The Takeoff Episode 03: Why Team and Culture Matter for Travel Startups Sponsored This content is created collaboratively with one of our sponsors.
As airlines have consolidated and cut services, smaller airports like Niagara Falls are always in search of a hook that will keep planes flying.
Despite the loss of Direct Air in 2012, Niagara Falls International Airport had a banner year in 2013, with two profitable airlines, Allegiant Air and Spirit Airlines, flying more than 88,000 passengers to sites in Florida and South Carolina.
The Falls airport also has become a cheap alternative for Canadian travelers, who, according to an informal survey by the Niagara Frontier Transportation Authority, make up almost 88 percent of the airport’s customers.
In 2013, the signs of continued success included a $16.8 million investment to strip, resurface and replace lighting on the airport’s 9,825-foot-long runway. That project was paid for by a grant from the Federal Aviation Administration, which chipped in $10.7 million; the Niagara Airbase, which paid for the third of the airstrip it shares with the airport; and the state Department of Transportation. The updated runway has a 15-year life span and can bear the weight of large aircraft.
Also announced in November was a new partnership with Calspan, a Cheektowaga-based flight research company already doing business at the airport. Calspan has replaced Niagara Falls Aviation as the fixed base operator at the airport, providing maintenance, as well as fueling and parking for carriers.
In addition, the old terminal, which closed in 2009 when the NFTA unveiled the new $31.5 million terminal, reopened in June as the new home of the Niagara Aerospace Museum. It offers full displays of aircraft, artifacts and the rich history of aviation in Western New York, dating from the Bell Aircraft/Aerospace and Curtiss-Wright corporations.
The airport also added 177 parking spots near the terminal in 2013, bringing the number of spaces to 1,700. Almost all of them are taken at the height of spring break vacation season. Also, a second car rental company, Hertz, joined Enterprise in offering services at the airport.
In 2007, Direct Air began offering direct flights out of the old terminal to Southern destinations such as Myrtle Beach, S.C., and Orlando, Fla.
In March 2012, the airport hit a rough patch when Direct Air abruptly shut down, eventually filing for bankruptcy. But by that year, the airport already had attracted two more low-cost carriers, Allegiant Air and Spirit Airlines, which added more flights and more routes to take up the slack.
“They were the sweetheart, and we are very grateful that they chose to fly out of our airport,” William R. Vanecek, the NFTA’s director of aviation, said of Direct Air. “We had pursued them and developed a relationship. They actually ran out of the old terminal, which was way too small to operate multiple airlines, and they were the final peg to build a new terminal.”
But Vanecek is quick to point out that the fault was with the airline, not the airport.
“They were flying to 20 destinations and shut down all 20 destinations. They went out of business. They didn’t just pull out of Niagara Falls,” Vanecek said. When Direct Air left, he said, there was a dip in passengers in 2012, but overall the airport was able to catch up.
According to Vanecek, 18,979 passengers flew out of Niagara Falls in 2009; 35,657 in 2010; 98,604 in 2011, when there were three carriers; and 88,629 in 2012, when Direct Air was in business for only 2 1/2 months.
Passenger traffic is growing, but it is slow growth, Vanecek said, with Allegiant and Spirit picking up where Direct Air left off. “One of the markets Direct Air flew to was Myrtle Beach,” he said, “and when Direct Air pulled out, Spirit Airlines picked up some of that flying. Direct Air was also flying to Punta Gorda, and that’s been backfilled by Allegiant.”
He said the airport’s busiest months have been December, with about 70 flights, and March, with 100 or more.
Currently, Spirit Airlines offers flights from Niagara Falls to Fort Lauderdale, Fla., and Myrtle Beach, S.C., while Allegiant Air flies to three destinations in Florida — Orlando/Sanford, near Daytona Beach; Punta Gorda/Fort Myers; and Tampa/St. Petersburg.
Vanecek said that there are really two separate airline markets in Western New York.
“Buffalo is always going to be the business market for the area, and Niagara Falls has more of a lure for the leisure traveler,” he said.
Vanecek said Spirit and Allegiant are no longer in the startup category. They are well ingrained in the airline industry, he said, and are two of the airlines that have been profitable year after year.
Niagara Falls has proved to be a good location for the travel market, especially drawing Canadians, according to Vanecek. He said there are fewer international fees and taxes when you fly within the United States to another U.S. city, rather than from Toronto’s Pearson International Airport; more competition to those destinations, which in turn lowers the rates; and a good exchange rate for the Canadian dollar.
“It’s more affordable to fly out of our airport, and if you live in St. Catharines/Hamilton, the time to fly out of our airport and the time to get to Toronto — one can argue that you are in the air faster coming across our ground borders. So it’s time and money,” he said
Will there be new locations for Niagara Falls travelers to chose from?
Vanecek said the airport will stay where it is at for a while, but at the same time, it will be meeting with tour operators in Europe and with international carriers.
“What we are up against is limited flights that come to the U.S., and they go primarily to hubs, because a big component of international flights come from the business traveler, so it’s much more difficult to pitch a pure leisure destination, unless you are Disney World,” Vanecek said.
“In my view, it’s much like Direct Air. They came in, and we caught the eye of the other airlines. If we can get No.1, then No.2, 3 and 4 will follow.”
Vanecek said the main support for Niagara Falls International Airport is Buffalo Niagara International Airport, which subsidizes losses.
“The problem with Niagara Falls is, you’ve got land similar in size to the Buffalo airport, long runways, long taxiways, but you don’t have the air traffic, so you don’t have the revenue base. But being a joint use facility — shared by the Air Force Reserve’s 914th and the Air National Guard 107th — it’s very important to the Niagara community, and it’s important to our side, because we are generating some traffic and hope that grows over the years,” Vanecek said.
In 2005, the community rallied together over a threatened closure of the Niagara Falls Air Reserve Station, and the Niagara Military Affairs Council has already been meeting and preparing a strategy for the next round of base realignments in 2015.
Council Chairman John A. Cooper Sr. said that there are a lot of reasons to keep the Falls air base off the list in the next round.
Cooper said the last negative action was in 2012, when the 107th Airlift Wing was facing cuts, but since that time it has received a new mission: making a transition to remotely piloted aircraft. But Cooper said the Air Force does not categorize this as a drone, because the planes are used — remotely — by trained pilots in a battle zone.
“This is a long process, and they won’t be up and running until 2019. It includes training, and they will be sending their first people off at the beginning of this year,” Cooper said.
Cooper said that for 20 years, it had felt as if operations at the Falls base had a “target on their back,” but the council has been very involved in advocating for the base.
“Since 1995, well over $100 million in investments have been put in this facility. Those dollars have been spent in a strategic way to modernize the facility and to make it valuable to the military,” he said. “We hope at some point to be too valuable to close.”
He said Korean War-era lodging facilities, for air personnel to use during training, have been upgraded and modernized; and there also has been an investment of more than $15 million for a C-130 transport simulator and $6 million training facility, which is in progress and will open in 2015. The training facility will be used for the Northeast, bringing in 450 air crew members to Niagara Falls for training every year.
“Just because you built buildings doesn’t mean you are going to save the base,” Cooper said, “but if you build the right buildings and have a plan that goes with it to bring the facility something like the C-130 simulator, which is attached to the ground, it is something that brings some stability, rather than aircraft, which they can move.”