Airport formalizes incentive program

HIGHFILL — The North- west Arkansas Regional Airport board Wednesday formalized the airport’s incentive program to attract new airlines or new routes.

“This just formalizes what we’d like to see as a tool in our toolbox to continue to market to these folks and hopefully get somebody in here that’s new and continue to grow the routes that we want,” said Kelly Johnson, airport director.

The move authorizes staff to negotiate with airlines and offer up to $100,000 in marketing money or building renovations to accommodate a new carrier or expanded routes. Scott Van Laningham, executive director, said an incentives package would be part of any presentation made to a potential new entrant to the airport.

Airport officials have been trying to attract a new, low-cost carrier for several years. XNA is served by American Airlines, Delta Airlines, United Airlines, and Allegiant Airlines, with non-stop services to 14 destinations.

“We’re talking about paying cash out for marketing, potentially paying cash out for terminal renovations and then waiving fees,” Johnson said.

Johnson said the amount paid would be prorated, based on the frequency of service and other factors. Existing carriers would not get the full amounts for adding routes.

Johnson said some airports have incentives of up to $250,000. Tulsa and Little Rock are looking at updating their incentive programs, she said.

The airport has had an informal incentive program since 2003. The board’s move put the practice in writing.

Johnson said the process since 2003 has been to award $25,000 for a new destination. In October 2015, XNA waived landing fees for one year for United Airlines when it added a route to San Francisco. The airport has paid incentives to add some routes over the years, including Los Angeles, Phoenix, Las Vegas and Salt Lake City.

The incentive program cannot be used to entice an existing carrier to stay at the airport, Johnson said.

Under federal law, terminal and landing fees to airlines can be waived for a year for new service to an existing market and two years for a new carrier or new service to a market not currently served, Johnson said.

“If we had a carrier in here operating three times a day with a 737, that equates to $ 1.4 million over a two year period,” Johnson said.

“That’s a big deal, and we are legally allowed to do that. That’s not money that we are losing. After the two year period that would be new money to us in rentals

and fees.”

Johnson said the airport would also gain income from parking, concessions, passenger facility charges and ramp charges paid for passengers carried.