Local and state officials say they’re encouraged by the Port Authority of New York and New Jersey’s approach to taking control of operations at Atlantic City International Airport, a far more collaborative method than was seen the last time the authority took over an airport.
Gov. Chris Christie gave approval earlier this month of the New York City-based Port Authority’s involvement in the Egg Harbor Township operation, with the hope that the management change could spur additional carriers to come to the airport.
However, unlike the Port Authority’s involvement in Stewart International Airport, a tiny operation about 70 miles north of Manhattan, Atlantic City International will not be immediately turned over to the authority through a lease or sale agreement. Rather, the Port Authority and the South Jersey Transportation Authority, which currently operates the airport, will negotiate an operations agreement expected to transfer management of day-to-day operations for a specified length of time.
“Stewart and Atlantic City are very different airports in different situations. Atlantic City is already a destination in itself, and it’s part of an entire aviation complex down there,” Port Authority Deputy Executive Director Bill Baroni said. “It’s so important that we work closely in connection with what’s already established.”
At the end of the operations agreement term, the Port Authority will have an option to buy SJTA’s interest in the airport, but some officials speculate that purchase will never happen. Among them is Assemblyman John Amodeo, R-Atlantic, who said the Port Authority’s involvement can put the local airport “on the map” without ever engaging in a lease or sale.
“The only thing that’s going to happen here is that they’re going to bring a management team in. They have experience. It’s not to say we don’t have it here, but I think it opens up other dimensions for us and hopefully still allows for a degree of cooperation,” Amodeo said, adding that he believes a 10-year management plan is anticipated. “My understanding is they’re treading on this lightly right now.”
The scenario differs from the arrangement seen at Stewart in 2007. There, shortly after legislation was passed giving the Port Authority the power to operate two airports outside of its jurisdiction — roughly a 25-mile radius from the Statue of Liberty — the authority signaled a long-term commitment in taking over a 93-year lease agreement and pumping millions for capital investment into the operation.
That won’t happen in Atlantic City, at least not in the near future. Port Authority officials point out that the airport isn’t in need of capital investment. Just last year, the SJTA completed a $25 million expansion project increasing the number of gates from seven to 10 and adding the capability for handling international flights.
Baroni said the Port Authority’s relationship with Atlantic City will be different for a number of reasons, one being the airport’s location on the grounds on the Federal Aviation Administration’s William J. Hughes Technical Center, where it will be important to build on established relationships. The SJTA owns about 2 percent of the more than 5,000-acre site, including the terminal. The rest, including runways and taxiways, is leased from the FAA.
Since entering into the decades-long arrangement at Stewart, air traffic has fallen 60 percent, according to the Port Authority’s most recent statistics. In 2012 alone, the air traffic declined 12 percent, leaving Stewart as the only authority airport to operate at a deficit in 2012.
Stewart also hasn’t fulfilled the goal of diverting any significant air traffic from the crowded New York City airspace. The 413,000 passengers who used Stewart in 2011 — less than half of the passenger count in Atlantic City — account for just a fraction of the 106 million people who traveled through Port Authority airports that year. The Port Authority also operates JFK, LaGuardia and Newark Liberty airports, as well Teterboro airport, which does not offer scheduled service and acts as a reliever airport. Newark and JFK are each expected to see surplus revenues of more than $400 million this year while LaGuardia should be up more than $100 million.
SJTA Commissioner Bob McDevitt, also president of casino workers union Local 54 UNITE-HERE, acknowledged that there has been some apprehension about a New York City-based mega-authority with a $2.57 billion 2013 budget taking over a local airport more than 120 miles away. But having “home grown” management might not matter in this case, he said.
“I’m not going to be parochial about this. It’s easy to sit here in South Jersey and say, ‘It’s a South Jersey airport, and it’s got to be run by South Jersey people,’“ McDevitt said. “I don’t think the average guy gets involved in the parochial stuff. … Politicians like to control things. Normal people like to see those things produce.”
Officials also pointed to the possibility that the Port Authority may look to add freight operations as a positive development. The authority has had success with cargo operations at Stewart, recently calling increases there the only bright spot in the airport operations. Cargo operations at Stewart, which was already equipped with cargo facilities when the Port Authority took over, grew 15 percent last year.
Pinelands permits held by the SJTA designate land along Tilton Road for a cargo facility, but despite attempts over the years to garner interest, SJTA never has been able to attract a carrier such as FedEx or UPS, SJTA spokesman Kevin Rehmann said.
In some cases, freight facilities are constructed by the airport’s owners, or a company might offer to use its own financing to build a facility at an airport, Rehmann said.
Baroni would not comment on specific plans for freight operations in Atlantic City, but noted cargo is “clearly an option.” At a press conference after the Port Authority’s meeting earlier this month in New York City, Baroni noted that Atlantic City currently averages 27 flights a day but has the potential to handle 300 with the existing infrastructure.
Those estimates do not include the addition of freight, Baroni said in a recent interview, adding that he wouldn’t comment about how quickly the number of flights could multiply as the authority wouldn’t want to hamper future negotiations.
Also unclear is the financial arrangement that will emerge between the Port Authority and SJTA. The Port Authority has not yet said whether it plans to put any money into the operation, and what, if anything, SJTA would be expected to contribute. There will not be any layoffs as a result of the operations agreement, Baroni said.
“In order for this to work, it’s got to be an economic benefit for SJTA. We can’t enter into something that costs us more money and brings less revenue,” McDevitt said.
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