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Growth At BUF- Article, Southwest Affect

Thu Jun 14, 2001 2:55 am

Good article on how BUF has gone from a non-descript small regional airport to a hub of Low fares for Western N.Y. and Southern Ontario.

News Staff Reporter

Buffalo's airport, where travelers paid
the second-highest air fares in the nation four years ago, today is the hub for a huge travel market stretching deep into upstate New York and Southern Ontario.
Why? Because Buffalo Niagara International Airport is now among the cheapest places to fly into and out of in the country.

Thanks to fares driven down by powerhouse budget carriers Southwest Airlines and JetBlue, local development agencies now have a top-flight recruitment tool, area companies are enjoying big savings, and leisure and business travelers from a 100-mile radius are coming here to fly.

Buffalo ranked 64th in average air-fare costs in the last quarter of 2000, putting it in the bottom quarter of the 83 cities listed, according to the latest U.S. Department of Transportation report.

Those statistics confirm what the Niagara Frontier Transportation Authority and business leaders already believe: The decisions to build a new airport terminal and aggressively pursue low-fare airlines have paid off as no other community initiative in decades.

"There are few policy issues for which the results have completely met their goals as the air-fare issue," said Andrew J. Rudnick, president of the Buffalo Niagara Partnership. "This is an example of something we've done right."

The airport set a record last year with 4.25 million passengers, and the NFTA is projecting the count will surpass 5 million this year. Budget airlines now carry more than one-third of the passengers flying out of Buffalo.

"We are seeing an influx of traffic from the Rochester area and a major influx from the Niagara (Ont.) region, both corporate and leisure," said Jean M. Covelli, president of Travel Team.

The NFTA estimates that local passengers saved $112 million because of lower air fares during the past three years, based on what they paid on average for tickets before the current trend began.

"What was once an embarrassment for the city is now a tool for economic development," said Luiz F. Kahl, NFTA chairman.

Buffalo's current menu of low-fare airlines, which also includes AirTran, Vanguard, Shuttle America and Midway, has realized the promise of marketing studies prepared by the NFTA and Buffalo Niagara Partnership in the mid-1990s.

The Buffalo airport has become the air travel hub for a binational market that includes more than 8 million people. They live in such places as Hamilton, Ont., Jamestown, Erie, Pa. and two upstate cities that continue to be hammered by high prices: Rochester and Syracuse.

The latest federal survey listed Rochester as the third-most-expensive city and Syracuse as 20th.

"Southwest has really helped, because they go all over from Buffalo," said Bonnie Rademacher, vice president of Carlson Wagonlit Travel. "We even have people from Toronto coming here."

Paul Mountain, executive vice president of Niagara Airbus, a shuttle that carries travelers living in Southern Ontario to the Buffalo airport, said his company has increased the number of buses running to the airport from 12 a year ago to 18 today.

"People are finding Buffalo a lot easier because of the new terminal," he said.

Terry Slaybaugh, director of the Greater Rochester International Airport, said there is a strong public perception in his community that many people are now traveling to Buffalo to fly. His airport, however, has seen slight growth, with passengers there up 4 percent.

Rochester, which lost the race with Buffalo to lure Southwest, has landed JetBlue and hopes to persuade AirTran to come aboard.

"I'm hoping that third place will change," he said.

The area's low fares are beginning to "raise eyebrows" among industrial site selectors, according to Thomas Kucharski, who heads both Buffalo Niagara Enterprise and the Erie County Industrial Development Agency.

"It's a common denominator among site selectors, not only the costs, but the number of flights," he said. "Good air service creates a circumstance that allows us to further explain how competitive we've become."

For businesses already here, low-fare carriers have made their jobs easier.

HSBC Bank, one of JetBlue's biggest customers, has saved hundreds of thousands of dollars in travel costs since the New York City-based airline began service here in February 2000, said Tom Kaiser, the bank's senior vice president responsible for corporate travel.

"JetBlue has positioned us to be more mobile and agile as a company," he said. "Roughly half our travelers reduced their expenditures by half."

There were more than a few skeptics when the NFTA decided to scrap its awkward but functioning two-terminal setup and build a single modern terminal in 1992.

Later, it was the NFTA's turn to gripe when critics said lowering air fares was part of its job.

But under the leadership of former Chairman Robert D. Gioia and Commissioner James M. Wadsworth, who headed the aviation committee, the authority opened its new terminal in November 1997 on time and on budget.

Less than two years later, the NFTA, under Kahl, took a calculated risk and decided to spend $45 million to expand the facility in a bid to lure Southwest Airlines, the nation's premier low-fare carrier.

That gamble paid off when Southwest began flying here in October. Equally important, particularly for business travelers, was the arrival of JetBlue. The start-up airline provided a cheap, reliable connection to New York City, the area's No. 1 destination.

Kaiser said HSBC has hundreds of employees traveling back and forth to New York each week, all on JetBlue.

"It's helped us in terms of the amount of money spent on travel and it's also helpful to use JetBlue because of its superb on-time performance," he said.

The percentage drop in price for the Buffalo-New York route was the ninth-biggest in the country, according to the new federal report, falling from an average of $145 one-way in the fourth quarter of 1999 to $96 in 2000, a 33.8 percent decline.

The impact of Southwest's arrival has been even more dramatic.

The 70.5 percent drop in the average fare between Buffalo and Baltimore, Southwest's main local destination with seven flights daily, was the greatest in the nation, down from $193 one way in 1999 to $57 in 2000.

The number of local travelers going to Baltimore-Washington Airport skyrocketed from 9,660 in the last quarter of 1999 to 81,052 during the same period of 2000, a whopping 739 percent increase.

"We believe it's due to the "Southwest effect' in Buffalo," said Christine Turneabe-Connelly, an airline spokeswoman. "As we see the fares decrease, the number of passengers increase as well."

Brian Keating, regional president of HSBC Bank, said the success at the airport has shown the local community can get it right. He singled out Kahl for his work at the NFTA and Sen. Charles E. Schumer, D-N.Y., for particular praise.

"It's put Western New York back on the radar screen," Keating said. "It's made the area more competitive."

Link: http://www.buffalonews.com/editorial/20010613/1031329.asp

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RE: Growth At BUF- Article, Southwest Affect

Thu Jun 14, 2001 3:12 am

Nice read. Same thing happened here in Hartford (BDL) when WN came in 99. Prices dropped, new airlines came and passenger totals boomed.

A new terminal is going up here too.
Free-thinking, left-leaning secularist
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RE: Growth At BUF- Article, Southwest Affect

Thu Jun 14, 2001 9:01 am

Very interesting article. This past week I flew Southwest from Baltimore to Buffalo, on a trip to see my family in Rochester. At $87 roundtrip, which would have been $71 roundtrip had I been willing to leave six hours earlier, you can't beat it.

Rochester, though, still has a strong case for Southwest, and IMO has a good chance of landing the airline within the next few years, along with AirTran. Our 1-million population base is less than 200,000 behind Buffalo's, and our median income is much higher (high-tech industry base). Buffalo can draw from Southern Ontario and doesn't need us to make money for Southwest.

Fortunately, Rochester's local officials, especially Congresswoman Louise Slaughter, continue to aggressively woo Southwest, and AirTran as airport manager Slaybaugh noted. We're not giving up by a long shot.

The imminent failure of United's attempt to buy out US Airways should also make Rochester more attractive to Southwest, and probably Syracuse as well. As Stephen Wolf shrinks back US Airways to all but the highest-yield routes, all of the Upstate airports will probably see cutbacks by US Airways. In addition, Southwest serves Albany and Hartford at the same time; and is planning to serve Norfolk and Richmond at the same time as well. It is quite plausible that Southwest could, within five years, wind up at all four major Upstate airports and have 40-60 percent of Upstate air traffic.

One thing Rochester will need to do though is add gate space at its terminal. Although the 22 gates are only used to about 60 percent of capacity, they're all leased out (except the county gate which JetBlue uses). The Six Families are unlikely to sublease gate space to Southwest. We have the apron space--it's recently been expanded on both east and west sides. Probably a 2 or 3 gate extension to B Concourse would be needed for Southwest.

Need a new airline paint scheme? Better call Saul! (Bass that is)
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RE: Growth At BUF- Article, Southwest Affect

Thu Jun 14, 2001 9:08 am

ZRB2- Do you live in Buffalo? I do! Nice article, I read it today.

RE: Growth At BUF- Article, Southwest Affect

Thu Jun 14, 2001 11:18 am

I'm living in Erie, PA, and I have flown from BUF. Many of my reltives have too. It is worth the drive for the cheap fares. It has a very nice terminal too....brand new.
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RE: Growth At BUF- Article, Southwest Affect

Thu Jun 14, 2001 11:38 am

BUF is one of the most pleasant airports around. I am one of those people who travel from Toronto to take advantage of cheap fares from BUF. I once flew BUF-EWR-SJC at $278 CDN- which is less than $190 US. BUF should be the model for all other small airports looking to revamp themselves.
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RE: Growth At BUF- Article, Southwest Affect

Fri Jun 15, 2001 9:30 am

Flight152- I'm from Buffalo and lived there until I moved away after college. Now I'm in Maryland. I like to check out the Buffalo News website to stay in touch with my hometown.

Jim- I can see a possibility of Southwest serving ROC someday but only if they see market share from that area avoiding the drive to BUF. 60 miles is not much separating the 2 airports...especially since the NYS Thruway is a pretty easy ride (unlike I-95 between DC and Richmond on a busy day!) Syracuse doesn't deserve them ahead of ROC, but geographically it might make more sense. I can't see enough traffic through SYR.
In the meantime...JetBlue to IAD would benefit both cities, and us!

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