Owensboro Airport Affected by Hurricanes and Texas Airport Squabble

Oct. 12--A squabble between two Texas airports could hurt air transportation in Owensboro, a new national study says.

And the after-effects of hurricanes Katrina and Rita are driving costs of the federal subsidy that keeps air service in Owensboro to the breaking point.

"It kills me how we're affected by things out of our control," Airport Manager Tim Bradshaw said Tuesday. "We're finally seeing some success with our passenger loads."

In July, the U.S. Department of Transportation warned that Owensboro could lose its federal subsidy -- and its air service -- if it didn't attract more passengers.

The number of people using the airport had dropped for 16 consecutive months -- and was down in all but three of the past 33 months dating back to May 2002 -- before starting to climb in March.

RegionsAir, the commuter airline linking Owensboro and St. Louis, responded with $99 round-trip flights to St. Louis.

And the airport began offering 10 percent cash rebates on all flights out of the airport between Sept. 1 and Nov. 30.

"Our passenger loads for the third quarter are up 50 percent," Bradshaw said.

The airport reported 905 passengers in the third quarter -- up from 605 one year earlier.

September saw 338 passengers boarding flights to St. Louis and beyond. That's up 66 percent from the 203 reported a year earlier.

And it was the most passengers the airport has seen in one month since December 2003.

But the hurricanes that damaged Gulf Coast oil refineries in August and September have sent the price of gasoline -- and jet fuel -- through the roof.

News reports Tuesday said jet fuel prices are up 60 percent over the same week last year.

Bradshaw said RegionsAir is concerned that skyrocketing fuel costs could drive its costs -- and the federal subsidy -- beyond the $200 per passenger ceiling.

If that happens, Owensboro could lose air service.

On July 1, Karan K. Bhatia, U.S. assistant secretary of transportation for aviation and international affairs, warned in a letter to the airport board that subsidy costs were exceeding the $200 limit.

Between April 1, 2004, and March 31, 2005, he wrote, the airport handled 5,498 passengers and Regions received a subsidy of $1.13 million.

That comes to $205.07 per passenger.

But Bradshaw responded that the full subsidy was not paid because of canceled flights.

The actual subsidy, he said, was $999,634.

That comes to $184.45 per passenger, Bradshaw said.

But the airport began finding innovative ways to boost traffic. And Bradshaw noted that rising gas prices made driving to Nashville or Louisville for cheaper air fares less appealing to a lot of people.

It's not just fuel prices the airport has to worry about it as it struggles to rebuild passenger loads.

There's also a battle between Dallas/Ft. Worth International Airport and Dallas' Love Field.

The squabble dates back to 1971 when Southwest Airlines was founded at Love Field.

In the late '60s, Dallas and Fort Worth had agreed to close their airports in favor of a new, larger field between the two cities.

But Southwest went to court to keep Love Field open for its operations. When DFW opened in 1974, Southwest, which then operated only inside Texas, was the only airline remaining at Love.

When the airline industry was deregulated in 1978, Southwest moved from a Texas carrier to the national market.

Congress was pushing for larger -- and fewer -- airports in major cities. And DFW didn't want the competition from a rejuvenated Love Field.

So, in 1980, Rep. Jim Wright, a Fort Worth congressman, helped pass a federal law that limited service from Love Field to cities in Texas and the four adjacent states -- Louisiana, Arkansas, Oklahoma, and New Mexico.

It also limited planes serving the airport to 56 passengers.

That law, though modified somewhat, is still on the books.

But there is talk this year about repealing it.

And American Airlines commissioned a study by Eclat Consulting of Reston, Va., a company that specializes in the economics of commercial aviation.

In the study, released this week, Eclat says repealing the Wright Amendment would "trigger a chain reaction leading to significant losses in the number of flights and destinations served at DFW."

And it adds, "The loss includes both international routes and service to dozens of small- to medium-sized cities throughout Texas and the United States."

The study says that "smaller communities would bear the brunt of the changes, losing vital access to the nation's air transportation system that they enjoy today via DFW, as American Airlines is forced to move flights to Love Field."

"American and the other airlines currently operating out of DFW would be forced to move a large number of flights from DFW Airport to Love Field to compete with Southwest Airlines if the amendment is repealed," William S. Swelbar, president and managing partner of Eclat Consulting, said in a news release.

"If that happens, 'hub degradation' would take place, making marginal routes unprofitable," he said. "Inevitably, those unprofitable routes would be eliminated."

And that's where Owensboro comes in.

The study says that "small cities that rely solely on federally-subsidized Essential Air Service provided by the AmericanConnection carriers will see the effectiveness of their only air service degraded as they lose the ability to connect to important domestic and international destinations."

The cities listed are primarily those served by RegionsAir and the St. Louis hub -- Burlington, Iowa; Kirksville, Cape Girardeau, Joplin and Ft. Leonard Wood, Mo; Marion, Quincy and Decatur, Ill.; Owensboro; and Jackson, Tenn.

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