OIA to Offer Incentives to Lure Airlines

June 18--Airlines this fall could be offered rebates of $1 million or more a year to start flying in and out of Orlando International Airport.

The airport board decided unanimously Wednesday to adopt an incentive plan to convince passenger carriers and cargo operations that Orlando is the best place in Florida to expand existing service or start anew.

Vicki Jaramillo, who has been recruiting airlines to the airport for 20 years, said the program "ups the game of Orlando."

Several airlines -- which she did not name -- are "champing at the bit" to come to Orlando International and, she said, the incentives could help seal the deal.

Since opening in 1980, Orlando International has wooed airlines largely by selling Metro Orlando as the home of Walt Disney World and other attractions, as well as proximity to beaches and a growing technology hub.

But, aviation consultant Bob Hazel told the board, that approach may no longer be enough. Most airports, including Orlando's chief in-state rivals in Tampa and Miami, offer some sort of financial assistance to prospective airlines.

Tampa International, he said, waives landing fees and terminal rent for two years for new long-haul international carriers, the type of airline airports covet because they carry so many free-spending passengers. Tampa also offers marketing money.

Miami International is willing to pay as much as $500,000 for marketing and no landing fees for a year for a similar airline, according to Hazel.

The plan adopted by Orlando -- which takes effect with the new budget in October -- could cost as much as $4 million annually.

It would rebate up to 100 percent of landing fees, terminal rent and other fees after the airline has been using the airport for a year. If the carrier is a long hauler from Europe or other lucrative areas, the airport also would throw in up to $750,000 in marketing costs the first year.

The total cost for one airline could go as high as $1.2 million in a year's time, an Orlando International chart showed.

But, Jaramillo said, the airport would not lose money on the arrangement because passengers from those flights would spend nearly $1.8 million on concessions at Orlando International shops and restaurants during the year. Combined with baggage fees and a passenger facility charge, the airport would clear more than $900,000 a year, Jaramillo estimated.

Orlando International Chairman Frank Kruppenbacher said he has accompanied Jaramillo overseas on several trips as she tried to sign up airlines and could see the lack of incentives was hurting her efforts.

"You're playing with one arm," Kruppenbacher said.

Airlines, buffeted by competition and rising fuel costs, are looking for any way to increase the bottom line, Hazel said. The annual cost to an airline, he said, of daily flying a 777-200 jet that can carry up to 263 passengers is $117.5 million.

Cutting some operating expenses for up to two years "can provide an edge," Hazel said.

dltracy@tribune.com or 407-420-5444.

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