XNA hopes to boost growth with low-cost carrier

Several ongoing and upcoming activities at the Northwest Arkansas Regional Airport are designed to position XNA for growth as airport officials work with consultants and legislators to negate the potential negative impact of federal budget cuts.

None of the efforts underway is more talked about than the airport’s need for a low-cost carrier to serve the local business community. Talks have escalated over the past few months now that the airport concourse and added gates are available.

LOW COST DEMAND

In March, a consultant group who works with smaller airports to attract low cost carriers held two meetings in Northwest Arkansas.

Cameron Smith & Associates brought together about 25 large Wal-Mart suppliers to who fly in and out of the area routinely in their business operations to meet with the consultant. Over the past month suppliers say they have continued dialogue with the consultant to better assess their overall needs. The parties desperately want to see a low-cost carrier option for business travel.

Mike Malone, director of the Northwest Arkansas Council, said during previous business surveys conducted by the region’s five largest chamber of commerce offices, a recurring theme voiced among executives was the need for more competitive airfare out of XNA.

The surveys found the number of flights available by the present carriers at XNA are sufficient, but the higher cost has businesses and individuals driving north and south to catch cheaper flights.

“We know 39% of our customers go elsewhere because our costs our higher," said airport director Kelly Johnson.

Smith says what is not known is how many business professionals get into their car and drive to Dallas for regular meetings, which is business lost to the airport and a time drain for companies.

“We worked four years to get Allegiant to come here, and this spring is their fourth anniversary at XNA. We will get another low cost carrier. We are working feverishly toward that endeavor,” Johnson said.

She said the two hurdles that stand between a low cost carrier flying in and out of XNA are overall industry consolidations and some of the six discounters left fly big jets out of densely populated areas.

Southwest would be an exception, and a good fit at XNA but since its merger with AirTran, airports like Lubbock, Texas, comparable in size to XNA, are losing routes. Johnson said Southwest has been pulling out of some of their smaller markets. An exception would be Southwest’s recent entry to Branson, which is believed to a subsidized venture.

Similar conversations about the potential for local subsidies have been entertained, outside of the $950,000 grant the airport received last year to help recruit a new carrier. Johnson said attracting a new carrier doesn’t necessarily mean the new entrant will be successful.

People have to be convinced to try the new carrier and it’s not uncommon for existing carriers in an airport to lower their costs to be more comparable to a discount carrier to prevent customers from converting. The grant is designed to help defray potential lost costs on behalf of the new carrier while it is building a clientele.

A big part of attracting a new carrier is being able to establish that the community has a commitment to serving the carrier and its customers’ needs. That includes marketing to potential carriers and the local business community about what unique attributes Northwest Arkansas offers.

“We’re one of hundreds of communities that are trying to get new service, including the discount carriers that everyone wants,” Johnson said.

CONSTRUCTION UPDATE

The runway reconstruction project is on schedule with a targeted completion in the spring of 2014, said Barbara Busiek, director of construction and grant administration. The project includes replacing the original runway and making other drainage and lighting improvements. The project is funded through three, $10 million federal grants.

“The contractor has completed the majority of the demolition work outlined in Phase 1. The airport, working with the paving contractor The Harper Co. and Rogers Iron and Metal Corp., has made great efforts to recycle all the copper wire, dowel bars and pavement that is removed as part of the demolition process,” Busiek said.

“The contractor is working on the removal of existing (navigational aids), installation of under drains, airfield electrical, subgrade preparation and has started paving on one of the connector taxiways.”

An even larger project, constructing a four-mile stretch of road from the planned Springdale Bypass and the airport, will cost an estimated $93 million and will come from various funding sources including local airport and earmarked funds. Johnson said they are still waiting on environmental approval before the project can move forward.

“We’re hoping to have the approval this year but we’re having to wait for that whole process to work itself through,” she said.

MERGERS & CUTS 

Airport officials also have their eye on the federal budget cuts, which could affect XNA in several ways. With all but two of the state’s control towers being scheduled to shut down, XNA officials are “troubled” by the fact that Fort Smith’s airport control tower is on the list.

“They have our approach control so we need to know who will handle our traffic if they close that,” Johnson said.

Cuts in the Homeland Security budget includes furloughing screeners and no screeners are allowed to get overtime. There is also a potential staffing issue for the exit lanes, which means the airport will have to fund those positions, Johnson said.

Aside from ongoing budget restraints, regional airports like XNA are also vulnerable to the ongoing consolidation across the airline industry. The pending merger of American Airlines and U.S. Airways will affect some route consolidation over the next year or so.

Johnson said there is a possibility of new flights but it’s too early to know for sure. She said U.S. Air has some routes that are not available at XNA and those might be introduced in the future.

Last week American Airlines did announce American Eagle flights from Los Angeles to XNA, which begin August 27.