Begging for Higher Fares?March 5th, 2010 at 2:42 pm by Anne Schieber under News
Maybe it’s the airport’s fault that fares in Grand Rapids are so high. That’s what James Terlecki was wondering when I was compiling my story on the AirTran effect last month. Terlecki knows fares like no other. He has flown hundreds of thousands of miles in his lifetime, many flights out of Grand Rapids. Like many, Terlecki has been frustrated by rising fares and declining service out of the Ford Airport. He’s not sure if the introduction of Air Tran in May will knock down fares as much as everyone’s expecting.
Terlecki says it may be time to reevaluate the way West Michigan funds its biggest airport. It is one of the few airports in the country that does not impose a county or regional tax to cover operating expenses. Instead, it relies on the fees it charges airlines, concession stands, and parking. Forty two percent of the airport’s operating budget comes from the airlines alone and Terlicki says that’s too much for the airlines to bear given today’s tight profit margins. Terlicki believes the airlines do what any business would do in that situation – pass the fee onto its customers.
Terlecki and others have raised the idea of imposing a couple of dollar tax on hotel rates, for example, and using that money to help subsidize airport operating expenses. What’s more, he’d like to see the tax apply to hotels in the entire 9 county region that the airport supposedly serves.
“That should do it,” he says.
Terlecki says he has brought the idea up at several commission meetings but there’s been little interest. He believes the airport authority does not want to lose control. If you tax a broader region, those local governments could then have say in operation.
Brian Piccolt, the Ford Airport’s Financial chief says in his time he has never heard the airlines complain about landing fees. He says they are less than 50 dollars a square foot and that they are only 4 – 5 percent of an airline’s total cost in doing business in Grand Rapids. There is also a belief that those who use the airport should be the ones who pay for it. Even if it means having to cover the airline’s higher operating expenses to do business out of Ford. For now the issue is in a “holding pattern,” but if Air Tran, Frontier, Allegient don’t have and impact soon, there is no doubt that discussion on this issue will “take off.”