By John Chambliss
Lakeland Linder Regional Airport turned a profit in 2012 for the first time in eight years.
The $153,000 profit comes at a time when Lakeland Linder lost its only commercial carrier and faces questions about the future of commercial air there.
“Obviously, the sky isn’t falling,” Lakeland Linder Director Gene Conrad said of the profit. “There is a positive feel and push for people to be here.”
The airport made money by increasing its occupancy rate for the number of tenants who lease space there. In less than three years, the rate has gone from 70 percent to 90 percent, he said.
Conrad, who started in January 2010, said the airport has become more business friendly by reducing minimum standard restrictions for incoming businesses that rent space. For example, the city no longer dictates hours a business must be open or how many square feet of space must be rented.
There are two ways the airport can make money. This year, 90 percent of its money came from leasing space to businesses. If commercial air were to begin, the airport could charge an airline landing fees and rent space inside the terminal. In addition, the airport would make a percentage of gross receipts from rental car companies if an airline was flying into Lakeland Linder.
But questions persist about whether commercial air service will resume after Direct Air left in March. The Myrtle Beach, S.C., airline abruptly canceled all its flights, including service to Lakeland, on March 12. The discount airline filed for Chapter 11 bankruptcy a few days afterward. Direct Air officials blamed “rising fuel costs and other operating expenses.”
Early next year, a consultant and Conrad plan to meet with officials from both US Airways and Delta Airlines. Their goal will be to convince the airline officials that Lakeland can sustain a big airline despite previous failures and its proximity to Tampa and Orlando.
Conrad said he plans to stress the convenience of a small airport and that Lakeland is the biggest city in Florida without commercial service. Initially, parking at the airport will be free.
He also will come equipped with lots of data.
NUMBERS GOOD, LOCATION A PROBLEM
At a recent meeting, City Commissioner Phillip Walker asked Conrad if progress was being made to resume commercial air service.
Conrad said yes.
Data from the Airline Reporting Co. compiled by a consultant shows that from July 2011 to June 2012, there were an estimated 31,968 bookings in a 20-mile radius from Lakeland Linder on Internet-based travel web sites, such as Expedia or Orbitz.
The consultant will cost the city about $20,000 to $25,000.
The numbers, which don’t include bookings made through airline websites, were good, Conrad said.
Lakeland ranks third among Pensacola, Fort Walton Beach, Melbourne, Gainesville, Tallahassee and Daytona Beach. Both U.S. Air and Delta fly out of the other cities.
Pensacola, with 39,721 bookings, and Fort Walton Beach, with 33,602, were ahead of Lakeland.
“They have Eglin Air Force Base,” Conrad said of the No. 1 and No. 2 cities. “We’re competitive with those guys, and we don’t have a large military base.”
Conrad said commercial air service that focuses on businesses could lead to big things for the city.
“We have reached the point where we are big enough to sustain it,” Conrad said of Lakeland. “It would help future businesses wanting to locate here.”
Despite the good numbers, Lakeland Linder may be wasting its time meeting with the two big airlines, said Robert Herbst, an airline analyst and founder of airlinefinancials.com.
“I would be pleasantly shocked if they were successful in getting any type of real airline service in there,” said Herbst.
He said Delta or US Air wouldn’t take service from Tampa or Orlando to start new service at Lakeland. “They would cannibalize traffic they already got,” Herbst said.
Delta or US Air wouldn’t be able to operate with anything less than three flights a day.
That’s expensive, Herbst said. Many communities Lakeland’s size no longer have service because of the price of fuel, which is about 40 percent of the average ticket.
“Any airline that is starting up and has empty seats is paying an exorbitant amount,” Herbst said. “Getting started is so expensive.”
He said Lakeland’s best chance for commercial air would be Allegiant Airlines, a low-cost airline based in Nevada. The problem with bringing Allegiant to Lakeland would be similar to US Air or Delta, Herbst said.
The airline already flies from airports in Sanford, northeast of Orlando, and the St. Petersburg/Clearwater area.
Conrad said he doesn’t want Delta or US Air to shift any of its service from Tampa or Orlando. He said he plans to tell the two airlines that Lakeland can stand on its own.
Of the nearly 32,000 bookings, Conrad said 70 percent flew from Tampa and 30 percent left from Orlando. Sixteen percent flew Delta, while 84 percent flew another airline.
Conrad said he thinks many Polk County residents would choose flying out of Lakeland Linder on Delta or US Air instead of driving an hour to Tampa or Orlando, where parking is pricey and security lines are long.
Commercial air service has a bumpy history in Lakeland.
Before Direct Air, the city had at least five commuter air services at different times. Most recently, COMAIR pulled out of the area in 1988. The commuter air service to Orlando lasted only three months before COMAIR officials decided to end it.
Those flights were designed to feed passengers to Delta planes in Orlando.
In the early 1980s, Allegheny provided a tie-in to US Air in Orlando.
GOOD FINANCIAL NEWS
Direct Air had a minimal impact on Lakeland Linder’s $3.9 million in revenue this year.
The airport made $361,000 off Direct Air but spent $350,000 on marketing.
With the additional passengers walking through Lakeland Linder, the airport qualified for two separate $1 million federal grants that will be used in 2013 and 2014. Conrad said the money will be used to fix a runway and a ramp. Lakeland Linder will still receive the funds even though Direct Air left.
For years, the airport has struggled to make money. In 2010, it was $469,078 in the red, and 2011 was worse at $679,991.
In addition to more lease money from buildings, the airport has cut costs, Conrad said. Turning off runway lights at night saved the airport about $12,000 a year, he said. Previously, the lights were on all night. Now, the lights are off but can still be activated by an incoming aircraft.
Tailwheels Etc. owner John Amundsen said airport officials have been accommodating since the business moved in over the summer after a spat with the city of Winter Haven, where it previously operated.
The flight school business, which makes about $3 million in gross revenue annually, leases a hangar and about 3,000 square feet of office space.
It pays about $6,000 a month, but the airport covers most of the additional costs, such as utilities.
“They listen to our needs and try to accommodate us,” Amundsen said.
Conrad said there had been a perception that the airport wasn’t business friendly.
City Commissioner Don Selvage credited Conrad, 37, with turning that around.
Problems at the airport were a big issue when Selvage was running for the City Commission in 2009. He said many of the tenants at the airport wanted a change in the way Lakeland Linder was run.
It did change when Conrad started, Selvage said.
“The issues dissolved with the hiring of Gene,” he said.
Lakeland Mayor Gow Fields said Conrad’s knowledge of aviation has helped bring in new tenants. Conrad had worked at Dayton International Airport before coming to Lakeland.
“His skills were what we needed,” Fields said. “He’s created positive feelings about the possibilities at the airport.”