April 6, 2015

Malloy proposes $5M subsidy for transatlantic flight

PHOTO | Contributed
PHOTO | Contributed
In New England, Aer Lingus has direct flights from Dublin to Boston, Mass., Burlington, Vt., and Portland, Maine, as well as New York City.
PHOTO | Pablo Robles
Bradley International Airport offers commercial international service to Toronto and Montreal, but nothing across an ocean.
PHOTO | Pablo Robles
One of Bradley Internationalís major additions in recent years has been JetBlue offering nonstop service to Fort Lauderdale, Fort Myers, Orlando, Puerto Rico, Tampa, West Palm Beach, and Washington, D.C.

Gov. Dannel P. Malloy has set aside $5 million in his proposed budget to subsidize a transatlantic flight out of Bradley International Airport in Windsor Locks, a move that could potentially elevate the status of Connecticut's largest and busiest airport.

A likely recipient of that funding would be Ireland airline Aer Lingus, which the quasi-public Connecticut Airport Authority has been courting to put a nonstop flight from Bradley to Dublin. CAA has been working with the MetroHartford Alliance to convince Aer Lingus that the region has enough passenger and business support for Bradley's first daily transatlantic flight since Delta Air Lines pulled its Amsterdam nonstop in 2009.

"If you are not a major hub like Atlanta or Chicago … it can be difficult to have significant routes like that, so you have to provide some financial incentive," said Oz Griebel, CEO and president of the MetroHartford Alliance.

A transatlantic flight would be a major win for CAA because that was the first significant benchmark the organization established for itself when it launched in 2011. Along with other key route expansions, an international flight could restore Bradley to its pre-Great Recession passenger counts just as CAA is upgrading the airport's facilities and seeking to expand service out of the state's smaller airports.

State Department of Transportation Commissioner Jim Redeker mentioned the potential international flight subsidy at a March 25 MetroHartford Alliance event, but he declined to comment further on the topic. He referred all media inquiries since to Kevin Dillon, CAA executive director and CEO.

Dillon had no comment on the governor's budget.

The $5 million in Malloy's budget for the state Department of Transportation still must be approved by the General Assembly. Since the legislature is facing deficits in excess of $1 billion in each of the next two fiscal years, it's not clear if the funding will be granted.

The state budget must be approved by June 30, so if Aer Lingus wants to get the funding for the Dublin flight, it would have to make a final decision well before that date in order to gain legislative authorization.

The $5 million likely would be used as a revenue guarantee, which isn't typical but has been utilized by other U.S. airports, Griebel said. Pittsburgh International Airport, for example, struck a similar two-year, $9 million deal with Delta to fly a nonstop to flight to Paris.

Rather than giving Aer Lingus $5 million outright, the money would be used only to insure against losses on the operation of a Dublin-Bradley nonstop. Under this revenue guarantee model, Aer Lingus and the state would settle on a breakeven point for the flight, and Connecticut would make up the difference if Aer Lingus incurs any revenue shortfall, up to $5 million.

CAA also is working with members of the MetroHartford Alliance to see if any Greater Hartford businesses would be willing to provide money for Aer Lingus to operate the Dublin nonstop, Griebel said.

"We are confident if this service gets approved, it will be sustained, but you have to get the airline to agree, which is probably going to have to include some kind of financial incentive," Griebel said.

Aer Lingus officials did not return requests for comment.

Bullish outlook

Expansion of Bradley nonstop routes has been CAA's top priority since it took over control of the Windsor Locks facility and the state's five other general airports from the state Department of Transportation. CAA was created so that airport decisions could be made more quickly.

Although the CAA has been successful in adding some routes, including an increase in JetBlue flights to Florida and United Airlines to Houston, the authority's first major win — an American Airlines nonstop to Los Angeles — didn't pan out. American Airlines stopped the service in less than a year because it wasn't earning a high enough yield per seat. The flight was operating at about 80 percent capacity.

Adding a transatlantic flight and restoring service to the West Coast via Los Angeles and/or San Francisco would significantly increase traffic in and out of Bradley, Dillon said.

"We are generating a significant amount of traffic out of here," Dillon said. "This is a very healthy market here, and it is a matter of convincing the airlines to increase their service."

Passenger counts at Bradley increased 8.4 percent in 2014 to 5.9 million, the largest increase since CAA took over operations. In January passenger counts rose 1.1 percent from a year earlier, according to CAA.

With new route developments, Dillon said it is likely in the next five to 10 years that Bradley will return to its record passenger counts of 7.2 million set in the mid-2000s, especially as the airport improves its facilities.

"We can achieve that and probably go beyond," Dillon said.

Fresh look

There are several projects underway aimed revamping Bradley's facilities. In December, the airport began the $15 million demolition of its Murphy Terminal, which will be followed by a $10 million road realignment project. In 2018, CAA plans to open a ground transportation center with rental car facilities and bus service to the Windsor Locks Train Station, with the possibility for connection to a light-rail system.

Making it easier to get in and out of Bradley on the ground will be important in attracting travelers for an international flight, said Griebel, who added that he could see the Windsor Locks facility becoming a hassle-free alternative to airports in Boston, New York City, and New Jersey.

While Dublin might not be the final stop for most Connecticut travelers to Europe, Aer Lingus is working to make it a hub similar to airports in London and Paris, said Griebel. The flight from Connecticut to Dublin would be shorter than the previous Bradley-to-Amsterdam nonstop with the same connectivity to the rest of Europe.

Another advantage to a Dublin nonstop flight: Ireland is the only European country where U.S. Customs & Border Protection allows passengers to preclear. Passengers waiting to board a plane in Dublin can check in with customs there and avoid having to wait once they land in America. This can create a major time advantage, especially compared to busy international airports like John F. Kennedy in New York City, Griebel said.

Meanwhile, CAA is working to add international check-in service at Waterbury-Oxford Airport, one of the five general aviation airports it operates, Dillon said. Right now, passengers flying private jets internationally to Waterbury-Oxford must stop at another airport first to clear customs before landing at Waterbury-Oxford.

CAA is talking with Waterbury-Oxford's primary tenant — executive jet operator Keystone Aviation — about adding customs facilities there. That would require about $1 million in construction costs and $200,000 per customs officer in annual operating costs, Dillon said.

The advantage is international travelers could fly directly to Waterbury-Oxford, and the airport could become a stopping point for other passengers needing to clear customs before landing at a different facility, Dillon said.

"It does an awful lot in terms of enhancing the overall opportunity of the airport," Dillon said. "There is a whole level of corporate activity that goes on there."

To add more service in Connecticut, CAA is in negotiations with airlines about bringing commercial flights to the Groton-New London Airport, said Dillon. The submarine base in Groton, for example, could make use of a New London-Washington, D.C. nonstop.

But transatlantic service out of Bradley remains CAA's top priority. That international nonstop encourages other airlines to think about adding more services in and out of the Windsor Locks facility, Dillon said.

"When you develop international service, you develop additional domestic feeders," Dillon said.

An international flight also would help restore Bradley's international cargo service, as an airline could put the cargo in the belly of its passenger airplanes, Dillon said.

[Editor's note: Bradley International in October announced non-stop service to Dublin with a subsidy.]

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