May 14--SARASOTA -- Sarasota-Bradenton International Airport is keeping an open dialogue with Southwest Airlines despite its own marketing encouraging travelers not to fly with the carrier.
Rick Piccolo, president and chief executive officer of the airport, told the Sarasota Manatee Airport Authority Board Monday that the two sides are talking again.
"We reinstituted contact with them. All we're doing is talking," Piccolo told the Herald. "It's a good exercise for both. Good for us, good for them."
After Southwest AirTran left SRQ airport in 2012, the airport started a "Do You SRQ?" marketing campaign asking passengers and organizations to pledge to use the airport and its carriers, basically nixing Southwest from the equation.
While Piccolo is still pushing that theme, internal talks between the two sides to resume service are ongoing. Piccolo doesn't want to get travelers' hopes up as there is no timeline, and "it's a long way from new service."
"What applied a year ago may not apply today, and may not apply five years from now," Piccolo said. "We're very gracious, looking forward to continuing the dialogue."
A Southwest official said it is not unusual to talk with airports where it has discontinued service.
"We talk to airports all the time. That's an ongoing relationship building we do and information gathering we do. We're always happy to have those conversations," Southwest spokesman Chris Mainz said. "It's not that we walk out of a market and never talk to them again."
Recovering passengers
Following the loss of AirTran, SRQ passenger traffic decreased 2.6 percent in 2012, according to Piccolo's annual report.
"We recovered about 60 percent to 65 percent of total passengers that AirTran took away," Piccolo said.
So far, passenger counts are down 14.4 percent through one-third of the year, but Piccolo expects ridership to improve during the summer, ending the year at an 11 percent to 12 percent decrease.
The full-year additions of JetBlue service to New York and Boston should improve ridership, he said, and planes are leaving SRQ in the 85 percent to 93 percent occupancy range.
Opportunity is there to recoup passengers lost by AirTran's departure, whether that's with Southwest or a competitor filling the gaps, airline industry analyst Michael Boyd told the airport authority Monday.
A study showed 360,000 passengers on nonstop flights did not go to Tampa for nonstop flights to those destinations served by AirTran from SRQ, including Baltimore, Indianapolis and Milwaukee, Boyd said. The airport found a decrease of nonstop passengers to those destinations the following year out of Tampa, he said.
One possibility is passengers either opted to drive, chose another destination or stopped flying, he said.
"If you put the seats in, they will come," Boyd said. "With markets like that, there are people who want to come here."
To regain passengers, nonstop service would have to be offered, he said.
"There are stimulation effects on traffic in this community, but it's influenced by the non-stop service," he said "It just goes away to another city where it's non-stop."
A Massachusetts Institute of Technology study shows SRQ departures decreased the most among Florida airports over the past six years at 38 percent from 2007 to 2012. The loss caused a 24 percent reduction in available seats during the same time, according to the small community air service trend report by MIT's International Center for Air Transportation.
Tallahassee, close behind with 35 percent fewer departures, has the worst seat reduction in the state at 31 percent; Sarasota's 24 percent seat reduction was second worst.
Boyd considered the AirTran bubble a gift, being able to show the effects of the future of the airline industry. AirTran pulled out of markets like Indianapolis because they didn't connect to other destinations. That has changed since the Southwest merger and realignment, he said.
"From an access point of view, service is much better than what it was before," Boyd said.
It will take about six years to fully recover the traffic that AirTran brought, Boyd said.
Airport upgrades
Outside of Southwest, Boyd said there are opportunities for SRQ to upgrade service through Delta to Atlanta, US Airways to Charlotte and United to Chicago. Expansion should be targeted with American Airlines to Dallas, Delta with year-round service to Detroit and United to serve Denver, Boyd said.
Authority board member Dr. Gary Kompothecras is pushing for service to Houston to connect with other western cities.
"I think anybody can fill that void to Houston. From this place, nobody can get out to the West," Kompothecras said. "A lot of people are affluent, and they want to go to Colorado, Tahoe, Calif., and all that."
Dallas would be more likely than Houston, Piccolo said, because it is home for American, which is merging with US Airways.
SRQ officials are presenting service pitches to both companies, Piccolo said, because no one knows which airline management will head the merged company.
Financially, SRQ airport is doing well thanks to its conservative fiscal approach, according to the report. A surplus of $821,000 was rebated to the airlines, which reported a net $2.4 million from operations in fiscal 2012 -- a more than threefold increase from $735,000 in fiscal 2012.
The airport is on track to be debt-free in August 2014, paying off its terminal built in 1989 while operating on a pay-as-you-go basis except for the $150 million bond for the terminal.
"I think our conservative financial management has strategically placed the airport in a strong position to weather the economic storms and we are better positioned than most airports from a financial perspective," Piccolo reported. "The Southwest announcement is a prime example of how the prudent fiscal policies positioned SRQ to weather the volatile swings in aviation with a minimal impact on airport facilities, services, and staff."
Several airport improvements are expected in the coming years. A customs inspection facility continues to progress, and the airport hopes to advertise bids to construct the areas this year.
A new air traffic control tower is designed and the airport hopes the FAA will fund construction, but sequestration budget cuts in Washington stalled those talks. The state and the airport have each committed $4 million to the tower, which is estimated to cost $12 million to $15 million, Piccolo said.
The tower would be relocated to the southwest part of the property to allow about 40 acres for hangars and other real estate development. Without relocating the tower, the property couldn't be developed because the new buildings would block the view of the air control workers, Piccolo said.
The airport is also hoping to finalize regulatory approval for its $2.5 million customs facility, which is projected to help lure international carriers, Piccolo said.
The customs facility will handle 130 to 150 passengers during a peak hour, which is fine for narrow-bodied aircrafts, but European carriers use larger planes, so the facility needs to handle 250 to 300 passengers in a peak hour if it wants to attract carriers such as Monarch, he said.
Seventy percent of the construction cost is funded through grants, he said.
The authority released its annual performance evaluation for Piccolo on Monday, and the chief executive officer received a near perfect score save for one incomplete grade.
Piccolo earned 250 points out of a possible 300. Newly appointed board member Dr. Peter Wish declined to grade Piccolo because Wish only attended one meeting.
"I don't feel I have enough information to make my evaluation," Wish wrote in his review. "From what I have observed so far about Mr. Piccolo's performance, I am very impressed."
Wish was appointed by Gov. Rick Scott in February to replace former board member Bob Waechter, who quit in December after he was accused of felony identity fraud and improper campaign contributions relating to allegations he purchased Visa gift cards in a Republican political rival's name and donated those funds to a Democratic fund.
Piccolo is graded on 10 areas: business development, relationship with board, financial management, public image, staff development, community relations, strategic planning and goals, leadership, job and industry knowledge and regulatory compliance.
Charles Schelle, business reporter, can be reached at 941-745-7095. Follow him on Twitter @ImYourChuck.
Copyright 2013 - The Bradenton Herald
