NEW YORK — The Port Authority of New York and New Jersey will take over as the operator of Atlantic City International Airport as soon as July — a move that authority officials said could lead to a tenfold increase in the number of flights through the airport.
On Wednesday, Gov. Chris Christie approved the Port Authority's involvement in the South Jersey operation, which has struggled to retain carriers. Meanwhile, the Port Authority and the South Jersey Transportation Authority — the airport's current operator — agreed to move forward with negotiations in votes at two separate board meetings in New York City and Egg Harbor Township.
Terms of the arrangement have yet to be decided, but the Port Authority expects to have an operations agreement in place by July 1. After a still undetermined term length, the Port Authority will have the option to purchase SJTA's interest in the airport in Egg Harbor Township, Port Authority Deputy Executive Director Bill Baroni said.
“In the interim (the goal is) to bring the expertise of the Port Authority — the agency that has the busiest and the best airport system in the world — and add to that an airport that's got, quite frankly, extraordinary facilities,” Baroni said. “We're going to bring the benefit of an agency that truly knows how to run a great airline system.”
Bi-state legislation approved in 2007 allows the Port Authority to operate one airport outside of its jurisdiction in both New York and New Jersey. The arrangement announced Wednesday, however, differs from the authority's 2007 takeover of Stewart airport near Newburgh, N.Y., in which the authority's involvement began with a lease agreement and millions in infrastructure additions. There, air traffic fell nearly 55 percent within five years of the Port Authority's involvement.
Port Authority officials stressed that unlike Stewart, Atlantic City offers significant opportunity for air traffic increases drawing on its proximity to Newark and Philadelphia airports and its draw as a destination.
Perhaps foreshadowing the influence the Port Authority's involvement could have in Atlantic City, Air Canada also announced Wednesday that it is “absolutely prepared to consider” adding flights in Atlantic City given the Port Authority's involvement. The emailed statement from Air Canada Vice President of Corporate Strategy, Industry and Government Affairs Derek Vanstone was read aloud during the Port Authority's meeting. Spirit Airlines is currently the airport's only carrier.
State Assemblyman Chris Brown, R-Atlantic, said while it's clear that Atlantic City International isn't meeting its full potential, he wouldn't want to see the airport become a “stepchild” of the Port Authority, referencing the passenger declines seen at Stewart following the authority's involvement.
“I find it a great sign that Air Canada is showing interest in ACY,” Brown said. “I have faith that Gov. Christie wants Atlantic CIty to succeed, and the promotion of ACY is part of that effort.”
Brown noted that he had not yet seen a copy of the Port Authority's $3 million feasibility study that jumpstarted takeover discussions six months ago. The Port Authority did not release a copy of that study on Wednesday.
Atlantic City International saw nearly 1.4 million passengers in 2012, down less than 1 percent from its record set in 2011. Yet the airport, which just unveiled a $25 million expansion project adding three new gates and international flight capabilities, sees an average of just 27 flights through the airport each day. Port Authority officials said they believe under their leadership the airport could see as many as 300 flights a day with the existing infrastructure.
That would address the Port Authority's goal of freeing up already crowded New York-area airspace as well as the governor's goal of bringing in more visitors to Atlantic City through the airport. Currently, less than 1 percent of passengers who come through the airport are visiting Atlantic City.
In recent years, the airport's operating expenses have been about $15 million with as much as 25 percent subsidized with revenue from tolls on the Atlantic City Expressway, also operated by SJTA.
Some SJTA officials have expressed concern that without the airport, discussions about merging SJTA with the New Jersey Turnpike Authority, which operates the Garden State Parkway and New Jersey Turnpike.
During a press conference in Stone Harbor on Wednesday, Christie said he expected the two agencies to move quickly on a management agreement allowing for a airport takeover.
“I think that will give Atlantic City airport significantly more leverage to be able to do things that need to be done,” Christie said. “I think it will make the airport more active and more accessible, and that will help everyone in this region, not just Atlantic City.”
State Department of Transportation Commissioner James Simpson, who is also chairman of SJTA, said no jobs would be affected by the new arrangement, and more jobs could be added as a result. SJTA currently employs about 285 people. Daily operations of the airport are contracted to AvPorts. The contractor, whose contract expires in June, has about 50 employees.
Simpson likened the Port Authority to a hotel with more customers than it can handle.
“They know the industry. They have customers. ... I think it's a great opportunity to grow our airport,” he said. “The world has changed. We tried our best to bring other airlines to the area.”
Simpson, who usually attends SJTA meetings by video teleconference, made the trip to South Jersey for SJTA's meeting Wednesday. No other SJTA officials would comment.
Simpson noted that the agreement could double the amount of people who fly into the airport and add opportunities for adding cargo traffic. The Port Authority's involvement at Stewart airport led to increases in freight at that facility.
Staff writers Joel Landau and Lee Procida contributed to this report.
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