By David Dykes
Business writer
An Upstate lawmaker this week is expected to propose initiatives to boost airline competition at the state’s airports, including Greenville-Spartanburg International Airport, where efforts are underway to lure discount carrier Southwest Airlines.
State Rep. Bill Wylie, a Simpsonville Republican, said the legislation he expects to introduce will center on creating a state-administered fund to help an airline offset startup costs at any of South Carolina’s commercial airports.
While Wylie said his measure won’t target a specific airport, local officials believe it will be crucial to their efforts to bring Southwest to GSP — and put downward pressure on local airfares that are among the highest in the nation.
Wylie said he has lined up several sponsors to support the legislation, which would include a fund of approximately $15 million to reimburse certain losses for up to 24 months based on an agreement the airport and a carrier believe is equitable for both sides.
Local business and community officials hope to attract Southwest this year, but an airline spokeswoman said last week “there is no imminent plan” to announce any additional new service for 2010.
“First and foremost with Southwest, it’s not done, and it’s not dead,” Dave Edwards, GSP’s executive director, said in an interview.
“There’s always a possibility of Southwest being able to come in 2010,” he said. “Part of that would be can we assemble something that is of a nature that attracts Southwest to come to the community? I don’t think there’s any question that we have the market here, we have the pent-up desire of this community to have a low-cost, low-fare carrier in the market.”
Airline officials have confirmed that Southwest, the biggest U.S. discount carrier, sent its scheduling and planning officials to Greenville. The officials cautioned that airline representatives have attended similar recruitment meetings in many other cities.
In a statement last week, Southwest’s spokeswoman, Ashley Rogers, said, “Our new Panama City Beach (Fla.) service that begins in May is the only new service that’s scheduled for 2010.”
“The leadership here at Southwest is always open to exploring new areas and will continue to monitor the economic environment in an effort to make the best decisions for our customers and our employees,” Rogers said.
A spokesman for Gov. Mark Sanford said the Governor’s Office likely would wait to see the final language before deciding whether to support Wylie’s legislation.
The spokesman, Ben Fox, said, “carve-out incentives of this nature can be troublesome for some” and would need to go “through a rigorous cost-benefit analysis to make sure the taxpayer is protected alongside potentially boosting the local and state economy.”
Local business and community leaders are eager to bring Southwest and its large jet service to GSP, where regional carriers and smaller commuter aircraft dominate.
High airfares and a lack of western routes are causing two of every three potential passengers to bypass GSP in favor of flights in other cities, primarily Charlotte and Atlanta, according to business leaders and airport officials.
Currently, Allegiant, a low-fare carrier, provides service from GSP to several locations in Florida.
Edwards said GSP needs to broaden the airport’s discount-carrier offerings, particularly for business travelers who often fly on short notice.
“There is no question that people know that we’ve been in dialogue with Southwest,” he said. “We are trying to develop a partnership arrangement with the community, including the state Legislature, in order to assemble a package that might be attractive enough to secure service from Southwest at some point in the future. That’s our goal at this point — to try to get that in place.
“Most airlines will tell you for them to start new service at an airport, the station cost at the airport to install equipment, phones, get all of their build-out done for facilities usually runs a half-million dollars to $600,000,” Edwards said.
For airport operators, it’s important to “minimize that cost of entry for them,” and “basically just give them a turn-key operation that they can walk in the door with their staff, bring their ancillary equipment to the table, but have all of the hard infrastructure in place,” he said.
“That creates a much better situation for them to entertain coming into the market,” he said.
Edwards came to GSP last July after working at Asheville, where he helped attract more airline service, including discount carrier AirTran Airways.
It was a similar situation to GSP’s, Edwards said.
Airport officials in Asheville wanted more competition and developed an air-service plan to identify incentives that were allowed under FAA regulations, including marketing dollars and fee waivers, he said.
Airports can’t provide direct cash subsidies or direct revenue guarantees to an airline to ensure they’re going to be profitable in a market, Edwards said.
Overall, it took about five years of discussions with AirTran before Asheville secured the airline’s service, he said.
“That’s a long period of courtship,” Edwards said, “and it’s a constant discussion that you have to have.”
In the end, Asheville provided AirTran — as part of the airport’s air-service incentive policy — with marketing dollars and fee waivers and did some facility improvements “that would not only benefit them in their startup but also would enable us to help lure some other airlines to the table in the future,” Edwards said.
AirTran officials couldn’t be reached for comment.
These days, carriers are looking for an edge, and increasingly, funds need to go to keeping their costs down, Edwards said.
“It used to be there were no incentives required, essentially, to get air service to the table,” he said.
“Now, that’s become the standard, and now we’re kind of moving into this next phase, because of the economic climate, of having to help a carrier mitigate their risk in the first two or three years of providing service in order to give them an opportunity to get up and running and become successful in a market,” Edwards said.
Wylie has said his legislation won’t be geared to any one carrier. It will be an air-service development program, administered by state aeronautics officials, for any of South Carolina’s commercial airports, he said.
That suits Edwards, who said South Carolina needs to “raise the attention, heighten the awareness of how important aviation is to the future economic success of the state.”
It’s an economic opportunity similar to BMW’s presence in the Upstate or Boeing’s plan for the Charleston area, he said.
“Without appropriate air service to the state, it will never achieve the highest level of economic benefit that it can achieve,” Edwards said.
“Ultimately, it’s really all about jobs and quality of life and all of those things built around it,” he said.
For now, GSP officials are talking to several discount carriers, including Southwest, about starting service here, Edwards said.
“I think we have a good chance to be successful in securing a low-cost, low-fare carrier,” he said. “I think we have a good possibility in being successful with Southwest. But again, it’s not done, and it’s going to take all of the efforts that are currently underway, from the state Legislature to the local community to the private sector to the airport commission in order to bring this thing to fruition.
“And if all of those pieces of the puzzle don’t come together, it’s probably not going to happen.”
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