RDU incentive policy aims to attract new flights, carriers

Raleigh-Durham International Airport officials hope a new incentive policy will help attract new flights and carriers to take its customers directly to places such as Kansas City, Puerto Rico, China and South America.

The Raleigh-Durham Airport Authority approved a 12-month Air Service Development Program late last week that would provide marketing assistance and landing fee waivers for new flights to top markets, particularly Kansas City, San Diego and Puerto Rico. Similar incentives will be provided to help kick start new international flights and attract new airlines, and rebates will be provided to airlines that exceed 2 percent growth in the number of passengers boarding planes at RDU this year.

“We want to attract a certain kind of service to our community and the service that would be most successful, and this is going to be the way to do it,” Kristie VanAuken, RDU’s vice president of communications and community affairs, told the eight-member board. “We feel like it’s exactly right for what we need for RDU.”

This comes after a record-breaking 2016 for RDU, when more than 11 million people traveled through the airport. This topped the previous record, set in 2000, of 10.4 million passengers.

Airports offer incentives the way states and local governments provide tax breaks and other perks to lure businesses. VanAuken said RDU’s last incentives program expired more than a year ago. In the last five years, the airport has attracted three new airlines – Alaska Airlines, Allegiant Airlines and Frontier Airlines – and 24 new flights, partly because of incentives.

“Every one of the airports that we know have an air service development program of some kind,” she said. “So even to be in discussions with airlines, they have an expectation that you are going to come to the table with some partnership program like an air service development policy.”

VanAuken said while the airport has continued to see growth in seat capacity since it stopped offering incentives, that growth is beginning to slow. “So we want to maybe just jump-start this a little bit,” she said.

RDU offers flights to 47 nonstop markets through nine carriers. Virgin America will be the 10th carrier when it begins flights to San Francisco in October.

The biggest flight changes of the last year include Delta’s addition of a nonstop flight to Paris and America Airline’s upgrade of its nonstop service to London’s Heathrow Airport to a Boeing 777-200 – a larger aircraft.

“This is a great portfolio of service but not all that we can get,” VanAuken said. And the incentive program is a way to attract even more.

Goals for international service

More international service options are high on the list of RDU’s aspirations. The airport offers flights to four international destinations: London, Paris, Toronto and Cancun.

In 10 years, RDU president and CEO Michael Landguth said, “I’d love to have the China service. Maybe there’s an additional flight getting to Europe. Hopefully have service into South America and service in the Caribbean.”

“I think those are all attainable based on what we are seeing from the economy, the market, economic growth in the region, what our customers look like and what the demand is driving,” he said.

Landguth said RDU has not begun conversations with specific carriers to connect RDU to Central America, but it is also a long-range goal.

Attaining new services, particularly international ones, takes time.

“From the time we have initial conversations with a carrier, it could be five, six, seven years down the road before we see that service, particularly in the international sphere,” VanAuken said. “The domestic routes or the Caribbean – those things could maybe happen earlier, but when we’re talking about Central and South America, those things are definitely long-term projects for us. Exciting prospects but still very early.”

New tools

The new incentives program, which runs through next March, would provide $200,000 in marketing assistance for new international flights that run at least five days per week, all year. VanAuken said RDU would assist in designing a marketing campaign and would fund advertising, promotions or events.

“It’s not a handout at all,” she said. “It’s very much a partnership. So we work literally hand-in-hand with the carrier. We never cut them a check.”

RDU also would offer $100,000 in marketing support for new airlines that come to RDU and provide a minimum of 12 departures per week. VanAuken said the airport wants to attract more low-fare airlines similar to Frontier and Allegiant, as well as carriers with flights to China, the Far East, Central America and South America.

Starting April 1, RDU would provide $50,000 in marketing assistance for airlines that add nonstop flights running at least five days per week, all year, to Kansas City, San Diego or San Juan, Puerto Rico. These cities are three of RDU’s top five destinations without nonstop service now.

Another option is a landing fee waiver for new nonstop flights to one of the airport’s top 50 markets, such as Portland, Ore., or Memphis, and a 50 percent landing fee waiver to a 51 to 100 market. The landing fee is $2.204 per 1,000 pounds, or about $1,200 for the Boeing 777-200 that flies between RDU and London.

This story was originally published March 27, 2017 at 11:56 AM with the headline "RDU incentive policy aims to attract new flights, carriers."