It’s been more than two years since Mike Hainsey approached local governments to put together an incentive package to help bring westbound air service to the Golden Triangle Regional Airport.
While that effort has not produced the desired effect, the GTRA director views it as more of a delay than a denial.
“What I can tell you is that we are still very active in negotiations and discussions with American Airlines with flights to Dallas,” Hainsey said. “They are very interested. For them, it’s just a question of having the airplanes and the pilots. Right now, there is a shortage of both.”
Hainsey said efforts to add westbound service at GTRA came at a time when the airline industry was going through some major changes, including consolidation of airlines — there are now just four major domestic carriers — a shortage of pilots due mainly to a change in retirement policies and pilot licensing requirements, increased fuel prices and a strategic move to eliminate the smaller, 50-seat jets from fleets.
“That’s had a very big impact on smaller, regional airports,” Hainsey said. “If you look at the regional airports in our state, you see that. Tupelo, Greenville, Hattiesburg and Meridian have all lost mainline air service. Sometimes, breaking even is winning, and we’ve been able to maintain our carrier service very successfully where the others haven’t.”
That is not to say the plans for adding westbound service have fallen off his radar, however.
‘A new model’
“What you are seeing in the industry today is a new model, and I feel we fit in really well with it,” Hainsey said. “It used to be the model was based on how many seats were filled. Now, it’s all about what sort of fares an airline can attract.”
Today, airlines are looking to increase the number of premium fares — international and business travel, something that has been a key component to GTRA’s success with Delta’s three daily flights to Atlanta.
“The fares for international travel are higher, and that’s what airlines are looking for,” Hainsey said. “Business travel is also very profitable for airlines. When your boss says he wants you to fly to Portland for a meeting in a day or two, you’re not in a position to buy that ticket months in advance to get the lower fares. You’re paying a higher fare because getting there when you need to be there is what’s important.”
Hainsey said about half of GTRA’s customers are international travelers, about twice the rate of comparable regional airports. The area’s industry means a high volume of business travel, as well. Its 85-percent occupancy rate is appreciably higher than other regional airports, he said.
“The truth is, no airlines are expanding service,” Hainsey said. “If you get service, it means somebody else is losing theirs. I think GTRA makes a strong argument for that. Airlines are not going to go anywhere they can’t make money. They don’t have to.”
Local funding
In early 2014, Hainsey approached local governments to contribute to a $1.5 million package to help secure westbound air service. It includes a combined $250,000 from Lowndes County and Columbus, $200,000 from Oktibbeha County and Starkville and $50,000 from Clay County and West Point.
That money, along with a $750,000 U.S. Department of Transportation grant and $250,000 in waived fees and marketing assistance, has been a key tool in the negotiations with American Airlines.
The money will not necessarily be spent, Hainsey noted. Rather, it is provided to insure the airline meets its agreed-upon income in making the move.
“We will sit down with the airline and determine what we believe to be an accurate figure for their income for the year,” Hainsey said in his presentation to the local governments. “If, after the year ends, their income is less than that figure, we will use the money from the grant and the local governments to make up the difference.”
Any money not spent to make up that gap would be returned to the local governments, he said.
“We are in favor of it and think it’s a good idea,” said Harry Sanders, president of the Lowndes County Board of Supervisors. “We approved it two years ago, but we didn’t put it in the budget for this fiscal year because Mike said there was no way the air service would happen during the year. … If he asks us to put the money into next year’s budget, I don’t see any reason why we wouldn’t. I don’t think it’s much of a risk.
“We did the same thing years ago with a flight from Columbus through Shreveport to Dallas and that money was never touched,” he added. “When the recession hit in 2008, that flight went away, but it didn’t have anything to do with our agreement. I don’t think it cost us anything.”
Oktibbeha County Board of Supervisors President Orlando Trainer said he believes the board still supports the agreement.
“I can’t speak for all of the board members, obviously, but I think we’ll continue to support this,” Trainer said. “We knew going in that the time frame was vague, that sometimes these things don’t materialize overnight. Getting a westbound flight would be a great thing. That hasn’t changed, so I do believe the board would want to keep that commitment. We understand how important this is.”
Hainsey said the earliest GTRA could expect to see westbound flights would be in the fall.
“Once an agreement is reached, it’s going to take three, four months to work out the logistics,” he said.
Industry travel
Apart from the ongoing talks with American Airlines, Hainsey said GTRA is doing well.
Changes in ownership at two local industries have not negatively affected GTRA’s business, he said. Russia-based steel company Severstal was sold to Indiana-based Steel Dynamics, Inc. in September 2014 while Washington-based Weyerhauser sold seven of its facilities — including two mills in Lowndes County — to Memphis-based International Paper in December.
“We really haven’t seen much change,” Hainsey said. “Steel Dynamics still sells steel all over the world while International Paper still travels to the same places that Weyerhauser traveled to. Our local industry, along with Mississippi State, which is our biggest customer, still gives us a tremendous amount of traffic.
“We’re in a strong position and I think once we get west-bound air service, we’re really going to take off,” he added. “I really believe that will happen. It’s just a matter of time.”
Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected].
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