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VOL. 127 | NO. 161 | Friday, August 17, 2012

Mayors Taking MEM Concerns to Nashville

By Bill Dries

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When Memphis Mayor A C Wharton Jr. and Shelby County Mayor Mark Luttrell are in Nashville Monday, Aug. 20, to meet with Gov. Bill Haslam one or both of them will probably also discuss possible incentives for Memphis International Airport.

Both mayors talked guardedly about the still-forming effort Friday, Aug. 16, at the monthly meeting of the Memphis-Shelby County Airport Authority board of commissioners.

The meeting with Haslam had already been scheduled by Wharton on other topics.

They also told the board that city and county government, as well as economic development officials, may have more flexibility than the board in pushing such incentives and aiming them at particular airlines.

“At this early stage we have no list of here’s what we need,” Wharton said. “We want to make sure everybody is acutely aware of what we’re facing. There may be some role for the state to play. I have no idea what that might be. I simply want to alert the governor that we are going through this process.”

Wharton has put his Innovation Delivery Team leader Doug McGowen on the project. McGowen’s involvement is independent of his work with the team.

The still forming effort is an indication Wharton and Luttrell are pursuing a parallel track economic development strategy. The other track is incentives the airport authority is still offering as another solution to the airport’s declining service but higher fares from Delta Air Lines Inc.

August is the one-year mark for a 20 percent cut in Delta service at Memphis, where the Atlanta-based airline operates one of its seven U.S. hubs. Next month marks the beginning of a new round of service cuts. Both rounds are permanent capacity cuts by Delta.

Luttrell added he and Wharton are enlisting the city’s corporate leaders in the effort.

“What we have seen is that in communities, businesses can have an impact,” Luttrell said. “Panama City, Fla., got Southwest (Airlines) and they did it through some unique opportunities that the business community was actively engaged in.”

At a recent meeting with corporate leaders, Wharton said International Paper CEO John Faraci emphasized how important the issue is to his company. FedEx was also represented by the company’s general counsel, Christine Richards.

Faraci has been vocal about the impact high airfares out of and into Memphis International are having on business travel by International Paper executives.

Wharton and Luttrell declined to name other Memphis-based companies represented at the gathering.

“Our businesses do have options,” Wharton said. “They can relocate and this is why they have to be a heavy participatory voice in this and we are relying on them.”

Haslam has been asked in the past about state incentives for airlines to add service or come to a Tennessee airport before.

“I think it does impact our economic development when it costs folks a lot to fly in or out of our cities,” he said in June. “The impact of a low-cost airline is huge. But the amount of subsidy they need to be in a market quite frankly makes it impractical for the state to be subsidizing that if they don’t think it is worth it themselves.”

Wharton and Luttrell are enlisting business leaders to convince airlines – Delta and otherwise – that it is worth it to come to Memphis for new or expanded service. Wharton said that may not necessarily involve more flights.

“It’s not always the number of flights you have. It’s, ‘Do you have them at the right time?’ An 11 a.m. flight is like having no flight at all,” he said.

Memphis International Airport had 184 scheduled daily flights in July, down 17.8 percent from July 2011 when the airport had 224 scheduled flights.

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