fuel costs since the fall.

Lehigh Valley International Airport, which has lost two small carriers in the past 18 months, now has reason for concern about another airline.

Hooters Air owes more than $1 million for fuel sales to LVIA; by comparison, the airport brought in $21.7 million in revenue last year. The Myrtle Beach, S.C. airline has been struggling with fuel costs since the fall, airport officials said. It began flying at LVIA last year.

It's the second time in a little more than a year that LVIA has faced a debt of $1 million, both times involving a small, low-fare carrier. At the end of 2004, Southeast Airlines abruptly ceased flying, cancelling popular nonstop flights to Florida and leaving LVIA with $1 million in debt, which the airport never recovered.

The airport's struggle with low-cost carriers has unfolded while the airline industry has faced soaring fuel costs. Southeast, for example, cited fuel costs as a chief factor in its demise.

LVIA has welcomed the smaller, low-cost carriers, which often shoulder much of the local leisure flight market, with fanfare, and marketing. A year ago, TransMeridian Airlines of Atlanta began flying to Orlando from here, taking on some of the flights left by Southeast. It ceased flying in September.

LVIA had high hopes for Hooters when it began flying here in May. In the space of two months last year, Hooters announced it would begin flights from LVIA to Fort Lauderdale and St. Petersburg, both in Florida; Gary, Ind., near Chicago, and Myrtle Beach, S.C.

The airline has so far not delivered as LVIA had hoped. When fuel prices spiked in September following Hurricane Katrina, Hooters began cancelling some local flights that were not full, said George Doughty, the airport's top official. It is not now flying to Orlando or Myrtle Beach from here. Hooters was buying fuel from LVIA but when it stopped making payments for fuel in January, airport officials told the airline to look for a new supplier.

Hooters flew 3,345 passengers in January. By contrast, the airline flew more than 11,000 passengers to and from LVIA in July. Part of the drop in January was seasonal; Hooters has suspended certain winter season flights in the past at other airports.

Doughty said Hooters' Air flights typically depart on time and are popular. But he fears the habit of cancelling flights is alienating customers.

"That's my most serious concern," said Doughty, executive director of Lehigh-Northampton Airport Authority, which operates LVIA, in a telephone interview. "That is really being your own worst enemy."

Hooters Air President Mark Peterson said the airline has at times combined flights to Florida, and all airlines make scheduling changes. The important thing, he said, is the airline is still serving the Allentown market, and a plan to repay the debt is in place. He said the high fuel prices of the last six months have posed significant challenges not only for his company, but for every airline in the industry.

"Anyone can fill up the airplanes," Peterson said in a telephone interview Wednesday. "Making money doing it, that's the real challenge."

Doughty said there is at least a possibility that LVIA could lose Hooters as an airline. But he said that's also a possibility with other airlines that serve LVIA. Delta and Northwest Airlines, for example, are in Chapter 11 bankruptcy proceedings. Peterson would not say unequivocally that Hooters Air will be operating in six months or a year, but he said many airlines would be hard-pressed to make such a statement.

Hooters Air, which is an offshoot of the popular restaurant chain, has cut back on service at other airports. In December, Hooters suspended some flights from airports in Gary, Ind. and Columbus, Ohio, saying they would resume this month.

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