by Marty Cook
Posted 4/14/2014 12:00 am
Updated 8 months ago
Wooing airlines is harder than it looks.
In the past two years, Scott Van Laningham, the executive director of the Northwest Arkansas Regional Airport, has been meeting with any airline that will listen to his pitch. XNA is eager to bring in a low-cost airline (or two) in an effort to bring down airfares.
“We’re talking to everyone,” Van Laningham said. “We’re not using a rifle approach; we’re using a shotgun approach.”
One of fliers’ biggest complaints about XNA is the price of fares. Lowering fares isn’t a simple fix and will clearly not happen overnight.
Van Laningham said ticket prices at XNA are fliers’ biggest complaint because they are about $100 more than the national average, in large part because of a lack of competition. But after two years of meetings, Van Laningham doesn’t seem to be much nearer to closing a deal.
“Until you nail down a deal, I’ve learned to stay away from optimistic predictions,” Van Laningham said. “If we could get to Chicago, Atlanta and Dallas with daily low-cost flights, we would be very pleased.”
Van Laningham said it is a complicated process to bring a new airline to XNA, which sees an average of 50 or so daily flights to and from 14 cities. The airport had almost 82,000 travelers in February.
“One of the challenges is we have excellent service,” Van Laningham said. “The airlines ask us, ‘Where is the gap we’re going to fill?’ The existing carriers are doing really good.”
For the prospective airline, then, it is a question of profit: Will the potential flights be full enough to make it worthwhile and will those flights fit into the airline’s existing web of destinations? Van Laningham said a consultant told XNA that it loses about 30 percent of its potential traffic because higher prices send travelers to other airports, but there is no telling how many would choose XNA — and any new airline — if lower fares were available.
The consultant told XNA that competition could drive the average fare down $100, about the same amount that currently separates it from the national average. “We are losing a substantial number of customers to other airports,” Van Laningham said.
XNA, not surprisingly considering the economic engines in the area, sees a lot of business travelers pass through its gates. Van Laningham said business travelers make up more than 60 percent of XNA traffic, and business travelers are often late bookers. Late bookings generally have higher fares.
Van Laningham said he routinely hears the example of a flight to Denver being $1,000 more expensive from XNA than it is from Tulsa, so travelers will drive the 90 or so minutes to take the significantly cheaper flight out of Tulsa. Van Laningham said a traveler told him that he and two colleagues decided to carpool to Dallas for a business trip rather than pay the hefty airfares they would have had to pay.
For the airport, it’s a juggling game that calls for tact. The federal government allows XNA to offer a limited number of incentives to recruit airlines, but the airport doesn’t want to rub any current air carriers the wrong way.
Van Laningham said those incentives would probably consist of a waiver of the landing fees for the first year or two of any new airline’s operations at XNA. Otherwise, XNA can’t show favoritism toward any carrier at its airport.
Van Laningham said XNA’s status as a heavy business-travel airport actually complicates his ability to attract other airlines. Business travelers are frequent travelers and that means they build up frequent-flier miles.
A business traveler who has built up hundreds of thousands of miles on American Airlines, for example, will be understandably reluctant to start flying another airline and so start from scratch mile-wise — especially when American Airlines’ fares drop because of the competition. Van Laningham said he encourages businesses in northwest Arkansas to stress to their travelers the importance of doing just that if new carriers come to XNA.
“We’ve heard, ‘I’m a platinum on this carrier, and I’m going to stay,’” Van Laningham said.
XNA has prepared for the possibility of adding airlines. Recent expansion has enlarged the terminal and added gates and ticket counters.
Now it’s just a matter of convincing someone to come to northwest Arkansas to use them.