HED:Airport use increases; some costs questioned
By Marty Russell
The Tupelo Regional Airport terminal is beginning to show signs of life again after a second airline began operations in mid-July and a local restaurateur opened a franchise there.
But at least one airport authority member is questioning the costs being incurred in marketing the facility based on the traffic.
Boardings were up 41 percent at the facility in July even though Mesa, the city's newest air carrier which began service July 14, only boarded 155 passengers in its first half-month of operation.
Most of the increase can be attributed to the city's other carrier, Northwest Airlink, which dropped its fares to compete with Mesa's arrival and subsequently saw boardings go from 1,015 in June to 1,248 in July.
Airport Manager Roger Blickensderfer said he was pleased with Mesa's initial showing and the fact that most of Northwest's flights were full for the previous month.
"We're very pleased with the airline situation," Blickensderfer told members of the airport authority at their monthly meeting Tuesday night. "It's starting to show a turnaround."
But at least one authority member questioned the amount of money that had been spent to bring about that turnaround.
Authority member Bob Lehman said he thought it was "ludicrous" to spend the $250,000 the airport expects to spend this year on marketing and advertising to bring in the 15,000 to 16,000 passengers Blickensderfer expects the facility to serve by the end of the year.
"We could have just offered them a rebate of $10 per ticket," Lehman said of the amount being spent. "This seems to me to be ludicrous. I don't understand marketing but I understand tax dollars. ... The airport's running a $25,000 deficit this year and this just doesn't add up."
Airport authority members learned at Tuesday night's meeting that the airport's projected deficit for this year, originally expected to be $15,000 to $20,000 because of the loss of American Eagle last year, now is predicted to be about $25,000. The airport will have to dip into reserves to cover the shortfall.
Meanwhile, the airport successfully solicited $143,500 from the city and $50,000 from Three Rivers Planning and Development District to market the facility this year in addition to its own marketing budget.
"I know it looks disproportionate," Blickensderfer said, after the meeting, of the marketing funds spent versus the number of passengers being attracted. "But you're betting on growth. That's what marketing and advertising for any business is."
Authority Chairman Bill Allen also defended the expenditures.
"Hopefully we will see some benefit in the long term," Allen said.
In addition to the marketing funds expended, the city, airport, Lee County and the Community Development Foundation put up $400,000 this year to guarantee Mesa a profit for starting service in Tupelo.
While Blickensderfer said he had not seen the documentation yet to show whether Mesa would receive a portion of that fund for July, he said he was not disappointed in Mesa's boardings thus far.
"Remember they were only here half the month," he said. "If you spread that (155 passengers) out over the full month they had 300 passengers. That's a good start. ... I think it will take 45 to 60 days before we get a feel for what they're actually going to do."
Blickensderfer said August should be a strong month for both airlines because of the biannual furniture markets and it will probably be September before routine boardings for Mesa for a month can be seen.
On another front, he said the first month for Sir Antony's Bakery, which moved into the terminal in July, was more successful than expected.
"They had a small profit," Blickensderfer said. "You would expect any business to have a loss on a start-up but they had a profit."