Stalemate over fees ensues between XNA, airlines; parking deck construction on schedule

Carriers at Northwest Arkansas Regional Airport (XNA) and the airport board have reached an impasse after executives of two airlines explained their concerns with the airport’s existing rate structure, and airport board members argued the carriers’ fares were too high, pushing some passengers to airports with lower ticket prices.

On Wednesday (April 11), Chuck Allen, managing director of government affairs for American Airlines, and Christa Horvath, airport affairs manager for United Airlines, spoke to the Northwest Arkansas Regional Airport Authority about ongoing negotiations between the carriers and XNA.

Allen described the negotiations as a stalemate in its fourth year. He and other carriers have wanted low-cost carrier Allegiant to pay the same fee to use the airport as the legacy carriers, including Delta. The carriers, which operate from the A gates, pay gate rental fees to XNA, while Allegiant, which operates from the B gate, pays a per-turn use fee, which is based on landings and takeoffs. United also operates from the B gate and pays the per-turn use fee when it operates there. The B gate is on the northwest side of the terminal, while the A gates are on the northeast side.

Horvath wanted XNA to allow United to pay the same per-turn use fee for operations from the A gates. Airport Director Kelly Johnson said the carriers didn’t want Allegiant operating from the A gates. After the meeting, Allen said it was news to him United wanted to operate from other A gates. He also said American Airlines isn’t going stop offering service at the airport and expects negotiations to continue.

But XNA board members and staff were less optimistic about the latter. CEO and executive director Scott Van Laningham said the carriers can file a complaint with the Federal Aviation Administration (FAA) over their concerns and have the federal agency reach a resolution. Allen said the carriers haven’t taken that step with another airport over a similar issue. Board member Stan Green said XNA has spent $550,000 in legal fees because of the issue over the past five years, and it’s not going away. He also said XNA isn’t overcharging carriers but likely undercharging.

Board chairman Art Formanek said what the carriers have presented isn’t new, and board members explained how passengers have complained about the high fares, leading passengers to other airports, such as Tulsa International Airport. Allen said similar airports of XNA’s size in the East and Northeast have experienced the same issues being in close proximity to larger airports.

Board member Philip Taldo said he uses an app that shows air fares. And it showed an American Airlines flight from XNA to Washington, D.C., was $341, while a flight from Tulsa to Washington, D.C., with low-cost carrier Frontier Airlines was $72.

The fares American Airlines charges are based on what the market will bear, Allen said. “If Walmart and some of the other large companies here weren’t buying our fares, we’d be lowering the fares,” he said. “It’s the marketplace. It’s a capital marketplace.” He also encouraged the airport to attract other carriers to XNA, saying there were incentives available to do so.

Allen said those who use Allegiant are passengers who travel mostly for leisure, taking their money and spending it in other cities, while carriers, such as American Airlines, are bringing passengers to spend their money in Northwest Arkansas. He said the carrier’s economic impact on the area is about $360 million.

On Feb. 14, XNA approved changing its rates for the B gate, basing rates on aircraft size. A widebody costs $157.43 per turn; a narrow body, which Allegiant uses, costs $78.72 per turn; and a regional jet, which United uses costs $39.36. The change increased Allegiant’s rate by $34.83 per turn but decreased United’s rate by $4.53 per turn.

On Dec. 19, airport staff agreed to look at changing its rates in a meeting with American Airline and United, Airlines 4 American and their attorneys. After the meeting, staff met with Delta and Allegiant for feedback on the change, and they accepted it. With the change the airport’s cost per enplanement declined to $5.90, from $7.57 in 2017. The change went into effect March 1.

Between January and February, enplanements, or the number of outbound passengers, have risen 3.02% to 102,148, from the same period in 2017.

PARKING DECK TOUR
After the meeting, members of the airport board and XNA staff took their first tour of the four-story parking deck under construction, with project executive Jeff Gattis of Nabholz leading the tour.

In mid-January 2017, Nabholz started construction on the parking deck. The first floor of the $35 million deck is expected to be used for rental car companies, while the top three floors will have 1,153 parking spaces for passengers and visitors. The parking deck is on track to be completed in August and will have a total of 1,489 parking spaces.

Nearly 22,000 cubic yards of concrete was used to build the parking deck structure, Gattis said.