Fresh off the announcement that United Airlines will fly to Atlantic City next spring, airport officials are hoping to attract even more flights to an underserved market by dangling a package of financial incentives. Two government agencies that oversee Atlantic City International Airport are developing a program that would give airlines financial support in return for new domestic or international flights.
The South Jersey Transportation Authority, the airport's owner, was supposed to approve the air service development agreement at its monthly board meeting Wednesday, but it was pulled from the agenda for further review by attorneys. Sam Donelson, the authority's acting executive director, said there were no problems with the agreement that might prevent its approval in the near future.
Donelson said his agency has been working closely with the Port Authority of New York and New Jersey, the airport's operator, to craft the final terms. He declined further comment, referring questions to the port authority for details on the agreement. Port authority officials weren't immediately available for comment after Wednesday's meeting.
The two agencies are looking to replace the airport's old subsidy agreement with a new deal that is broken into two separate incentive packages. Although terms have not yet been released, a brief written summary of the program was included on the transportation authority's meeting agenda.
The first incentives package would be for two years for scheduled airlines that provide nonstop service to a new city. There would be three types of air service eligible for incentives under this plan: Domestic flights that operate year-round, domestic service that is seasonal, and international flights on a yearly basis.
"The goal of this program is to mitigate the start-up risk for domestic and international service and provide a realistic outbound per-seat marketing support," the summary said
The second incentives package is for public charters that would fly international flights into Atlantic City. No details on this type of incentives plan were included in the summary.
Airport officials hope to capitalize on momentum created by Gov. Chris Christie's announcement last week that United will launch service to Atlantic City from Chicago and Houston beginning April 1. United's flights are seen as a huge lift for an airport currently served by only one scheduled airline and struggling with a 25 percent decline in passenger volume this year.
The United deal represents the first airline recruited by the port authority since it took charge of Atlantic City International's operations in July. It is not yet clear whether United would receive incentives under the airport's new program.
The port authority, a transportation giant, is expected to use its clout in the airline industry to attract other airlines to Atlantic City.
"I said on Day 1 that we are working around the clock to bring air service to Atlantic City," Bill Baroni, the port authority's deputy executive director, said in an interview last week. "Our goal is to bring more air service to Atlantic City."
The port authority also oversees the Kennedy, LaGuardia and Stewart airports in New York and the Newark and Teterboro airports in New Jersey. Its new role as Atlantic City International's operator is part of the governor's five-year initiative to revive Atlantic City's economy by boosting the casino, tourism and convention industries. United's new service is being counted on to bring new conventions and overnight guests to the resort town.
Atlantic City has had a difficult time attracting and holding on to major airline service over the years. Spirit Airlines currently is the only scheduled carrier serving the airport. Delta, US Airways and Continental are among the big names that have come and gone, finding it too hard to make profits in Atlantic City's challenging marketplace.
The South Jersey Transportation Authority has given airlines millions of dollars in subsidies in the past in return for scheduled service. For instance, AirTran received about $1.5 million in 2010 and $2.5 million in 2009 for flights between Atlantic City and Atlanta. AirTran pulled out of Atlantic City in January 2012 after it was acquired by Southwest Airlines.
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