City awaits bids, ponders shift in airport focus

City awaits bids, ponders shift in airport focus

By JIM GAINES

The federal subsidy for passenger flights between Macon and Atlanta is unlikely to go away — yet, said Scott Coffman, airport manager, though he cites only his unofficial impression of federal intentions. “The indications I’ve received from the (Department of Transportation) is that they’re not looking to eliminate the subsidy at this time,” Coffman said. “I’m fairly positive about bidders that might bid on this.”
For two years, Georgia Skies has flown 26 times per week to Atlanta and back, currently charging $39 for the 50-minute flight. But the nine-seat Cessnas often made the trip nearly empty, so the $1.4 million federal subsidy Georgia Skies received for “essential air service” was divided among far fewer passengers than in previous years. For 2009, it worked out to an average $464 subsidy per passenger — more than twice the federal maximum for airports like Macon.

The federal Department of Transportation announced Oct. 7 that it was rejecting all four bids received for a new two-year passenger service contract at Middle Georgia Regional Airport, and allowing just 24 days for new bids from the same or other carriers.
Georgia Skies’ contract ran out Sept. 30, by which time four bids had come in from companies to continue the service. Georgia Skies, Charter Air Transport, Sovereign Air and Gulfstream offered bids, with Sovereign Air seeking just $571,949 per year, though promising only 14 flights a week; but all were too much for federal officials.
The Department of Transportation said it will continue subsidizing Georgia Skies at the same rate as the expired contract, but warned that the new round of bidding will be the “final and only” chance for a new deal.

Airport use
Passenger service is provided on a two-year contract, which Delta Airlines held until 2008, Coffman said. Delta had nearly 20,000 passengers from Macon to Atlanta that year — but when Georgia Skies took over, that use dropped precipitously to just under 3,000. Though official numbers aren’t in, the average number of passengers in 2010 looks “about the same” as 2009, Coffman said.
When Georgia Skies took over passenger service, it flew to a smaller, general aviation airport rather than Hartsfield-Jackson Atlanta International Airport, Macon mayoral spokesman Andrew Blascovich said. That additional inconvenience may be what drove away some travelers.
Since Oct. 2009, however, the carrier has gotten permission to fly directly to Terminal E of Hartsfield-Jackson, signed an agreement with Delta to let passengers transfer baggage without additional charges, and lets passengers avoid the hassle of a second security screening before boarding a connecting flight, Coffman said.
“They did a lot of work,” he said.

Greg Kahlstorf, CEO of Pacific Wings, the parent company of Georgia Skies, said there were many factors that went into the change in passenger numbers, though he wouldn’t be more specific.
It was always Georgia Skies’ intention to fly directly to the main Atlanta airport, as the company does at the other 18 major airports it serves, he said.
“Atlanta’s just a big airport, and it takes a while to get a lease arrangement there,” Kahlstorf said.
Heavy dreams
With passenger service lagging, the city wants to turn Middle Georgia Regional into a cargo hub, Blascovich said — but that will take a lot of money.
The main runway is now 6,500 feet long, which is about 2,000 feet too short for big cargo planes, Coffman said. The city just received a $3 million federal grant to resurface the runway, but that won’t lengthen it.
Making the runway long enough for heavy-duty cargo service would probably require bridging Sardis Church Road, which itself is being widened, he said.
Altogether, that project could run $18 million to $20 million, Blascovich and Coffman said. For comparison, the airport’s total current assets — property and improvements — are rated at $13 million.
Most large-scale airport improvements are 95 percent paid for by the Federal Aviation Administration, with state and local governments splitting the rest.
Lengthening the runway might require $500,000 each from local governments and the state, but the big task is persuading the federal government to cover the rest.
Macon is lobbying Georgia’s senators to include that funding in future appropriations, as well as a better airport road connection to major highways, Blascovich said.

Profit and loss
Middle Georgia Regional Airport covers about 1,100 acres. That leaves plenty of land available for development of factories, storage and repair facilities and cargo distribution centers, Blascovich said.
The airport hosts hundreds of well-paying jobs from major employers, such as Timco, Bombardier, Boeing and Kohl’s, Coffman said. But it can handle a lot more. Even with lots of military and corporate traffic, the airport is nowhere near full capacity, he said.
“It’s an underutilized asset at this point,” Coffman said.
Between rent from those on-site businesses and fees for runway and hangar use, the airport was a few hundred thousand dollars in the black last budget year, Blascovich said. Should there be any future shortfall, however, the city would have to make up the difference, he said.
The airport is set up to be a self-supporting entity, and does pay all its bills, city finance director Tom Barber said.
Even though little direct cash comes from passenger service, the loss of a commercial carrier would probably count heavily against the airport in consideration for future federal improvements, he said.
Most of the airport’s expensive features were primarily funded by the FAA, and that’s the real problem, in a sense: for the huge amount of federal, and some local, money poured in the airport, the city’s not getting much of a return on the investment.
“At some point we’ve got to do something in addition to what we’re doing now to take better advantage of the asset,” Barber said. “When you think about what a small number of passengers roll through there in a year, it’s just really a shame.”

Bid prospects
For now, the airport is waiting to see what new passenger service bids come in. The federal government actually solicits bids, so the city hasn’t taken a direct hand in the process, Coffman said. City officials talked a bit with Georgia Skies and Gulfstream about their proposals before the last round of bids, but the other two bids came in with no prior contact between airlines and the city, he said.
Georgia Skies is reworking its bid, but Kahlstorf wouldn’t discuss current service or any proposals for new improvements.
“It would just be premature and inappropriate for any party to say anything about it,” he said. “We as a rule just don’t comment on any procurement process while it’s ongoing.
“If we choose to bid we’ll address all these issues, as I hope will all the other vendors. We’re looking at the situation and trying to find out what’s best for the business model and the community.”
Coffman said he’s sent a copy of the bid packet to one additional carrier in hopes of attracting another bid, but the field of possible contenders isn’t large.
“There’s not a lot of airlines out there,” he said. “They’ve been buying each other for the last couple of years.”
To contact writer Jim Gaines, call 744-4489

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