Aid Not Enough to Keep Delta Flying from Tallahassee to Central Florida
A guarantee of up to $1.5 million from the state of Florida and its capital city is not enough to keep one of Tallahassee’s biggest airlines flying from the city’s regional airport to Tampa and Orlando.
The state and city agreed last year to guarantee the airline up to $1.5 million in losses it said it would incur if it continued to fly non-stop from Tallahassee to central Florida instead of having capital passengers change planes in Atlanta. But this coming Thursday the airline will again clip the wings on the flights. The deal, reached after Delta said it would need to make $11.5 million on fares from the flights for them to profitable, will still be enforced despite the flights being grounded, though airport assistant director Philip Inglese said the bill will not be the full amount.
“At the end of the agreement next March, we’ll look and see what is owed,” he said. “It will probably be a few hundred thousand dollars.”
Inglese added that plan was never for the city and state to fully subsidize the Tallahassee to Tampa and Orlando routes, but instead for the governments to play a small role in making them feasible.
“This was an experiment to see if Delta, which pulled their regional jets, could make these routes profitable with turboprops,” he said. “The object of this what not to subsidize these routes, it was to see if there were viable load factors. They just weren’t there, so it was a matter of terminating the deal.”
Inglese stressed that Delta will continue flying to Fort Lauderdale and Atlanta from the Tallahassee airport, which averages between 720,000 and 750,000 passengers per year, and that another airline that services the capital, Continental Airlines, will continue flying to Tampa and Orlando. However, he conceded that the forecast might be cloudy for future deals between city and state officials and airlines which are wary of operating flights to Tallahassee’s small airport, agreements which he said have been common for mid-size airports.
“I have no idea (how it might affect future negotiations with airlines),” he said. “It’s a matter of seeing if it’s viable. Communities all over are doing this because airlines are generally risk averse.”
A similar 2001 deal with AirTran Airways to fly from Tallahassee to Atlanta, Miami and Tampa worth $3.6 million in subsidies and advertising was not extended in 2004, but Inglese said that outcome did not make officials less inclined to pursue the current deal with Delta.
“I think the community partners said anything that would increase service was worth a try,” he said, adding that the circumstances for the airline industry in 2004 were much different than they are now. “The difference is then AirTran was trying to compete with Delta. Now Delta is competing with the economy. Airports all over are in contraction.”
Delta officials in Atlanta did not immediately respond to requests Monday afternoon for comment, but a Tallahassee state representative who has been outspoken about wanting more intra-state flights to and from the capital told the News Service that there may be more effective ways to convince airlines to bring them here.
“In this economy, it might be difficult to come up with money to pay out like that when the money could go to other areas,” Rep. Michelle Rehwinkel Vasilinda said in a phone interview. “The problem is that these increases in airline service only last as long as the payout is there. In this case, it didn’t even last that long.”
Vasilinda, D-Tallahassee, has proposed instead ending the 6.9 cents per gallon fuel tax on flights to Tallahassee, a plan which ran out of gas last year when local officials and the Department of Transportation said it might negatively impact Tallahassee's ability to contribute to a state aviation grant pool - as well as the amount of money the city can take out of the pool. The proposal, if enacted, could save airlines about $64,000 per year.
But Vasilinda, who has sought to assuage fears about the gas tax exemption this year and is considering reintroducing the plan again next year, said it might be a more effective way to lure airlines to Tallahassee – and cost less if they don’t come or stay long.
“My idea is to have something they can work into their prices because some of the ways airlines do pricing are pretty Byzantine,” she said. “Maybe it will work, maybe it won’t. If they don’t take advantage of it, there’s no cost.”
Vasilinda said she had not decided yet if the gas tax exemption will be among the six bills she will file next year, but she said Delta’s decision to end its Tampa and Orlando flights made a 2010 takeoff for the measure more likely.
“This took me a step further toward it,” she said. “It’s one more thing on the plus side, unless I hear something terribly negative about it.”
She added that the skies may be friendlier for the proposal this year, saying “people have gotten their minds around the fact that maybe these deals won’t be there anymore, so they are looking for alternative ways we can help the airport.”