Looking for a way to lure passengers and airlines to Atlantic City airport

Posted: May 16, 2012

If they build it, will we come?

Construction crews are finishing a $27 million, 75,000-square-foot expansion of Atlantic City International Airport that will add new gates and a federal inspection station for international flights and expand the baggage-claim area.

Plans are under way for a $40 million connector road to better link the airport to the Atlantic City Expressway by 2016. A new parking garage has been built, and a contract has been awarded for a hotel adjacent to the airport, although construction has not begun.

For all the activity, though, the nagging question remains: Are there passengers to fill the seats to lure the airlines to use the airport?

New Jersey officials, including Senate President Stephen Sweeney (D., Gloucester), are trying to interest the Port Authority of New York and New Jersey in taking over operation of the Atlantic City airport.

“If we could get the Port Authority to basically adopt it, we could use the strength of the Port Authority to strengthen the Atlantic City airport,” Sweeney said. “We need them to leverage something for us.”

“We’re trying to create and grow an airport,” Sweeney said. “They do a great job, but they don’t have the resources.”

A spokesman for the Port Authority declined to comment on the prospect of assuming control of the Atlantic City airport.

Only one regularly scheduled carrier, low-cost Spirit Airlines, serves Atlantic City, with flights to several Florida cities and, during spring and summer, to Atlanta, Boston, Chicago, and Detroit.

AirTran Airways pulled out of Atlantic City in January, several months after subsidy payments from the airport operator ended. Since 2000, U.S. Airways, Delta, Continental and West Jet also have halted service to Atlantic City, citing unprofitability.

And, despite its name, Atlantic City International has no scheduled international service.

The airport operates at a deficit, subsidized by tolls from motorists on the Atlantic City Expressway. For 2010, the most recent year for which data are available, the subsidy was $3.2 million.

The two top officials in charge of the airport are leaving: Bart Mueller, executive director of the South Jersey Transportation Authority, which operates the expressway and the airport, has resigned, effective July 1; and longtime airport director Thomas Rafter is leaving May 31 to become manager of Nantucket Memorial Airport in Massachusetts.

Sweeney, the Christie administration, and Atlantic City promoters all tout the potential of the airport to expand and be a bigger driver for the regional economy.

Officials envision Atlantic City as an attractive alternative for passengers seeking to avoid congestion and delays at Philadelphia or Newark airports.

The problem is, as Sweeney put it: “People are not going to fly out of someplace if the planes don’t fly someplace they want to go.”

“I live in West Deptford. I’d go to Atlantic City, if I could get where I want to go,” Sweeney said.

Atlantic City is the 108th-busiest airport in the country, of 831 U.S. airports, according to federal data. Last year, total passenger traffic (including passengers on charter flights, which make up about 20 percent of the airport’s business) was 1.4 million passengers, down 2.2 percent from its record high in 2010.

Through April of this year, 425,819 passengers used the airport, an increase of 5.4 percent over the first four months of 2011.

Airport officials hope to double traffic, to 3 million passengers a year, within about five years, Rafter said. The goal is to add destinations and airlines to attract passengers from Newark and Philadelphia. Mueller said direct flights to the Caribbean may be added before the end of the year.

Most airlines have been reluctant to operate from Atlantic City unless the airport paid them to do it. Such subsidies, or “risk abatement agreements,” are not unusual for small airports, but often when the payments stop, so do the flights.

“We left the market because we weren’t generating as much revenue as we hoped,” said Joseph Perone, a spokesman for Delta Air Lines, which pulled out of Atlantic City in 2008.

AirTran received about $5.5 million over three years from the SJTA before the subsidies ended last September. AirTran, acquired by Southwest Airlines in a merger, quit Atlantic City in January.

Aviation industry consultant Robert Mann said such subsidies “are more frequent now, as fuel prices are causing some airlines to cut service to small markets.”

“When the subsidies stop, the jets stop coming.”

He suggested that Atlantic City is a niche destination, primarily for gamblers, and “if it diversifies in some meaningful way,” it might be more of a draw for visitors — and airlines.

“If the demand isn’t there, will adding new facilities change that?” Mann asked.

Contact Paul Nussbaum at 215-854-4587 or pnussbaum@phillynews.com.

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