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Vol. 5, No. 12, December 2008, Featured Articles

Flight Maneuvers

Tue, Nov 25, 2008

Working the runway: Atlantic City is campaigning for more commercial air service

Flight Maneuvers
We can’t be a world-class destination if the world can’t get to us,” says Assemblyman John Burzichelli. As chairman of the state’s Tourism and Gaming Commission, the Gloucester County Democrat supports growing efforts to increase air service to Atlantic City International Airport (ACY).

“It’s pretty obvious,” Burzichelli says. “If you’re going to fill Atlantic City in February, we can’t tell travelers, ‘You have to go to Philadelphia first, and by the way, if it snows, it may take you four hours to get here.’ We want these people off the plane and in the city, so their money ends up here.”

With the tough economy getting tougher and Atlantic City casinos facing more out-of-state competition, the convention business—busiest at mid-week in the off-season—could be the city’s best hope for sustained cash flow, revenue that’s not as sensitive as gaming revenue to the ebbs and flows of a stalled economy.

Plus, the city is ideal for conventioneers, and the airport is equipped to bring them in, says Jeff Vasser, executive director of the Atlantic City Convention & Visitors Authority.

“It’s just logical,” Vasser says. “Philadelphia is so overwhelmed. Newark is overwhelmed. We have a jewel down here that can grow. All we need is to get some of these airlines on board.”

To persuade more carriers to make Atlantic City International an East Coast destination, an unlikely coalition has formed that includes the ACCVA, the South Jersey Transportation Authority, the Casino Reinvestment Development Authority, retail and entertainment concerns, and the casinos. In the past, these parties have not always agreed, but as marketing partners, they share one goal: to expand passenger service to ACY and bring in more visitors.

The casino group consists of every operating property as well as those waiting in the wings (Pinnacle, Revel and Coastal Development, which hopes to turn Trump Marina into Margaritaville). Other coalition members include the Pier Shops, Chelsea Hotel and the Cordish Group, which runs Atlantic City Outlets.

“The airlines are very risk-averse right now, and having this consortium will show them we will in fact buy seats and package them with rooms for the inbound market on a scheduled basis,” says SJTA Executive Director Bart Mueller.

The convergence of several factors could enable the city to lure airlines here, even as they cut service to other cities.

“We are now at a tipping point,” says Maureen Adams, CFO for Harrah’s Atlantic City. “For the first time in its history, Atlantic City has 18,000 casino hotel rooms, more non-gaming than ever before, and the appropriate level of retail to position it as a destination market. We can handle larger groups and more conventions than we ever have in the past. But we lack the infrastructure to bring them.”

Despite the economy, or perhaps due to it, the airlines may be more receptive to the Atlantic City plan, Adams adds.  

“A lot of them are looking for more short hauls, so what we’re proposing seems to be more palatable than it has in the past,” she says. “We feel we have a better shot than ever to convince them there’s opportunity here.”

Kim Townsend, CEO of Pinnacle Atlantic City, points out that more than 66 percent of the population lives east of the Mississippi, with one-fifth in the Northeast and Mid-Atlantic regions. These potential customers “are so close, yet so far away because right now there’s no easy way for them to get to us,” Townsend says. “We are at a disadvantage as it relates to the meeting market segment, and when the economy gets tight, convenience prevails over destination. Adding air service will put us on the map for thousands of meeting and convention planners. Right now, we’re not even on their radar.”

Currently, only Spirit Airlines has commercial passenger service to ACY. Delta, which served Atlantic City from 2002 until early this year, bailed when the company went bankrupt.

Meantime, the airport here is wholly capable of handling major carriers and increased traffic, says Mueller. With a main runway of 10,000 feet and a secondary runway of 6,400 feet, “We are by contract with NASA an alternative landing site for the Space Shuttle,” he says. “We do about 120,000 airfield operations a year, and we could easily do 500,000. We want to attract carriers that have a hub with frequency and connectivity to the national system.”

In preparation for that day, the airport has undergone big renovations. A $26 million, 1,400-space parking garage has just opened. An interior overhaul of the airport should be complete by year’s end. An expansion of the apron would allow ACY to build an additional concourse and jet bridges. The missing link is service.

“Right now, people who come here are forced to fly into Philadelphia or Newark and find ground transportation,” says Mueller. “That’s not fair to the casino industry, which has invested billions and continues to invest billions, even in the worst of times. We have to convince the airlines.”

To do so, Vasser promises a presentation that will hopefully show commercial carriers that people from Atlanta, Chicago, Dallas and other major cities will come here if they can do so without a hassle.

“Six years ago, the limiting factor here was a lack of committable hotel rooms,” Vasser says. “Now it’s air service. Everything else is in place: hotel rooms, a great convention center, restaurants, shows. Everything is in place to bring a national convention here except the transportation.”
 
“We have evolved beyond a day-trip market,” says Adams. “Now we’re able to go out and attract new business.’’

If the coalition succeeds, enhanced air service could be possible as early as 2009.

“For me,” says Adams, “it would be a fabulous example of what we can do when we work together.”

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