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Airport looks into adding new carrier |
| Updated: July 12, 2010 |
By Josh O'Leary
Press-Citizen, June 30, 2010
With hopes of lower ticket prices for flights out of Cedar Rapids, local business leaders are intrigued by the possibility of bringing a new low-fare airline to the Eastern Iowa Airport.
Tim Bradshaw, the airport's new director, said Tuesday that he will examine the idea and discuss it with community leaders to gauge their interest in attracting a low-cost carrier, potentially by offering subsidies.
"It's one of the options we're looking at," said Bradshaw, who began his job Monday after previously working as deputy executive director and chief operating officer for the Louisville Regional Airport Authority.
"This is the community's airport, and we're going to listen to the community, and they've been talking about low-fare service for a while now. Everybody wants low fares."
The addition of a low-fare carrier -- those with lower operating costs than the established or "legacy" airlines -- could cause other carriers at the airport to be more competitive with their rates. But budget carriers often seek revenue guarantees or subsidies from the community before establishing a new stop, Bradshaw said.
Bradshaw cautioned that such agreements can be "a double-edged sword."
"There are several examples across the United States where communities have raised money and brought a low-cost carrier service in, and when the money runs out or they want more money, then the service pulls out," Bradshaw said. "That's the risk you run."
Josh Schamberger, a member of the airport's commission and the president of the Iowa City/Coralville Area Convention and Visitors Bureau, said pursuing a low-fare airline is an opportunity worth pursuing.
"The idea is most importantly to curb some of the leakage that is happening to Moline and Illinois," Schamberger said. "If you travel out of the Eastern Iowa Airport, one of the biggest things you'll hear is that the fares aren't as competitive with Moline. So in order to get them competitive, one of the first steps Eastern Iowa needs to look at is whether we can secure a low-cost air carrier."
Pam Hinman, director of marketing and communications at the Eastern Iowa Airport, said a 2008 study showed the airport served 75 percent of the local market, while the other 25 percent went elsewhere for air travel. That "leakage" included 11 percent to Chicago, 9 percent to Moline and 5 percent to Des Moines.
The Eastern Iowa Airport currently has a low-fare carrier in Allegiant Air, which has four routes to vacation hotspots Las Vegas, Orlando, Phoenix and Tampa. Schamberger said it's low-cost carriers that travel to major markets, however, that cause the bigger airlines to lower their fares.
University of Iowa spokesman Tom Moore said UI, which is one of the largest entities the airport serves, is interested in learning more about the idea.
"As obviously frequent users of the airport, the University of Iowa is indeed eager to hear more about the airport management's plans to expand commercial operations," Moore said.
Iowa City Area Chamber of Commerce President and CEO Nancy Quellhorst said the Eastern Iowa Airport loses about 200,000 passengers annually to competitors, which translates to $3 million in lost revenue. She said a low-cost carrier would increase traffic and result in lower fares.
"It would behoove us to invest in low-cost air service," Quellhorst said. "The community's economic success is predicated on access, and affordable access is critical to our growth."
Bradshaw said the airport is in communication with its existing carriers and other airlines to identify new markets.
"We're working on a top 10 list that the tickets show we would have some passenger support for, so we would go to those airlines and make our presentation on why we believe Cedar Rapids is a good city to fly into," he said.
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