Atlantic City International Airport entered a new era Monday - one in which a major New York City-based authority will be at the helm of operations in an attempt to lure new carriers to the region.
Monday marked the start of an operations agreement between the Port Authority of New York and New Jersey and the South Jersey Transportation Authority. SJTA has agreed to pay the Port Authority $500,000 a year to operate the facility in an arrangement that leaves the Port Authority responsible for marketing and air service development, among other things.
The Port Authority, SJTA and a mix of state and local officials held a news conference Monday at the airport to mark the official start of the new relationship.
"We're going to be working around the clock to make sure we're doing everything we can do to grow this operation," Port Authority Deputy Executive Director Bill Baroni said Monday. "There's not a turn-key fix, but we will be working on building our relationships to make this the most successful partnership there can be."
Speculation over a potential transfer of authority or sale of the airport had gone on for years. The idea gained momentum last September when the Port Authority authorized a $3 million study to determine whether assuming control of Atlantic City International could be fruitful for the authority. Legislation approved by both New York and New Jersey in 2007 allows the Port Authority to take control of one airport outside of its jurisdiction in each state.
New Jersey Gov. Chris Christie, who approved the new relationship earlier this year, has said improving air transportation to not only Atlantic City but all of South Jersey is a priority. On Monday, Baroni said Christie is not only focused on the importance of the airport from a tourism perspective, but also also because of the potential for job creation in the region.
Sam Donelson, acting executive director of the South Jersey Transportation Authority, said the two authorities have been working together for months on an agreement that will ensure each group's interests are protected in the new relationship.
The arrangement between the Port Authority and SJTA extends for 15 years with the terms of the agreement renegotiated every five years. The Port Authority can attempt to purchase SJTA's interest in the airport at any time.
While both authorities have continuously touted their cooperation, no specific commitments have been made regarding when additional carriers might be added and how quickly. Air Canada announced in March that it would consider adding flights in Atlantic City, but to date, no new carriers have been announced.
Donelson provided what he called "a dose of reality" in his comments, saying that all parties involved understand how difficult it can be to grow air service. SJTA is acutely aware of the struggles involved in attracting carriers to the South Jersey airport sandwiched between Philadelphia International and Newark Liberty airports.
"We will be working hard for you," he said.
Atlantic City International currently has one scheduled carrier - Spirit Airlines - and the operation has never turned a profit under SJTA control. About $3 million a year in toll revenue has been used to supplement the airport's roughly $15 million operating budget.
The Port Authority's $3 million study concluded that increased flights to various destinations in Florida as well as Las Vegas could draw more passengers to Atlantic City. Neither the study nor Port Authority officials have addressed whether certain destinations will be targeted because of their potential impact on Atlantic City's tourism market.
Less than 1 percent of visitors to Atlantic City come by air each year, according to SJTA data.
U.S. Rep. Frank LoBiondo, R-2nd, said those who are from the region have understood the airport's potential, especially given its unique location on the ground with the FAA's William J. Hughes Technical Center. However, getting others to see the airport's unique benefits has been challenging.
"There's not a campus like this in the entire United States of America," LoBiondo said. "I don't think we have scratched the surface of the economic potential that could be reached."
In recent years, about 1.4 million people have traveled through Atlantic City airport each year. In the first quarter of 2013, however, the airport has fallen off pace seeing a 28 percent decline in passengers compared to the first quarter of 2012.
The Port Authority of New York and New Jersey also operates Newark Liberty, JFK, LaGuardia, Teterboro and Stewart airports and has a $2.57 billion operating budget.
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