‘A Lot Going on Here’: A Q&A with Cherry Capital Airport’s executive director
There’s plenty happening at Cherry Capital Airport. Between the potential transition from a two-county-operated facility to an airport authority model, a record year of passenger traffic, new carriers and routes and airport improvements, Executive Director Kevin Klein is ready to talk about it all.
TCBN: First let’s talk about all the new routes and carriers you’ve added.
Klein: Yes. We started off with a new carrier in March with Elite (Airways) nonstop to Sarasota. That started out weekly and then in May went to twice a week. They operated with some success but the biggest issue was brand awareness – getting people used to the name. We’re waiting to see what changes they have in store in 2020. They’ve talked about Florida and different cities throughout the Midwest and they recently announced a partnership with the newly formed Midwest Express Airlines.
American (Airlines) going to Charlotte for the summer was fantastic, hitting a major city and one of the fastest-growing hubs for American. A great catch for us. Then American extended Dallas from ending in September to October, adding whole month. (For) core routes for Chicago, they upgraded to larger jets.
United launched Washington Dulles (Airport) in June through the end of August. It was received very well and we really saw additional seats into our market: business and tourism travelers.
Then Allegiant (Airlines) announced three Florida destinations. It was fabulous and we were shocked; we didn’t expect so many cities right at the start. In August they also announced Phoenix; only one of those four routes is seasonal. The rest are year-round.
We started working with carriers coming out of summer … met with United and then American via conference call. American’s words were, ‘We love TC and we want more of it.’ Then added Philadelphia and (Reagan National Airport in Arlington, Virginia) to schedules … for next summer. United is looking at opportunities and how to improve what they already had last year. One potential is at Newark or extending the Denver flight beyond Labor Day. We are likely to get settled and solid by first of April.
At Delta we see them continuing to add more seats, from 50-seat planes to larger aircraft. Delta about 40/American/United … but if you look at Allegiant they’ll be fighting American for second spot.
We are always meeting with others and will continue to do that. Everybody is watching how Allegiant performs.
TCBN: I assume we can’t expect that same pace of growth in 2020?
Klein: Well, northern Michigan as a whole is growing, but at what point will we see these kind of additions slow down? I do think you’ll see a more conservative approach. We basically doubled our cities in 2019: We had nine and added six more and now we’re adding another two. I mean, wow. But what I see happening is with the core carriers you’ll see improvements more in the shoulder and winter months to their schedules and then product improvements, too.
TCBN: Do the core carriers get concerned when the discount carriers first come to a new city like Traverse City?
Klein: What their arrival does is stimulate new flyers. People who might have done staycations or home improvement projects might now decide to go to Florida because of the low prices. So it creates a new market and is good for all carriers here. And they still have advantages in markets like Los Angeles or Nashville. Plus they have frequent flyer loyalty, so there’s a true following of those carriers by their customers.
TCBN: What about airfares overall? What are you seeing or predicting?
Klein: In terms of a global view of rates, they continue to decline, partially because of lower fuel costs. And nationwide you’re seeing more high-density markets getting ultra low-cost carriers. But in a place like the middle of North Dakota, you’ll still see high rates. Some of that is the regionalization of air services: Michigan has 16 or 17 air carrier airports. You’re starting to see a push of airlines themselves regionalizing their service.
TCBN: What about on the property here at the airport? You’re exploring solar?
Klein: Yes, we’re vetting out different concepts, trying to understand their pricing models versus the land cost. Trying to determine the best use of the property. So we will interview the three top bidders, with a goal to start in 2020.
TCBN: And retail and development?
Klein: What we’re doing is a multi-step process. We’ve engaged in a strategic/business plan to get to our eventual master planning process that will begin probably in 2023. We’re currently looking at all the areas available for business opportunities, and that could include retail, warehouse, hangars, manufacturing … a global look. That’s being studied right now.
TCBN: What does development at the airport mean for the flyer or taxpayer?
Klein: There’s currently no local tax used to support the airport, so we’re looking at how to keep the airport self-sufficient. We operate on a fee-based system with rent, landing fees, parking lot fees and rental cars. We generate about a $6.8 million annual budget; 46% of that is service from non-aeronautical leasing and fees. If we didn’t have that, we would have a local millage, so the big thing for the public is those users and renters offset overall costs. If we have more users, we can keep our costs to operate lower and the costs for airlines here lower.
Inside the terminal, Cherry Country Café is doing all kinds of new products and foods and now looking at allowing ordering throughout the terminal. In the parking lot, because of demand, we added a temporary 130-space lot with the idea of expanding the long-term lot and adding a new 260-space lot. So currently we have 800 spots and we’ll be adding 430 more. That will happen in 2020. And the parking management and operation contract recently went out to bid, so there are potential improvements coming there too. Also there will be newer TSA machines coming in 2020 with higher throughput capabilities, so that should speed that process.
TCBN: Anything else?
Klein: We’re also studying the terminal as part of our airport improvement grant to see if we need or can justify a terminal expansion. So yes, lots going on here.