Will the Airport Ever Fly?

By Hannah Wallace December 31, 2003

Late October in Southwest Florida seems like the perfect time to fly. The sky is a deep, joyful blue with only a cloud or two wafting above. It's the sort of weather that calls you to travel to faraway places. But the Sarasota Bradenton International Airport was empty on one such morning. There were no cars leaving passengers off. No passengers at ticket counters, anxiously checking luggage tags and the clock. No whine from waiting jets. Only the roar of the waterfall, cascading from the atrium to the lobby, and the deep hum of air handlers keeping the air cool for bored ticket agents and food court workers.

"Sometimes, you think our airport isn't even open," says Adam Mirenda, who operates the Hilton Garden Inn across from the airport on U.S. 41.

This is not what thousands of Manatee and Sarasota residents expected when they celebrated the grand opening of the newly renovated airport in 1989. The airport had just undergone a $60-million makeover, turning it from a tiny, almost Third World-like terminal where passengers had to walk on the tarmac to board planes (and planes actually turned around to pick up tardy passengers) to a gleaming, new facility with jetways, boutique shops and huge aquariums filled with tropical fish. The airport is still beautiful; but today, just about everyone in Sarasota and Manatee gripes about how underutilized it is, worried that it will be reduced to a general aviation airport for people with private planes or the occasional charter flight.

Their worries are not unfounded. These are bad times for the aviation industry; smaller airports, especially, are suffering. Naples Airport lost all major carrier service last year. Daytona Beach's and Gainesville's airports, even though they both won coveted small airport federal grants to help attract a discount airline, have experienced significant decreases in commercial traffic.

The airline industry was struggling for a decade, says Michael Boyd, a Denver-based aviation industry analyst who has consulted for the Sarasota Bradenton airport. Then came 9/11, the added costs of airport security, the war in Iraq and the SARS epidemic. Passenger traffic plunged just as airlines' costs spiked. And as costs go up, airlines shrink and head to bigger markets. The Sarasota Bradenton airport is particularly vulnerable because it's in the shadow of Tampa International Airport, only an hour away. And because 76 percent of SRQ's passengers are leisure travelers as opposed to business travelers, they usually fly at discounted rates. Many are frequent flyers, which means they're flying for free. Those factors do not attract the major airlines.

Fred Piccolo, the president and CEO of the Sarasota Bradenton airport, says 66 percent of our passengers go to Tampa. "When they built this airport in the late 80s," he says, "the airport was growing tremendously. The master plan said we would be up to three million passengers by now. They weren't wrong, but the other 1.6 million of them are going to Tampa." It's the 7-Eleven-Publix dilemma, he explains. When passengers want convenience, even if it costs a bit more, they'll use SRQ. If they want better prices and a greater choice in carriers and flights, they'll head to Tampa, even if it's a hassle to get there.

The numbers tell the story: In 1990, shortly after the new terminal opened, there were 2,010,304 passengers; in 1998, 1,545,797; and in 2002, only 1,118,886. As of September 2003, the 12-month passenger count of the major airlines declined 6.53 percent from the count the previous September. Since the mid-90s, SRQ has lost three major carriers. This year, it's facing up to a $2-million shortfall in operating revenues. The Sarasota Manatee Airport Authority, the governing body of six people from both counties appointed by the governor, is either going to have to dip into the airport's reserves or, more painfully, cut staff and delay projects such as taxiway and hangar development.

And yet, it's not a hopeless situation. Boyd says the Sarasota Bradenton airport is holding its own during a difficult period. Instead of blaming the airport and its management, he says, maybe locals just need to manage their own expectations. "People complain, 'Oh, my heavens, we don't have a direct flight.' Well, we don't have a lot of airlines out there, and they're not expanding," he says. "You can't just go out and get an airline. That's stupid." Promoting the area to the airlines, he adds, is not the problem: "The airlines are aware of Sarasota." Boyd adds that SRQ serves one-million-plus passengers. "That's a good-size airport. You've added flights. You've built a good airport that can handle anything coming down. Your airport is bringing in tens of millions of dollars. It's stable."

Even more surprising to locals may be Boyd's prediction: "SRQ is as small as it's ever going to get."

Locals have heard overly optimistic forecasts before. But Boyd argues that SRQ will eventually approach Fort Myers' Southwest Florida International Airport's five million annual passengers. Southwest Florida is growing, he explains. And that means traffic is growing, too, including along the interstate to Tampa. As soon as it becomes more convenient to fly out of the terminal on the Sarasota-Manatee county line, people will shift their travel patterns. It's only a matter of time, he says. It's the same sort of shift that happened in San Francisco, where passengers began to head to Oakland Airport because it was less congested. It's happened in Miami, as well, as passengers started using Fort Lauderdale's and West Palm Beach's airport.

When will this happen? Piccolo, who also sees the inevitability of congestion, can't predict: "Six months, six years, 16 years?" Manatee County businessman Paul Sharff, a commissioner on the airport authority, says Sarasota and Manatee's Metropolitan Planning Organization has studied growth and transportation. In the next five to six years, the estimated driving time to Tampa from Sarasota and Bradenton will increase by 30 minutes. "You can almost see it coming," he says.

The challenge, then, is short-term fiscal health. The airport receives no tax funding, a fact many residents in Manatee and Sarasota counties don't realize. Yes, SRQ passengers pay a surcharge on their tickets, just like they would at every other airport in the country. But SRQ's expansions and improvements-$33 million in the last three years-have all been funded through grants and the airport's own businesses. The airport's expansion of its general aviation capabilities and other money-making ventures is bringing in almost $1.75 million in revenue a year. (See sidebars.) "We haven't borrowed a dime," Piccolo says.

For now, Piccolo and the airport authority are trying to attract a low-cost carrier like Southwest or JetBlue, and they've earmarked a million dollars as an incentive for the carrier to come. The competition is stiff. Everyone wants a discount airline, but, like the major airlines, the discounters head to the larger markets. Southwest, for example, is only in 56 cities; the major airlines service hundreds.

SRQ executives enjoyed a glow of optimism late last year from some shorter-term gains-the airport has 36 more flights per week than a year ago and offers five new destinations that were not offered last year. Continental Airlines added two destinations, Houston and Cleveland. Delta Air Lines put on an extra flight each to Cincinnati and Atlanta. Northwest Airlines has added flights to Minneapolis for the winter. Charter carrier CanJet began weekly non-stop service to and from Toronto and Ottawa.

That service marked a return of charter flights to SRQ where, like most of the nation, charter traffic fizzled after 9/11. Also, CanJet's service is of special interest at SRQ because before 9/11, the airport served 30,000 Canadians passengers yearly.

The four carriers' new commitments signal to Piccolo, a 33-year veteran of airport management who earns the industry average of $150,000 annually, the "slow and steady growth" that the airline industry sees as its route to recovery from the devastating impact of 9/11. The industry projects that it will be 2005 or 2006 before activity approximates that of 2000, which was the best air-travel year ever-although that wasn't the case for SRQ, where passenger counts continued to slip. Already, the Fort Myers' airport has passed its pre-9/11 passenger levels.

In the meantime, Piccolo says even if people only "pick up Aunt Martha only once this year" at the Sarasota Bradenton airport, it's made their life easier at no cost to them. [The airport] "is worth it," he says. "You get all that for free." In Piccolo's mind, we're lucky to have both 7-Eleven and Publix to choose from.

Airport commissioner Sharff says, "You need to look to the future. The driving time is going to increase. The Skyway will be bumper to bumper." And when that happens, he says, locals will fly in and out of SRQ and most likely, they will complain again-this time, about how crowded and busy the airport has become.

Sidebar 1

SRQ by the Numbers

Annual budget: $16.5 million

Revenues from major airlines (includes landing fees, gate rental and counter rentals: $6.4 million

Revenues from airline-related activities (rental cars, parking lots concessionaires etc.): $8.4 million

Revenue from industrial ventures and general aviation: $1.75 million

Local economic impact: $958.6 million (source: 1997 Economic Impact Study)

Percent of passengers who are business travelers: 24

Number of passengers in 2002: 1.1 million

Number of passengers at Southwest Florida International Airport in 2002: 5.2 million

Number of passengers at Tampa International Airport in 2002: 15.5 million

Number of passengers at O'Hare International Airport in 2002: 32 million

Number of local tax dollars that subsidize the airport: 0

Number of government jurisdictions that include the airport: 3, Sarasota County, Manatee County and the City of Sarasota

Sidebar 2

621 words

Diversify, Diversify

SRQ's sideline businesses soar.

Every time a golfer tees off at Rip's Golf Center or a couple brings family antiques to University Self-Storage, it's good for the Sarasota Bradenton International Airport. Unbeknownst to many residents, an eclectic collection of down-to-earth businesses such as these pumps nearly $1 million a year into the airport at a time when its major air-carrier profile isn't exactly flying high.

The airport not only boasts the lighted golf course with driving range and self-storage business on its 1,100 acres, but the first phase of an industrial park, too. They all track back to a decision by the board of the Airport Authority in the late 1990s to diversify operations away from traditional dependence on major airlines and related, money-making services such as car rentals and parking lot fees.

The airport also makes more than $800,000 in revenue yearly from general aviation, which is aviation apart from major carriers. This includes income from fuel flowage fees (SRQ gets 5.5 cents per gallon sold), leases of two longtime fixed base operators and rentals of "T " hangars, which have grown from less than a dozen to 130 since the airport began building them in 1997.

The combined revenue from the industrial and general-aviation sides of the ledger totals $1.75-million, or more than 10 percent of the annual budget. "We've just about quadrupled the revenue from these areas over a five-year period," Piccolo says. In fiscal year 1997-98, the sectors brought in just $470,000.

Piccolo says the revenue helps during downturns and our dramatic seasonal swings. When there are fewer airline flights, SRQ collects less money in landing fees and gate and counter rents, as well as from its commissions for concessionaires' cocktails, snacks and polo shirts sold. Income from the on-site businesses has "kept us from raising our rates to airline carriers," Piccolo says. "It's kept us more stable."

SRQ isn't a rarity for having looked to other sources for some financial relief. Some small municipal and county airports throughout Florida have rental hangars and industrial parks. But golf courses and self-storage compounds aren't normally down the next airport road from them.

University Self-Storage was acquired for $300,000 from its original owner and turns a profit of $120,000 per year, Piccolo says. "It was a good fit," airport property manager Richard Rossi says of the 200-unit storage firm, whose employees were absorbed into the airport's 120-person payroll. The 18-acre golf course brings in $33,000 a year. Greens fees to play the three-hole, 1,000-yard course-popular in evenings due to its lights-are $10 in high season and $5 in low season.

The first phase of what's projected to grow one day to the 52-acre SRQ Aviation Parke of Commerce is partly developed with a 50,000-square-foot building and 5.5 acres leased for $400,000 to Honeywell Cabinet Management Systems and Service.

On the airfield side of the ledger, the airport is soundly grounded with rentals of the 130 T hangars, which cost pilots $365 or $500 monthly, depending on size. A waiting list numbers 130, Rossi says. He also has a list of 30 companies with interest in leasing land for hangars. The first corporate structure to be completed was the $700,000 hangar of Buchanan Aviation, part of automobile dealer Vern Buchanan's holdings. It's 10,000 square feet and houses his 2003 Hawker 800 XP and 1986 Lear 25B.

Airport officials are keen to expand the industrial and general-aviation sectors. "We want to make them grow," Piccolo says, though he doesn't foresee taking them to any pre-determined level. "We want to see an expansion of the industrial park, build more hangars, maybe add a maintenance facility" for a large airline, such as those located at Tampa International Airport.

- By Jill Maunder ([email protected])

Sidebar 3

834 words

Alternative Aviation

When a major carrier's not the flight of choice.

Once a month when business calls in Vero Beach, a team of advertising professionals from Sarasota's Clarke Advertising packs up and heads to the Sarasota Bradenton International Airport. But it's not to stand in line at a loading gate for a commercial airliner. Instead, the account executives and creative gurus walk straight to a twin-engine plane at Jones Aviation and take off for 50 to 60 minutes in the skies of central Florida.

"It's a great resource to have the airport here," agency founder Tim Clarke says. The costs of hotels and meals, on top of the lost office time to drive to Vero Beach and back, would exceed the expense of the charter; sometimes, he adds, as many as seven or eight staff members go on a trip.

Many executives, as well as wealthy individuals, apparently agree. Use of charters, privately owned planes, corporate aircraft and-the newest option aloft-fractional jet ownership has been on the upswing since the tragedies of September 11, 2001, as well as since cutbacks in major airline flights.

Principals of Jones Aviation Service and Dolphin Aviation, the two fixed-base operators (FBOs) at Sarasota-Bradenton International (SRQ), place the business-travel share of flights from their hangars at 60 percent. Executives' flights from each of the two FBOs, which lease space from the airport and own their hangars, can number up to 50 or 60 per day, depending on the weather and the season. For instance, during the legislative session, legislators, lobbyists and attorneys fly to and from Tallahassee.

Other common in-state destinations are Fort Lauderdale, Jacksonville and Orlando. A construction company frequently flies its executives to job sites around the state. Attorneys visit clients in other counties and bankers check on real estate investments in other regions.

We are able to operate on their schedule to locations not reachable via the airlines," says Gary W. Jones, vice president of Jones Aviation. Security and convenience are the primary reasons for the growing popularity of company aircraft and charters, some of which fly at speeds as fast as 600 miles per hour and reach Chicago in two hours, Denver in three.

"You know who's on the plane with you," says Ron Ciaravella, president of Dolphin, which leases many of its 75 hangars both to companies with their own planes and to businesses that offer theirs for charter.

Also, with a charter, "you can go to over 7,000 airports in the U.S., where there are only 500 air-carrier airports. The general-aviation airport is probably closer to where you do business, and there are no lines. You come and go as you please."

The newest concept on the tarmac for companies and individuals that can afford it is fractional jet ownership. JetShareU.S., based at Dolphin, has three jets (two Westwinds and one Learjet) and two King Air turbo-props into which a business or person buys as a shareholder. A $40,000 capital contribution is required up front from each shareholder, then a monthly contribution based on projected flight use, plus a monthly unit charge (reflecting the airplane selected for use). This is in contrast to renting planes, depending on size, for $400 to $4,000 per hour.

"We operate it like a corporate flight department," says co-founder Mike Jones, who did precisely that in Salt Lake City for 10 years. "It's your airplane. You get whatever amenities you want." Ground transportation and hotels at destinations also are arranged.

One audience that JetShare.S. targets as prospective members is that of retired executives who once "had airplanes at their disposal and now don't, and say, 'the thing I miss most is the company jet,' " Jones says.

Perhaps the greatest advantage of using a fractionally owned or chartered aircraft is the time savings. In fact, the delays now seen as customary for airline passengers at tickets counters and security checkpoints have inadvertently helped the charter industry, says Jim Hausch, president of Rectrix Aviation, which leases its space from Dolphin.

For travelers flying on Rectrix's $24-million Challenger and $12-million Learjet (CQ), which rent at $4,600 and $2,700 per hour, respectively, there are no long lines. "We prefer our customers to show up five minutes before departure," Hausch says.

Rectrix, named after the bird's tail feather that controls the direction of flight, takes travelers to destinations as far as Los Angeles and London. A typical use of one of its jets is an investment firm's "road show," with executives visiting eight or nine cities in five or six days to tout a company's prospects or stock.

Of his charter customers, Hausch says, "Whatever they might like, we put on board for them-from a full lobster dinner to a hot dog."

By Jill Maunder [email protected]

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Jill Maunder is a freelance writer and public relations consultant who lives in St. Petersburg.

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