Miami, Fla. May Try Fee Cuts to Lure Flights

Miami International Airport plans to launch an incentive program for airlines -- with a year's free landing fees for new flights -- to lure more domestic and international service and to stem the loss of passengers to Fort Lauderdale.

Among the first beneficiaries could be JetBlue Airways, which is considering starting Miami service, possibly in January.

For years, Miami's traffic has diminished, while Fort Lauderdale-Hollywood International Airport has grown faster than any large airport in the country by attracting both low-cost carriers and extra flights from major airlines.

MIA says its proposed bait would make the airport more competitive, boost revenues and help lower fares. An airline flying a Boeing 737 on one flight a day would save about $75,000 in a year. That's less than $3 per passenger.

''We think it has tremendous potential to help us increase our passenger base and attract new airlines, and it provides an incentive to the people who are here to increase their flights,'' said Carlos Bonzon, Miami-Dade's interim aviation director. ''The more competition we have at MIA, the lower the airfares, the better it is for our residents.''

The program, which must be approved by the County Commission, has been in the works for about a year. Miami-Dade Aviation's assistant director of business development, Miguel Southwell, said the incentives were spurred in part from meeting with potential airlines and hearing what other airports were offering them.

Fort Lauderdale-Hollywood; San Jose, Calif.; Dallas-Fort Worth; and Portland, Ore., all offer a variety of incentive programs, he said.

''It's very fashionable among airlines these days, particularly the low-cost carriers, to look for incentives,'' Southwell said.

DISCOUNT CARRIERS

The goal, Bonzon said, is to bring in discount carriers, plus international flights to such places as Japan, China, Hong Kong, South Africa, Kenya, Nigeria, Denmark, Belgium and Ireland.

''Absolutely, this will help,'' Bonzon said. ''We have four runways. We don't have any congestion in the airfield like other airports are beginning to experience, like Fort Lauderdale. For the low-cost carriers, that is a big advantage to get in and out quickly and save on fuel.''

Bonzon said JetBlue, which flies from Fort Lauderdale, already plans to start flights from Miami.

But JetBlue spokesman Gareth Edmondson-Jones said Miami is still under consideration.

''There are a lot of things on our consideration list,'' Edmondson-Jones said. ''Miami is on it, absolutely, but literally, until we announce it, it's not official.''

Regardless, the incentive program alone won't stop the hemorrhaging of passengers to Fort Lauderdale, said Michael Boyd, president of the Boyd Group in Evergreen, Colo.

''You have to have a whole slew of other things,'' he said. ''You have to have rates and charges that are comparable.'' Incentives would only make a dent in MIA's current cost per passenger of about $14.90 -- including landing fees, gate fees and other costs -- versus $4.29 at Fort LauderdaleHollywood.

During the past decade, MIA's domestic traffic has drained to its neighbor to the north.

MIA's share of South Florida's departing and arriving domestic passengers peaked in 1995 at 56.8 percent and has fallen ever since, to 35.4 percent in 2003.

Meanwhile, Fort Lauderdale's share has grown since 1995, from 43.2 percent to 64.6 percent in 2003.

In addition, from 1997 through 2004, the six major U.S. carriers -- American, Continental, Delta, Northwest, United and US Airways -- have decreased domestic flights at MIA, while expanding at Fort Lauderdale. MIA's South Florida share of those carriers' departures has fallen from 73.2 percent in 1997 to 62 percent in 2004.

IN BROWARD

Fort Lauderdale-Hollywood has had an incentive program in place since October 2000, which also offers a year's waiver of ticket counter and gate charges and other fees.

Ed Nelson, Fort Lauderdale-Hollywood's director of air service development, said the program has helped that airport, but it has not been the key to new flights.

''Every airline that has brought service here has done it because it's needed and the market is there,'' Nelson said.

While MIA's plan would save a carrier about $75,000 in annual landing fees, the airport still would earn about $427,000 to $530,000 in other fees and charges for that same flight. Additional passengers also would presumably spend money on concessions and parking.

Miami-Dade Mayor Carlos Alvarez said Tuesday that he would be in favor of the program, though he was not familiar with its details.

''I'd be in complete support of anything that will make MIA more competitive in a very competitive market,'' he said.

THE FUNDS

To qualify, an airline would have to begin year-round, nonstop service to any U.S. or Canadian destination, or nonstop or connecting service to any international destination not currently served. The flight must result in a net increase in the carrier's total flights to that city.

Funds will come from a $5 million airport improvement fund, Bonzon said. Total landing-fee waivers will be capped at $3 million a year, based on a first-come, first-served basis. MIA proposes to reevaluate the program after two years.

The proposal will go to Miami-Dade's regional transportation committee on April 14, and if endorsed, to the County Commission on May 3 for consideration.

Loading