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VOL. 129 | NO. 4 | Tuesday, January 07, 2014

Airport Authority CEO Sees Growth in New Reality

By Bill Dries

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Memphis International Airport is making the transition from an airport with a majority of connecting flights, 90 nonstop destinations, higher fares and less competition to one with more origin and destination traffic, 30 to 35 nonstop destinations and lower fares.

BROCKMAN

Scott Brockman, the new president and CEO of the Memphis-Shelby County Airport Authority, says the new model for the airport is more stable than its decades as a hub for Republic Airways, Northwest Airlines and Delta Air Lines.

“We’re generating our flight base on what Memphis business and Memphis leisure travelers are looking to fly. It’s a much more stable flight model for the future,” Brockman said on the WKNO-TV program “Behind the Headlines.” “The new reality is you will connect (elsewhere). The benefit is you will get lower fares – less convenience but lower fares.”

The program, hosted by Eric Barnes, publisher of The Daily News, can be seen on The Daily News Video page, video.memphisdailynews.com.

Even before Delta Air Lines dehubbed Memphis in 2013, the airline’s flight cuts changed Memphis International from an airport where 55 percent to 75 percent of the passengers were making a connecting flight to one where 75 percent of the passengers are “origin and destination” travelers. In other words, they are leaving or coming to Memphis.

“What I would expect is the O&D to continue to rise as a percentage, not because there’s a tremendous change in transfer passenger availability. It’s that we’re going to grow the market,” Brockman said. “Currently the O&D market is a challenge because of airfares. So, we don’t truly know what the demand of the O&D market is. It’s been disincentivized, if you will, by high airfares.”

Origin and destination traffic has increased since Southwest Airlines began service at Memphis International Airport in late 2013. Brockman, who began his tenure as head of the airport authority Jan. 3, the day after longtime airport authority president and CEO Larry Cox retired, cites a 20 percent increase in Southwest’s first month at Memphis International.

But there are some adjustments to the new reality of an airport built on domestic discount air carriers.

The airport authority is developing a better website for travelers who now have to do more than check with a hub carrier to see what flights are available.

“The new carriers … you can only book through their website. You can’t book through Expedia. … You need to know how to get there,” Brockman said as he talked of an online flight guide on the airport’s website that is still being developed.

“You pick the destination, it tells you all the airlines and the flight times,” he said. “We’ll get there. We’re not there yet. … When we get there, you then will find the flight you want to take and research backwards to the airline.”

Also being developed is a terminal utilization study that clusters gates better for passengers. The airport now needs about 30 gates compared to 79 needed before Delta dehubbed Memphis.

“What we’re studying is the efficiency and cost savings of putting everybody in one area,” he said.

Brockman expects Memphis International will retain most, if not all, of its flight service to Washington’s Reagan National Airport in the aftermath of the US Airways-American Airlines merger approved last year by the U.S. Justice Department.

US Airways’ service between Memphis and Reagan National began last year with three daily flights. That is now up to four.

But the newly merged airline is giving up several dozen slots at Reagan National as part of the agreement with the Justice Department. And Delta executives have said they want the slots even though the Justice Department specified the slots were to go to “low-cost carriers.”

Asked about restoring international air service at Memphis International, Brockman said the effort will involve building such service through charter flights.

“What we have to do is build that service,” he said. “With an O&D model, now we have to build a different process.”

Watch Brockman's "Behind the Headlines" interview: http://bit.ly/1bLIDWd

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