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VOL. 127 | NO. 141 | Friday, July 20, 2012

MEM Reports 18.1 Pct. Drop in Passengers

By Bill Dries

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Memphis International Airport saw an 18.1 percent drop in passengers for the fiscal year that ended June 30.

The total number of passengers for the fiscal year was 7.8 million compared to 9.6 million for the previous fiscal year.

But the airport finished the fiscal year more than $4 million ahead of expenses according to year-end figures the Memphis-Shelby County Airport Authority reviewed at its Thursday, July 19, meeting.

Airport officials attributed the revenue bump to an increase in landed cargo weight for Memphis-based FedEx Corp. during the fiscal year.

At the meeting the airport also amended the terms of its air service development program, a set of incentives designed to get competing air service into the airport as Delta Air Lines Inc., which has a hub at Memphis International, continues to cut its air service here.

Delta began major cuts in its Memphis service in August 2011 with more cuts scheduled for next month.

The amendment to the incentives now allows non-signatory airlines, or airlines that do not have a use and lease agreement with the airport.

Barney Parrella, executive vice president of InterVISTAS Consulting Group, which is working with the Airport Authority on the incentives and new air service, detailed a series of meetings airport officials have had or will have with air carriers from United and Southwest to JetBlue to Iceland Air and Air Berlin.

He described the talks generally as “promising and fruitful.”

“Aviation fuel prices have come down but they are still historically high,” Parrella said in describing the general state of commercial passenger air service. “There are airlines that are consolidating, integrating and in those kinds of situations they are not quite sure how and where they want to expand their services. … They are being very risk averse.”

The airlines aren’t adding capacity overall as much as they are shifting it, he added.

“They are reluctant to put capacity into markets where they are not quite sure how it is going to work out,” Parrella said. “They are very interested in the competitive environment. If they come here, will they be able to be sustainable? … The airlines are really not interested anymore in coming in and testing the market – dipping their toe in the water.”

Airport officials also announced the closing of the Regency Inn and Suites, the motel north of the terminal on airport property that has been open under various brand names for nearly 40 years.

The airport plans to demolish the hotel and use the space for a cell phone parking lot – a place for passengers to park with restrooms and a board of flight times and arrivals they can see while they catch up on phone calls before entering the terminal building itself.

The airport had plans for such a lot on property south of the terminal but will now shift it to the hotel footprint north of the terminal.

John Greaud, vice president of operations for the airport, noted the hotel was built before FedEx began its bank of nighttime flights. The noise from those flights has been a problem for hotel operators. The hotel was not built with the acoustic measures that would mitigate to some degree the night noise levels.

Airport Authority president Larry Cox said changes in the way airlines move their crews and their overnight arrangements also played a role in the decline of the hotel property.

Memphis International Airport had 183 scheduled daily flights in June, down 20 percent from June of 2011 when the airport had 229 scheduled flights. Those flights carried 643,687 passengers for the month compared to 789,039 in June of 2011, an 18.4 percent decrease.

The airport handled 747.1 million pounds of cargo in June, a 3 percent increase from a year ago.

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