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N.O. airport: Deregulation's been trying - 3/22/1987 -

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From the Times Picayune, Sunday, March 22, 1987, Page H1 & H2

When Congress deregulated the American airline industry in 1978, it opened up a world of missed opportunity for New Orleans.

The airlines quickly used their new scheduling freedom to create hub and spoke route systems - turning many U.S. airports into huge passenger processing centers.

Passengers arrived from one city, moved to another boarding gate and flew to their final destination.  And the beauty of such a move for the alines with  the hubs:  they kept 100 percent of the fares.

but while airports with new hubs around the country boomed, some doubling passenger boarding s virtually overnight, New Orleans stagnated.

Although traffic at the airport rebounded modestly in 1986, statistics show that New Orleans International has failed to keep pace during a decade of deregulation:
  • New Orleans' airport was the 23rd busiest in the U.S. in 1978.  It had slipped to 35th by 1986.
  • While passenger boardings nationwide increased by 72.7 percent from 1977 to 1986, they increased only 19.4 percent in New Orleans during the same period.
  • From 1980 through 1985, annual passenger boardings increased only twice at New Orleans International - by less than 1 percent in 1983 and by 12.2 percent in 1984, an increase caused mostly the the world's fair.
  • Passenger boardings on international flights out of New Orleans have continued their steady slide from a high of 151,590 recorded in 1981 to 53,819 in 1986.  New Orleans also lost airlines offering international service.  At one time Easter Airlines, British Airways, Continental Airlines and four Entral American carriers offered international service.  Now, its just Continental and the Central American carriers.

"New Orleans has not been able to function as a modern airport," was the blunt assessment of a 1986 study conducted for the State Department of Transportation and Development. "(It) has not performed well in the deregulated environment."

On the plus side, passenger boardings in New Orleans increased 4.7 percent last year to 3.2 million.  That was only about half the national average, but after years of lagging behind the rest of the nation, officials hope it's a sign of a general upward trend.

"I really believe New Orleans and the airport are about to burst forward," says Norman Francis, president of Xavier University and chairman of the New Orleans Aviation Board since last summer.

Francis points out that at least two airlines - TranStar and Continental - appear committed to building up their flight schedules in New Orleans.

And, he says, the increase in convention business last year, the record-setting Mardi Gras crowds in 1987 and the continued ability to attract major sports events like the Super Bowl and college basketball's Final Four bode well for the airport's and the city's future.

The airport itself is in th early stages of a long-overdue $81.1 million rebuilding program.   A crucial runway extension is in the works, and the miniscule baggage claim area - possibly the airport's most maddening feature - will finally be 3expanded and modernized over the next two years.

In addition, experts say New Orleans current level of air service isn't particularly bad in comparison with what's available in cities of similar size.

A recent study by Northwestern University in Evanston, Il, measuring nonstop air service in the nation's 50 largest metropolitan areas, ranks New Orleans 28th - one place better than its population ranking.  According to the study, nonstop service is available to 65 percent of the destinations in the New Orleans market.

Still,  most observers concede that New Orleans probably won't shake its status as an aviation backwater overnight.

The poor local economy, which cuts down travel by local vacationers and businessmen, continues to worsen.  And New Orleans still suffers in comparison to smaller cities that have hub airlines and even some that don't

Memphis, for example, has about 400,000 fewer residents in its metro area but nonstop flights to twice as many destinations as New Orleans.

That's mainly because Republic Airlines picked Memphis in 1981 as the site for its southeastern hub.  Passenger boardings at Memphis International have been increasing by leaps and bounds ever since.  Memphis in fact, has won more flights since Republic was merged into Northwest Airlines last Oct. 1.

Airlines began concentrating their flights at hub airports after the Airline Deregulation Act of 1978 gave them the freedom to enter and leave markets without having to ask for government approval.  The hubsystems gave airlines the ability to control their traffic from origin to destination rather than lose it to competing carriers.

Besides providing cities with better air service, hub airlines also create jobs.

Hartsfield Atlanta International, a major hub for Delta and Eastern and the nation's second busiest airport after Chicago's O'Hare, generates between 30,000 and 35,000 jobs.  Hartsfield officials say that makes it the largest non-federal employer in the Southeast.

Except for Pride Air, which lasted for less than four months in 1985, New Orleans has never had a hub airline.  Geography, economics and a lack of salesmanship all seem to have worked against the airport.

With the Gulf of Mexico at its back, New Orleans is virtually useless as a hub for domestic north-south air traffic, industry observers say.

"Geography is the key," said American Airlines spokesman Al Becker.  "If New Orleans were in Missouri, Kansas or Oklahoma, it would be a major hub today."

And with no major airline headquartered here, New Orleans didn't have the head start enjoyed by cities such as Houston, Dallas and Atlanta, where Continental, American and Delta respectively are headquartered.

Las Vegas, on the other hand, has show that an airport in a tourism-minded city can prosper even without a hub airline.  Between 1982 and 1987, tourism in creased 30 percent in Las Vegas.  During that time, boarding at McCarran International Airport increase by the same amount - more than triple the rate in new Orleans.

The airport has also suffered from having no full-time marketing experts on its staff to lobby the airlines for more flights.

"If you want better service you've got to go out and get it," says John Nammack, an Arlington, Va. based airline consultant.  "You're in competition with every other airport int eh nation."

Mayor Sidney Barthelemy has launched his own campaign of airline diplomacy since he took office last year.  The mayor has visited high-ranking executives with Delta and Continental, and saw some of their effort pay off earlier this year when Continental nearly doubled its level of service in New Orleans.

"I think it matters tremendously to them," Bartholemy says of his visits with airline officials.  "for the most part, I don't think they're aware of all the things New Orleans has to offer."

Francis and Aviation Director James Chubbuck have also been waging a steady battle to convince the airlines to spend more money to upgrade New Orleans Interational.

Under their existing master lease with the airport, the airlines pay for all construction projects at the airport, except for runways an the air traffic control system, which are paid for by the federal government.

In return, for shouldering the financial burden, the airlines have veto power over what gets built.  It's a power they've used often in the past, especially on such big ticket items as the $10 million baggage claim area expansion.

By not investing money in New Orleans, the airlines kept their landing fees low here.  As recently as 1984 , landing fees charged at New Orleans International were only 21 cents per 1,0-00 pounds of takeoff weight, one-fourth the average amount being charged at 30 other U.S. Airports at the time.

But negotiations in 1985 finally produced a $48.3 million bond issue that will finance a variety of projects, including the baggage claim area, a new parking garage and several cosmetic improvements to the 27-year-old terminal building.

"The airlines got ayay with murder here for years," Francis says.  "They didn't have the foresight to spend the money needed here, and now it's crying time and paying time."

But as Barthelemy points out, the city itself wasn't exactly farsighted in the past.  The mayor notes that New Orleans International is wedged onto 1,500 acres in the middle of Kenner, with no room for expansion except into the environmentally and politically sensitive wetlands of St. Charles Parish.

"It would be almost impossible to expand out there, but we're going to have to expand if we're going to be competitive," Bartholemy said.

When New Orleans began developing what was the Moisant International in the 1940s and '50s, there was a large amount of open land around the airfield.  But, rather than buying up vacant land, the airport allowed itself to be hemmed in by residential developments.

A movement began in the late 1960s to build a new airport for the region and a 1920 study recommended building it in the eastern end of Lake Pontchartrain at a estimated cost of $250 million.

But in 1974, the state concluded a year-long study of its own.  Gov. Edwin W. Edwards with support of New Orleans, Jefferson Parish and Kenner officials, announced that the existing facility would be the airport of New Orleans future.

Rumors have circulated recently that  group of private businessmen are attempting to revive the idea of a new airport -- this time on semi-dry land in eastern New Orleans rather than in the lake.

But city officials consistently have denied the reports and even if the move gathers team, the costs are likely to be prohibitive.  The airport the city of Denver is building to replace Stapleton International will cost $1.7 billion.


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