Two years after Delta Airlines left the Memphis Airport without a nucleus, the Memphis-Shelby County Airport Authority is rebuilding with a focus on low-cost carriers, a new incentive program, a modernization plan, and leadership from a new board chairman.
It's an apropos sentiment given the determination shown by the Memphis-Shelby County Airport Authority
(MSCAA) lately. They are determined to rebuild the airport piece-by-piece two years after Delta Airlines dropped Memphis as a hub, and they hope to attract service that gives citizens what they need, an airport that is "Memphis' hub."
"The airport authority, from the perspective of its business model, is as strong as its ever been," said Scott Brockman, president and CEO of the MSCAA. "We have weathered the hard part of the storm. The eye of the hurricane has moved past us. Our cost is a little higher than we would like it, but that's explainable and we have a path to the future to lower those costs so we can attract more and more carriers down the road."
He said that Memphians can expect the airport to grow in its low-cost offerings as budget airlines were difficult to attract when Delta was the hub carrier. "We can now target service that can reach out to a broader spectrum of the community," he added, pointing to the recent additions of Allegiant Airlines
' nonstop flights to Austin, Las Vegas, and the Florida cities of Clearwater, Fort Lauderdale and Orlando.
Securing business-minded carrier OneJet was another big win for the airport this year. As a certified carrier through FedEx's global travel vendor, the nonstop service from Memphis to Indianapolis is intended to cater to FedEx employees looking to travel to the Midwest hub.
Beginning this year, business travelers can also hop on one of American Airlines' two nonstop flights to New York-Laguardia. Brockman said that these recent additions speak to his team's tireless effort to sell Memphis as a top destination.
Part of that strategy is revamping the MSCAA's existing incentive program. Now in its fourth iteration, the new Community Air Service Development Incentive Policy has been adjusted to attract a variety of airlines with an increased budget of $1.5 million--up from last year's $1 million. When the program was introduced in 2012, benefits were structured with size of aircraft carrier. At the time, American Airlines was the only airline qualified to claim the incentive garnering $500,000 in benefits in its first year.
"This new policy allows me and my team to develop the incentive based upon the airline and the frequency of the destination," Brockman said. "We have a flexibility to work with a carrier not only based upon what resources we may have but also what is best suited to the carrier."
Flexibility is the key strategy for Pace Cooper, newly-elected MSCAA chairman and president and CEO of Cooper Hotels. In his new position, Cooper hopes to sell prospective carriers on Memphis' economic viability. "We know that the first sale of approach needs to be viability on an economic standpoint, but what the incentive program has historically done has added icing on the cake for carriers looking at Memphis," he said. "What was good for the dominant carrier is not necessarily good for long-term viability of having multiple balanced airlines, each thriving and growing and looking for opportunities to do more here."
The new, less-rigid incentive program comes with four priorities. Paramount is securing airlines that offer flights on MSCAA's targeted destination list. Topping the list is San Francisco, Boston, Fort Lauderdale, Fla., Phoenix, Aza., and Seattle.
Secondly, Brockman hopes to attract any other destinations that are not currently served or have no competition. "Policy isn't solely about bringing in new destination. It also can give us the ability to incentivize service that provides competition on a route," he added.
The other priorities are attracting non-stop European flights and non-stop service to a destination greater than 800 miles from Memphis.
Cooper said that he feels "a real sense of urgency" in rebuilding Delta's flight schedule, and his long-term goals include overseeing the implementation of the airport's $114 million modernization plan.
Now in its initial stages, the five-year plan includes demolishing the south end of Concourse A and Concourse C to allow planes better access to all the gates on Concourse B. All airlines will be consolidated in the middle concourse, and the airport will do away with single-lane entrances leftover from Delta's presence.
Brockman said that 42 of the airport's total 86 gates were affected by infrastructure blockage, and the consolidation will reduce costs and flight delays for the airport's two million annual passengers.
"The reason for that is the hub carrier has a much less efficient gate utilization than an origin-and-destination carrier," he added.
With the downsize of Delta, only 25 gates are in routine use, so theoretically the airport offerings could more than double before Concourse A and C had to be reopened. Until then, Concourse C will only be utilized for the purpose of accessing the C security checkpoint during peak hours. The south end of the terminal will be walled off with a giant window. Concourse A will be mothballed until it becomes necessary again.
With some facilities going back 50 years, the airport is well due for an upgrade. Upcoming enhancements include increased natural lighting, addition of moving walkways, expansion of boarding areas and the installation of 35 flatscreen Flight Information Display units and 24 Baggage Information Display units.
"Our thought is to take advantage of re-positioning our concourses to help make our offering more attractive, but also because it's important that we address the long-term planning and continued viability of having a terrific and well regarded asset in the way of the airport," Cooper said.
"We're going to rebuild this airport," Brockman attested. "But we're going to rebuild it as Memphis' hub. So we're going to bring in service that fits the specific origin and destination demand of our city."