Skybus

Website has been redone and includes the cities being service including Boston to Columbus.

Skybridge

This blog commented on this on February 20th, check the archives. Good to see that the City Manager has decided not to pursue it at this time, note the article in today's paper, since tax levy monies would have to be used if not enough net "new" tax were created in the "DCU Special District Finance Zone" potentially adding to the existing deficit.

Council Order

Although I like the order 8D) filed by Councilor Irish, it is about 2 1/2 years to late. We simply do not have the time over the next two months to get this done. It is bad enough the airport costs over 90,252 per month right now, but if we take on 100% of the burden (lose MassPort subsidy) on July 1st the cost increases to 163,681 per month based on the numbers the first 9 months of this fiscal year.

	8d.	Request that, in addition to MassPort, the City Manager immediately seek discussions with investment banks and private equity firms on the possible sale of the Worcester Regional Airport. (Irish)

Just a reminder, we have been recommending this for the past two years on the website and filed a request with the airport commission asking the same thing. If we had started this process then we could have done it with the MassPort subsidy, but seriously how can we do it now with two months left and a 21,000,000 budget deficit.

More importantly the order should be changed to include airport management companies like National Express, who are in the process of selling Stewart back to the Port Authority of NY and NJ, airport authorities that run Bradley/Manchester/Providence and discount airlines like JetBlue and SouthWest amongst others. It is absolutely ridiculous that we are only in discussions with one entity (MassPort). Although they in the end may be the best option, their is a fiduciary responsibility to the tax-payers to test the marketplace.

Airport Numbers

9 months into this fiscal year, here are the numbers ending March 31, 2007:

Revenues
Airfield 115,151
Airfield Support 225,680
Terminal 162,815
Misc 136,291

Total Revenues 639,937

Expenditures
Salaries 629,303
Maintenance 720,361
Capital 3,669
Debt Service 486,776
Fringe 272,961

Total Expenditures 2,113,070

Net Loss 1,473,133

Since the debt service is 486,776, the operating deficit is 986,357. Per the current agreement, MassPort pays 67% (660,859) and Worcester pays the balance or 325,498. If you add debt service and our portion of the operating debt, that equates to 812,274 over 9 months or 90,252 per month or 20,827 per week.

Information Request Update

At the beginning of March in light of Sunshine Week, note my March 11th blog, I e-mailed and mailed our airport liaison two requests:

1. Copy of the two packages that IMG prepared for the two airlines that were interested in ORH mentioned in the monthly Economic Development Report for months.
   
2. All copies of quarterly reports filed with the Department of Transportation (DOT) regarding monies spend on the Small Community Air Service Grant.

Since that time I explained that if either of the two packages that I received included airlines that we had on-going negotiations with, I would not publish them. I stand by that. To date, however (beyond the 10 day limit required under the Public Open Meeting Laws), I have received neither of these two packages.

In addition, I have not received all copies of the quarterly reports regarding the expenditures of the Small Community Air Service Grant. A letter or e-mail maybe explaining why either of these requests would have seemed appropriate and appreciated. Instead nothing???

Although I have followed up with at least 5 e-mails to our airport liaison regarding this request, I have received no response via the internet or the mail in regards to either of these requests. Today I will mail another letter. Any other suggestions or comments.

City Manager O'Brien & WCCA

WCCA's Maura DePasquale it taping an interview with City Manager O'Brien for his "Soapbox" show. I urge readers of this blog to submit any questions that they may have by hitting this link.

I asked a question reading the upcoming agreement with MassPort. Since I am assuming MassPort will pay 100% of the operating deficit, will they also pay the debt service (approximately 600,000 per year). At the end of the new agreement or maybe during the agreement, again I assume MassPort will have an option to buy ORH. How is this amount being determined?

City Manager On Radio

I heard the City Manager on WTAG this morning. He indicated, as he said before, that the City of Worcester does not belong in the airport business and that he would be in negotiations with MassPort.

From he said it sounded to me that we can expect a long-term lease with an option to take title to ORH. MassPort will be paying 100% of the operating deficit, but will they pay the debt service (600K per year)? Again please note the City Manager did not give these details, but this is how I translated his comments.

Lastly he also mentioned that we were in discussions with a couple commercial airlines.

Gary International Airport

They have achieved primary airport status with SkyValue from the Post-Tribune. Gary Airport, Rockford and Stewart are all secondary airport close to major Metropolitan cities that are starting to achieve a level of success.

Here is a small part of the story:

We have many reasons to cheerlead for the success of SkyValue USA, the Gary/Chicago International Airport's lone commercial passenger airline that began providing passenger service in December. Since then, more than 10,000 passengers have flown to Florida, Arizona and Las Vegas. The Florida-based airline recently announced it will expand service from Gary to Los Angeles.

Sorry-Rockford Again

Read this story in the East Valley Tribune. Good story about SkyValue and Vision, two airlines that were in a similar position as Allegiant three or four years ago. Although these two airlines would have a tough time considering ORH now, we should be in touch with them so as they grow ORH is on their map.

The thing I want to call your attention to is the upfrontness of Airport Director O'Brien at Rockford:

"Williams also is on the short list for service from Rockford, Ill., said Bob O’Brien, executive director of Rockford International Airport. Rockford, which sits nearly equidistant from Chicago and Milwaukee, plans to initiate air service this summer to three new locations, O’Brien said. Mesa is one of seven targeted destinations, he said. He expects to narrow the list to the three for-sure sites within a month."

Stewart International

Story from the Daily Freeman. Rockford and Stewart, secondary airports similar to ORH are doubling and tripling their passenger counts, while we have no passenger service.

Airline passengers triple at Stewart International

By Hank Gross, Correspondent

04/18/2007

For the third month in a row, the number of airline passengers coming through Stewart International Airport at Newburgh has escalated In March, the number of travelers more than tripled from the same month last year, reflecting the same trend as in February. In January, the increase fell short of tripling, but was nevertheless significant.A total of 82,783 people flew into or out of Stewart in March, compared with 25,459 during the same month last year. The March 2007 figure is 14,000 more than the February passenger coun

Philly Update

Story from Philly.com. Interesting thing here is how the airport is a topic of discussion and more interesting how about a 10 year tax abatement for new construction. Now that is the type of things I would like to hear more in the city 1) discussion on the airport and 2) 10 year tax abatement on new construction.

Rivals trade jabs over airport

Fattah favors leasing PHL; Knox scoffs & declines a wager

By BOB WARNER

warnerb@phillynews.com 215-854-5885

Stung by criticism of his plan to lease Philadelphia International Airport to private investors, U.S. Rep. Chaka Fattah challenged mayoral rival Tom Knox yesterday to put his money where his mouth was - a $1 million bet on whether Fattah could pull off the deal.

Knox blinked.

The wealthy businessman, who has estimated his net worth at $100 million, turned down the wager but took a shot at Fattah's finances.

"You know, Chaka, I have a million," Knox said.

The exchange took place at the elegant Four Seasons Hotel, at a forum sponsored by the Central Philadelphia Development Corp. The audience of 100 included some of the city's top businesspeople.

Moderator Paul R. Levy, executive director of the Center City District, asked the three candidates participating - Fattah, Knox and Michael Nutter - whether they would continue the city's 10-year tax abatement on new construction.

Airport Privatization

Another great story from the Philadelphia Business Journal on airport privatization. Instead of searching for revenues streams that we have no control of like a local meals tax (unless there is legislative approval), casinos or taxing non-owner occupied as commercial, more emphasis should be placed on getting the best possible deal for ORH. It has become a major issue in the Philadelphia Mayoral race. Here is part of the story:

Can the airport be privatized?

Philadelphia Business Journal - April 13, 2007

by Athena D. Merritt

Staff Writer

In making the lease of Philadelphia International Airport a campaign issue, the five major candidates angling for the Democratic nomination for mayor are heading down a runway Chicago has already embarked upon.

If Chicago succeeds in leasing the Chicago Midway International Airport, the Philadelphia experiment will be grounded unless an act of Congress relaxes the rules on airport leases.

The national Airport Privatization Pilot Program limits the sale or lease of airports to five, including only one large hub. Legislative amendments are in Congress' hands now to expand the program from five to 15 airports and remove the restriction of one large hub airport. Congress will have to act, which is expected to happen before aviation taxes supporting the Federal Aviation Administration expire on Sept. 30, for the Philadelphia mayoral candidates' plans to succeed.

Candidates Tom Knox, former City Councilman Michael A. Nutter, U.S. Rep. Bob Brady and state Rep. Dwight Evans all said they were open to exploring privatization of the airport in interviews at the Philadelphia Business Journal, though they offered no specific plans for the use of such proceeds.

U.S. Rep. Chaka Fattah, also a candidate, has made an airport lease the centerpiece of his plan to tackle poverty -- estimating that a long-term deal would bring in more than $3 billion.

there is more to the story, click the link above to read more.....

76 Days

76 Days to the end of the current operating agreement.

Public Records Request & Skybus

To date I have received none of the information that I requested from our airport liaison nor have I received any correspondence in reference to them. On another avenue Skybus has become the first airline to utilize the exterior fuselage space available to advertisers.

This from the Businesswire.com:

COLUMBUS, Ohio--(BUSINESS WIRE)--Skybus Airlines and Nationwide today unveiled the airline’s first “branded” airplane. The Airbus A319 displays a large Nationwide logo and the tagline, “Nationwide is On Your Side,” on the exterior of its fuselage. “At Skybus, our goal is to provide outrageously low fares to our passengers – fares significantly lower than what Columbus passengers are currently experiencing,” said Bill Diffenderfer, Skybus CEO. “One of the ways we are able to do this is by offering both traditional and non-traditional marketing opportunities – like advertising on our planes. We’re excited and proud to partner with Nationwide, another Columbus-based, hometown company, on our first co-branded plane.”

Skybus is believed to be the only U.S.-based domestic carrier to currently make exterior fuselage space available to advertisers. Advertising opportunities are available on all Skybus planes as well as on the interior of the plane, allowing advertisers to create a complete “brand experience” for passengers. Nationwide will also place branded images inside the plane, including on the plane’s tray tables, overhead bins and restroom doors.

“This is another example of how innovation will help us cut through the clutter,” said Jim Lyski, Nationwide’s chief marketing officer. “We’re excited to be the first to demonstrate how this new medium can deliver our brand to consumers on a grand scale.” Nationwide has introduced a series of innovative marketing efforts in the past year, most notably, the most talked about ad from this year’s Super Bowl, featuring Kevin Federline.

Nationwide was one of several Columbus companies, including Huntington Banks, Battelle and Wolfe Enterprises, to provide initial investment dollars for Skybus. Local investment in Skybus also includes other local companies and individual investors.

Nationwide, based in Columbus, Ohio, is one of the largest diversified insurance and financial services organizations in the world, with more than $158 billion in assets. Nationwide ranks #98 on the Fortune 100 list. The company provides a full range of insurance and financial services, including auto, motorcycle, boat, homeowners, life, commercial insurance, administrative services, annuities, mortgages, mutual funds, pensions and long-term savings plans. For more information, visit www.nationwide.com.

Skybus Airlines, based in Columbus, Ohio, is the next generation of low-fare airlines. The airline expects to begin nonstop service to major U.S. markets from Port Columbus in spring 2007. For more information about Skybus, visit www.skybus.com, or for in-flight advertising opportunities, contact sales@skybus.com.

WoMag

Scott Zobach wrote a story regarding the risks of losing control of the airport via a long-term lease or outright sale. I could not agree more with him that when you lose control of an asset , you are not able to direct the day to day operations of that asset.

Whose fault is that? If we had an airport that was running close to break-even versus at an annual loss of $2,800,ooo, we would not have to give up control. Bottom line is that we had plenty of time to turn the airport around, but failed and have no choice but to turn it over to someone else.

This does not mean, however, we sell the airport for $1 and let MassPort do whatever they want. That is exactly why we urged the Airport Commission three years ago to put an RFP out for the entire airport containing the checks and balances, thus giving the City of Worcester some control while alleviating the financial stress. Instead we put out an RFP for 4.5 acre parcel that received no bids.

This is also exactly why we installed the the time clock on the blog (78 days to the end of the current agreement). We need to have whatever agreement with whomever in our hands for review as soon as possible to ensure that the terms of the agreement are worth giving up control of the airport.

March Airport Minutes

March Board Minutes . Couple comments:

1. Can we please let the Airport Director have the authority on his own to allow photo shoots.
2. Hangar 2 insulation. How many months has it been that this has not been repaired--5???
3. "Our Airport Director met a number of airlines and there was some potential interest in ORH." How many airlines, who, are we preparing packages for them with the help of IMG?
4. Final Master Plan will be done in June..
   
5. No mention at all regarding the future of airport when the current operating agreement ends July 1st.

City Council Meeting

I reviewed the City Council Minutes, in particular IMG:


Staff continues to work with IMG, aviation industry experts, on various airport-related issues, including operational strategies and the identification and marketing of the Airport to increase aviation activity. IMG continues to provide the City with the analysis of potential carriers and the creation of specific marketing packages and strategies for those identifies airlines. The City and Massport are focusing efforts on identifying and recruiting airlines that employ efficient aircraft and service popular destinations which were identified through the local and FAA conducted surveys of passenger preferences.


I have a few questions:

1. What happened to the two airlines packages, which I never received, by IMG to two prospective airlines?
2. How long has IMG been analyzing potential airlines, have they identified any airlines that meet the above critiria?
   
   

Please keep in mind that we have paid over 200,000 for the above answers.

Midway Airport Privatization

From ChicagoBusiness.com. Note the fact Chicago is not just going to talk to one bidder but "potential" bidders. Here is a small part.



Southwest Airlines Co. and other carriers are balking at Chicago's plan to lease Midway Airport to a private operator, putting the brakes on the high-profile deal and the billions it could bring to city coffers. Concerns raised about the plan have pushed back the timetable for requests for potential bidders, a process the city was hoping to begin last month so that a deal could close by the end of this year.

"The more we learn, the more questions arise," says Ron Ricks, executive vice-president for law, airports and public affairs at Southwest, Midway's dominant airline. Leasing Midway, which could fetch as much as $3 billion, is extremely important for Mayor Richard M. Daley, who hopes for a cash windfall to bolster the city's underfunded pension plans and to pay for infrastructure repairs and upkeep. The idea is similar to the agreement to lease the Chicago Skyway in late 2004, which reaped $1.8 billion.

City officials have tried to sell the airlines on the proposal by projecting cost savings over a 20-year period, presuming a private firm can run the airport more efficiently and pass those savings on to the carriers.

Allegiant March Traffic

Allegiant Air, which flies travelers from small cities to Las Vegas and other leisure destinations, said Thursday its March traffic rose 38.6 percent on a 37.1 percent capacity expansion.

The subsidiary of Allegiant Travel Co. said its monthly scheduled-service traffic rose to 268.1 million revenue passenger miles from 193.4 million. A revenue passenger mile is an industry unit measuring one paying passenger flown one mile.

Capacity grew to 307 million available seat miles from 223.9 million. Occupancy improved to 87.3 percent from 86.4 percent. Allegiant Travel shares rose 45 cents to close at $32.04 on the Nasdaq Stock Market.

Do I have to say it again, losing Allegiant hurt us bad. Not only the $1,000,000 from the FAA for 10,000 passengers, but it sent a message to other carriers. Believe me it is not accident that Skybus, who has kept Allegiant, is looking at Portsmouth and not ORH.

Linear Expands In DC

This from Aero-news.net setting up another base in Manassas:


Linear Air announced Monday the launch of service in the Washington DC-Baltimore area, the first of its kind. The company will base its operations in region at Virginia's Manassas Regional Airport.

Linear Air operates the nation's largest fleet of executive Cessna Grand Caravan turboprops, which offer the flexibility and convenience of private air travel at prices rivaling full coach airline fares. Since 2004, Linear Air has operated the Caravan, in anticipation of adding 30 Eclipse 500 VLJs.

Linear Air’s Washington DC-Baltimore base is at the Next Flight Aviation private terminal at the Manassas Regional Airport, located just 15 miles south of Washington Dulles International Airport -- but, the company notes, without the stress, hassle, crowds and lines.
"There is tremendous pent-up demand for more affordable and accessible short-hop private air service in the Washington, DC-Baltimore metropolitan area," said Ann Moseley, General Manager of Next Flight Aviation. "Linear Air’s Caravans fit this need perfectly."
Linear Air's Caravans are eight-passenger propjet turbine powered aircraft staffed by two pilots, featuring plush leather seats, luxury appointments and onboard complimentary catering.

“With our base at Manassas, we now offer contiguous service from New England all the way down to the Southeast,” said William Herp, President and CEO of Linear Air. “As we’ve grown from our first base in Boston to New York and now Washington DC-Baltimore, we’ve seen tremendous demand for our service among business travelers for day trips, as well as leisure travel to second homes and out of the way resorts like The Greenbrier."

Dayjets

Story from Avweb below. In Florida Dayjets is similar to Linear Air in Bedford. Do you remember Pogo Airlines a few years back that made a commitment to Westfield? They have gone nowhere. I hope we are in constant communications with William Herp at Linear Air, I strongly believe that the VLJ's like the ones from Eclipse that are going to Dayjets and Linear will be huge in the aviaition business.

Bolstered by a $50 million infusion of new funding, DayJet said this week it expects to start offering air-taxi jet service in five Florida cities by the end of June. “This funding is the keystone to the operational launch of our ‘Per-Seat, On-Demand’ jet service,” said Ed Iacobucci, president and CEO of DayJet. “With the necessary capital now in place, we are just months away from delivering regional business travelers something they have never had -- accessible and affordable mobility between difficult-to-reach regional destinations.” The infusion of cash means that construction of DayJet's facilities at Tallahassee Regional Airport's Flightline Aviation will begin within the next 30 days, the Tallahassee Democrat reported Wednesday. The on-demand, per-seat operator’s reservation system will be online within the next 30 days, and DayJet’s fleet of Eclipse 500 jets should start arriving about that same time, according to company COO John Staten.

JetBlue

Had a chance to get away to enjoy some nice weather in Boca Raton, sorry about the lack of posts. My flight back from Fort Lauderdale was delayed for three hours this morning, turns out the Airbus A320 that was suppose to fly out first thing this morning hit a bird landing night and "birds do a lot more damage then people realize."

Waiting around 3 hours was not fun, but JetBlue gave everyone $50 refund for the delay, free movies (besides the free Direct TV) and the plane itself is simply awesome.What really bothered me was watching the JetBlue plane load up for for one of their newest destinations, the privatized Stewart Interanational, which is currently being bought back by Port of New York and New Jersey from National Express for 88 million. What I also found incredible that this morning I was on one of three flights for Boston to Fort Lauderdale.

Just like the flight down, the leg room, the leather seats and the Direct TV (fee speaker phones) is the best and make the flight a breeze. Leaving Boston, the wait for the bags was not bad, but parking cost $88 for 4 days and the drive home was brutal. There is a market here for JetBlue either with a code sharing agreement with Cape Air or, I still believe, a diversion of two of the ten Embraers from Boston to ORH. Are we talking to JetBlue or Cape Air?

• April 3rd posting from Cranky Flier indicates Skybus is looking at Portsmouth, NH. Thanks Matt. Are we talking to Skybus?
  
• South Florida is looking to improve large Section of Route 595. If the government does it themselves, it is projected the costs and time will be too high. As a result they are considering a sale of this section to a private party, who will then install tolls. Great story in the Sun Sentinel.

MassPort

Little late today on the posting, I had to catch an early flight from Boston today to Fort Lauderdale on JetBlue. First time on JetBlue, it really is pretty awesome. Airbus A320 (I think those were the numbers), plenty of leg room, great leather comfortable seats and Direct TV. Just had a chance to read the paper today inluding this story by Bob Nemeth. Now it looks like there may no be enough time to wrap up negotiations over the next 90 days, and we may "simply be extending the current operating agreement, with specific steps leading to the transfer"". I particularly like the title "The Clock is Ticking", wonder if he was refering to my countdown here on the blog which by the way says 90 days today.

What really bothers me in this story is that the reason for ORH's failure is blamed on us, the City of Worcester, for not supporting an East-West connector, in other words access road. Although I agree that an access road would have helped market the airport, it was management at ORH that has caused the consistent steady increasing losses at ORH with no passenger service. Look no further then Rockford, who has no access road but is succeeding faciing the same exact obstacles as ORH. Although MassPort has been a great help and should be thanked, we (tax-payers of Worcester) should also be thanked for the financial support (!,800,000 alone this year) as well and not be blamed for an access road that was not installed.

As far as the statement "there is no long line of suitors banging on the door", how can he say that? If you do not put a "FOR SALE" sign on your house, do you think people walk up and knock on your door with offers? All you need to do is look at Stewart, Tacoma Narrows and the recent mention of a Spanish company wanting Mitchell Airport in Milwaukee. Instead we are suppose to take IMG's word in their $100,000 report that there are no suitors, the same consultant we have paid over $200,000 to recruit and retain an airline with no success.

Good to see, however, that the writer of this story mentions he has sat on the Airport Commission Board the last 8 years. Each year of which has seen the operating deficit increase.