Ford Airport Looks Toward Future

March 1, 2005
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GRAND RAPIDS — The airline industry is still in a state of flux, and the legacy carriers are watching to see who’s going to survive the bankruptcies.

Meanwhile, the legacy carriers are trying to remake themselves into low-cost model airlines, which typically boast lower overhead, newer equipment, and lower cost labor contracts that demand a higher level of productivity, said Kent County Aeronautics Director James Koslosky.

“We’re reacting to that by simply staying the course in terms of our business model and strategy, in that we’re building infrastructure and support facilities for our customers.”

Passenger activity at GeraldR.FordInternationalAirport now exceeds 2 million a year and is forecasted to double over the next 20 years, so facilities have to be built to meet the demand, he said.

Ford’s service area covers 13 West Michigan counties. According to Koslosky, the airfield has plenty of capacity to meet the demand for aircraft operations, and the terminal — with some minor expansion and tweaking related to security operations — also has the capacity to meet needs for the next 20 years and beyond.

Although 3 percent to 4 percent growth in passenger activity was forecasted, activity at Ford International was up nearly 10 percent last year.

“That makes you a little nervous, because if you keep growing at those rates, you double your activity in 10 years rather than 20 years,” Koslosky noted. “My feeling is that we’re going to level off and get back to that 3 to 4 percent growth rate because you reach market saturation.”

All of Ford International’s growth has been in what Koslosky calls “personal discretionary traveling.” He estimates the mix is about 60 percent discretionary travel and 40 percent business travel, which is the opposite of what it was five years ago. Business travel is off worldwide. He attributes that trend to a combination of the Sept. 11 terrorist attacks, the SARS scare, and the recession and accompanying travel restrictions some companies still have in place.

Koslosky said the No. 1 priority regarding airport terminal development is next year’s ground breaking on a $90 million, 3,000-space parking ramp in front of the terminal. The Kent County Aeronautics Board is expected to approve the project and a funding package sometime this year. A few terminal gates also need to be added, one to Concourse B in 2006 and one to Concourse A in a 2007-08 time frame, he said.

“What’s happening is that we’re trending to larger aircraft because of our growth in passenger activity. The airlines have two ways of dealing with that — either add more flights or bring in larger aircraft with more seats. It’s forecasted that there will be some increase in frequency but more likely larger aircraft — and larger aircraft need more gates.”

The 11 passenger airlines currently serving the airport provide more than 140 daily arrivals and departures.

The now bankrupt ATA airline had more or less been Ford International’s equivalent of a low cost carrier. With the demise of ATA in March, airport officials will focus on monitoring fares of other airlines serving this market to see if they go up, Koslosky said.

“We’re also going to be identifying opportunities to go out and meet with carriers to deal with what might be fare disparities that develop over time.”

But in the long haul, whether there will be five airlines, 12 airlines or one airline serving Ford International, the airport is still going to need gates for airplanes to pull up to, ticket counters to process passengers and security systems to deal with passengers, Koslosky said.

“Our strategy is not to align ourselves to the airlines, but to align ourselves with the market and build to the market. It really doesn’t make any difference to us what airlines serve this market.”

That, he explained, is one of the reasons why Ford International doesn’t have lease agreements with the airlines. The airport instead issues individual airlines operating permits that allow them — with 30 days’ notice — to come and go at will.

The general aviation side of the business — all the other aviation activity outside of the airlines — is growing. The airport’s recently approved master plan, in fact, includes a number of projects that center on redevelopment of the airport’s general aviation services.

More and more companies are buying aircraft or time-share equivalents in aircraft, Koslosky noted. The tax advantages related to those kinds of transactions, plus the timesavings involved in skirting check-in and security processes, are driving the trend, he said.

He pointed out that until just a few years ago, Chicago was Ford International’s No. 1 origin destination market, and it was all business-related travel. Chicago is not even among the top 10 destination markets from Grand Rapids anymore. It seems that to save time, some people are choosing to drive to Chicago’s O’Hare Airport instead.

Today, the top 10 air travel markets from Grand Rapids are: Orlando, Las Vegas, Los Angeles, Tampa, Minneapolis, Phoenix, Denver, Dallas, Atlanta and San Francisco.    

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