Hancock takes wait-and-see approach after cutting fees

SYRACUSE - The recent reduction of landing fees and terminal rental rates at Syracuse Hancock International Airport has left the facility more competitive with its upstate counterparts.

The ultimate effect of the fee reductions on the availability of air service to and from Syracuse, however, is less clear.

The city announced June 22 that landing fees at the airport would drop from $2.61 per 1,000 pounds of landed airplane weight to $2.46 per 1,000 pounds. The rental fees airlines pay for space in the terminal are also being cut from $69.99 per square foot to $64.09 per square foot.

The changes took effect July 1.

"It shows the airport is doing its best to cut costs for the airlines," says Anthony Mancuso, aviation commissioner. "I think it's a very large piece of airlines deciding on expansion of service."

Greater Rochester International Airport is now the only major upstate airport with landing fees cheaper than Hancock. Airlines landing there pay $1.82 per 1,000 pounds, says David Haas, senior management analyst for the facility.

At Albany International Airport airlines pay $2.54 per 1,000 pounds and at Buffalo Niagara International Airport they pay $2.87 per 1,000 pounds.

Terminal-rental rates are $55.43 per square foot in Rochester, $82.72 per square foot in Albany, and $39.13 per square foot in Buffalo.

The fee reductions at Hancock are possible because of the airport's recent success, Mancuso says.

Since passenger traffic has been on the rise, planes' landing weights have been higher, which means more fee revenue, Mancuso says. In 2004, traffic rose more than 19 percent to its highest levels since 1992.

That translates into more than $1.2 million in extra landing-fee revenue for the 2004-2005 fiscal year, according to the city's 20052006 proposed budget.

Increased revenues from concession sales at the airport also played into the fee reductions, Mancuso adds. Those revenues were up nearly $700,000 during the 2004-2005 fiscal year, according to the budget.

The airport's total budget is about $14 million.

"[The reductions] make the airport more business friendly," Mancuso says. "It shows a commitment to cutting costs."

Representatives of several airlines, however, say the relationship between reduced costs and increased service is not necessarily direct.

The cost of doing business at an airport is just one factor in decisions on service expansion, says Amy Kudwa, a spokeswoman for US Airways, Inc., which provides more flights and destinations out of Hancock than any other airline.

"Customer demand is probably the most key element," Kudwa says. "The cost of flying into an airport does play into those decisions, but where people want to fly is probably most important."

Kudwa had no comment as to possible service expansion in Syracuse. The company has been in bankruptcy protection since 2002 and reported a loss of $39.7 million for the month of May.

Richard DeLisi, director of corporate communications for lowcostcarrier Independence Air, says the fee reductions probably will not lead to an increase in Syracuse service.

"Our schedule in Syracuse is pretty well set," he says.

He adds, however, that Independence has never run into a situation at any airport, including Hancock, where the cost of doing business is prohibitive.

"Every airport in America is constantly hungry for low-fare service," he says. "We've traditionally received a very warm welcome at the airports we've entered."

Independence announced in May it expects a first-quarter net loss of $105 million.

Even with the landing fee and rental rate reductions, Syracuse remains more expensive than any other airport in the Northeast for Jetl3lue Airways, says Bryan Baldwin, a spokesman for the low-cost carrier. The comparison includes airports in upstate New York and Vermont, Baldwin says.

He says the latest fee reduction is a step in the right direction and that the airline wants to grow in Syracuse, but needs further cost reductions to do so.

"JetBlue would like to be able to grow in Syracuse, but we want to remain a low-fare carrier," he says. "It becomes difficult to stay a lowfare carrier if we cannot remain a low-cost carrier."

In addition to costs, JetBlue also examines fares, demand, traffic patterns, and aircraft availability when making service expansion decisions, Baldwin says.

JetBlue reported in April it had revenues of $374.2 million and net income of $7 million for the first quarter of 2005.

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