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Is MassPort Mothballing Worcester Airport to Protect Logan Revenues?

Friday, August 03, 2012

 

As Worcester looks to replace Direct Air at the Worcester Regional Airport, MassPort may have other motives for keeping the airport mothballed.

An investigation by GoLocalWorcester finds that the revenue generated by MassPort, the owner and operator of both Boston Logan and Worcester Regional airports, is significantly higher when a consumer flies out of Boston versus Worcester. MassPort officials may be motivated to keep the eye on the Logan prize at the expense of a viable Worcester airport.

According to MassPort's financial documents, Logan generated $492.6 million, or about 85 percent, of MassPort’s revenue last year. MassPort’s derived revenue is generated through fees at all of its facilities, including those for parking and aircraft landing, which are much higher in Boston than in Worcester. It also makes money from property leases, investment returns and federal grants.

Parking in Worcester costs $7 a day or $42 a week compared with Boston’s $27 a day or $189 a week.

Landing fees at Logan are nearly four times higher -- charging $4.26 per 1,000 lbs with Worcester charging only $0.96 per 1,000.

Logan also charges $1.27 for baggage screening, a fee that is not currently collected in Worcester.

Central Massachusetts fliers traveling from Worcester and shifting out of Logan would cost MassPort millions in revenue.

MassPort’s Work in Worcester

When MassPort became the owner of Worcester Regional Airport in 2010, Direct Air, a non-traditional airline, began flying out of Worcester. Before its collapse Direct Air’s business model was very different. Rather than owning planes or hiring pilots, Direct Air chartered planes when passengers booked tickets. GoLocalWorcester was first to report the airline’s collapse in March.

State Rep. James O’Day (D-West Boylston) said that while he would prefer not to look back, he thinks Direct Air was wrong for Worcester.

“It would be easy for me to second-guess that now,” O’Day said. “I think MassPort has done an OK job. Everyone wants to see another commercial airline, but we need to be smart so we don’t get into a situation where it isn’t successful.

Since the departure of Direct Air, Worcester’s Regional Airport has once again been fighting to bring in another commercial airline.

“It would be a big help financially for MassPort to have service in Worcester,” said Fred Mulligan, a member of the MassPort Board. “It doesn’t cost less to operate now. We’re maintaining all of the infrastructure to have commercial service.”

After losing Direct Air, MassPort was able to reduce its operating budget in Worcester by $564,000 for Fiscal Year 2013, but MassPort says this isn’t necessarily a savings.

“MassPort operates Worcester Regional Airport to support commercial passenger service,” said Richard Walsh, a MassPort spokesperson. “We’re not saving money from the loss of Direct Air, rather we continually review the budget and make adjustments to expenses as appropriate.”

He noted that MassPort estimates a loss of approximately $640,000 in revenue associated with Direct Air shutting down.

In terms of finding a new commercial airline, MassPort officials said they can only do so much.

“It is more up to the airlines than it is to MassPort,” Mulligan said. “Getting commercial service is going to take time…I think if you think long term it is a good news story, but it requires a little patience.”

But since the demise of Direct Air, JetBlue, which operates out of Logan, announced that they are going to begin flights out of Providence’s TF Green Airport. The only hopeful sign for Worcester is that JetBlue CEO David Barger recently Tweeted that he will be touring the Airport in late August.

“MassPort meets with airlines all the time to talk about new routes and services,” Walsh said. “We also partner with airlines offering service to new markets. Partnerships include waiving fees and co-operative marketing efforts.”

Obstacles for the Airport

Even before the loss of Direct Air, MassPort officials say the airport was facing a number of obstacles for it to be a viable option for commercial airlines.

“There are two things that need to happen for it to be viable: a navigation upgrade and road improvements into the airport itself,” Mulligan said.

He argued that neither of these issues can be fixed by MassPort alone.

The navigation upgrade would need to be funded by the Federal Aviation Administration (FAA), according to Mulligan. A similar system upgrade cost $13 million at Logan, but would likely cost less at a smaller airport like Worcester.

Mulligan said MassPort is talking with the FAA, but Worcester isn’t the only airport that needs the money.

“It’s sort of the chicken or the egg,” Mulligan explained. “The FAA would like to see growth, which would come if we had the navigation upgrade.”

The road, an often noted weakness of the Worcester Airport, would be up to the city or the state to improve, said Mulligan.

“The access is a real problem,” said Chip Faulkner, associate director of Citizens for Limited Taxation who remembers using the airport decades ago as a college student in Worcester. “Every time they try to build it, the neighbors oppose it.”

Faulkner said he has watched as the Worcester Airport has worked for decades to overcome its many handicaps.

“I don’t have much hope for it,” Faulkner said. “Other airports have already filled the gap. Maybe they should tear it up and put cornfields up there.”

Looking Ahead

While MassPort officials say they are doing everything they can to encourage commercial growth, it looks like they may be stalling.

MassPort officials claim they are in the early stages of acquiring the much-needed FAA grant to upgrade the navigation systems at the airport, but how much are they really doing to push for Worcester’s money?

Check back with GoLocalWorcester tomorrow as we continue to investigate.

 

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