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Q. Why was the new terminal built and why are taxpayer dollars still being spent?
A. When the new terminal and other improvements were planned and built, the former building had been in use for more than 30 years. Departure lounges and seating were inadequate, the baggage claim area would not accommodate baggage for simultaneous aircraft arrivals and concession areas were minimal and could not be expanded. Although several expansions were accomplished over the years, facilities were still inadequate and air conditioning and heating systems did not maintain a reasonable level of comfort. The aircraft ramp was in poor condition and passengers were subjected to rain and other inclement weather during boarding and deplaning. Also, without passenger loading devices to transition from the ground level terminal up to the aircraft loading door, handling handicapped passengers was difficult and often impossible. The six airlines at DBIA needed and requested additional facilities. When the new facility was in design, all gates and ticket counters were committed. During the development period Eastern Air Lines ceased operations and their two gates were eliminated; however, the ticketing area remained. Also, Pan American Express went out of business leaving another vacant gate and ticket counter. Upon opening, four of the original airlines signed lease agreements and committed to pay lease costs on five of the six gates and four of the six ticket counters until the year 2002. To our advantage, the new facility was built when construction costs were low and it was completed ahead of schedule and under budget. More importantly, the new terminal was not built and does not operate with local tax dollars. The new terminal was built with revenue bonds that will be repaid with airport revenues. While the airport is a division of County Government, its operation is not supported by County or City tax dollars; in fact, the airport actually generates revenue as it paid the County $318,764 last year for administrative services. As for the airfield improvements such as lighting, runways, aprons and navigational systems, these are required safety items and the major share of the costs were funded from the FAA Airport Improvement Program; this program utilizes funds from airline ticket taxes to help maintain airport systems throughout the United States.

Q. Why are airport landing fees so expensive? Doesn’t this discourage airlines?
A. The fees currently charged at DBIA are not excessive. A comparison with other commercial airports in Florida reveals that DBIA is mid-priced. More often than not, landing fees are identified as the culprit by those who believe that airport charges are the problem. Since this single airport cost is structured the same for all airports, this charge is easy to explain. Landing fees are the charge per 1,000 pounds of landed aircraft weight; for example, the fee for a 130,000 pound aircraft landing at DBIA is $1.18 per 1,000 pounds or $153.40. The same aircraft landing at Orlando, would incur a cost of $2.1817 per 1,000 pounds or $283.62, almost twice DBIA’s Cost. It costs the airlines approximately $6.75 per enplaned passenger to operate at DBIA. This covers all airline costs including rent, landing fees, utilities, etc. If the airlines operated at DBIA for free and we asked them to pass this savings on the consumer by deducting it from the ticket price, your total ticket price would be reduced by only $6.75. When U.S Airways announced that they would leave Daytona Beach, we asked if they would stay if there were no airport fees; they said they would not stay as airport costs or passenger volumes were not the problem.

Q. Why can’t DBIA have more airlines and non-stop, direct flights?
A. We have four major airlines providing daily all jet service to worldwide destinations. These airlines, AirTran, Continental and Delta and US Airways, provide more than 2,400 seats daily in and out of DBIA and are among the largest airlines in the world. Their service includes partnerships with other airlines and one can fly to virtually any destination in the world using these carriers.

In order to support non-stop service, airlines need to be assured that each non-stop flight is almost full and that the average fare that they can charge returns to them an amount equal to or greater than what they will receive in another market. Our biggest market is New York. Given one airlines’ profit in other markets, their cost, which is one of the lowest in the industry, and the average fare on all tickets sold in the Daytona Beach market during the first quarter of 1997, 109 New York passengers each way, each day, or a load factor of 77 percent is needed to justify the flight. With the current lowest one way fare of $109, the required load factor would rise to 95 percent. These load factors are difficult to achieve on a daily basis given the seasonality of the area market, the consumers desire for more than one daily flight and the fact that more than 50 percent of the market will not use the service since the lowest one way fare at nearby cities is $88. Not all fares are $88 of course, but these markets are larger, have more airlines and have a better mix of higher yield business travelers which attract the airlines.

The question in the minds of the airlines is how many more flights are needed and can we make money in a low yield market like Daytona Beach? Another question the airlines ask themselves is "why should we duplicate service we already offer in nearby cities if it is not clearly a good, lucrative business opportunity?" Most airlines in today’s strong economy will tell you that they have aircraft constraints; with the exception of new international destinations, aircraft on order are to replace older, less efficient aircraft rather than to expand markets.

Q. Why not get regional airlines to fly to Jacksonville, Miami and Orlando?
A. Contrary to public opinion, regional or commuter airlines costs are even higher per seat mile than large airlines. In the recent past, Atlantic Southeast Airlines, American Eagle, Comair, USAir Express and Gulfstream Airlines all provided this service at DBIA. They could not make money on the routes for a variety of reasons. Airline passengers always prefer large jets over commuter planes and will not use the commuter service unless there is no other choice. By virtue of their costs, commuter airlines tickets are expensive and often viewed as not affordable in a leisure market. However, we are continuing our efforts in this area.

Q. Why not offer incentives to airlines?
A. For several years the airport has offered Continental, Delta and U.S Airways no landing fees for a year for any new flights, a 50 percent reduction in rent for any airline offering an across the board fare match with Orlando. Charter companies have been offered no customs fees, lease waivers on the international terminal space and cooperative marketing funds with the help of County Convention and Visitors Bureaus for any direct international charter or scheduled service. Only two airlines have taken advantage of any of these offers. We are looking at other possibilities with the help of the Air Service Strike Force, a group of business and professional leaders brought together by the Daytona Beach Halifax Area Chamber of Commerce to assist with air service development. Our agreements with Delta and Continental require us to offer them the same incentives as offered to any other airline.

Q. Why not lower the fares to attract more passengers?
A. The airport does not control ticket prices or fares. The airlines do and ticket prices are not really determined by airport costs, which are less than 4 percent of the airlines overall costs. Airlines have told us that passenger volume has never been a problem in Florida; low yield on low priced tickets is and always has been the concern. Delta and Continental do offer competitive fares. This is evidenced by the fact that U.S. Department of Transportation statistics indicate that we have one of the lowest average ticket yields in the United States on the tickets purchased by the 781,501 passengers that used DBIA last year. Airlines will not sell all of their available seats at the lowest price; there are several fare levels and airlines have sophisticated computer systems to control these and to maximize their revenues. Consumers generally believe that this is unfair but there are alternatives such as driving to other cities to get the absolute lowest fare.

We urge you to use local travel agents who will help you find the most affordable fare; in many cases it will be out of DBIA. Flexibility in your travel can also help you obtain the lowest possible fare; ask the travel agents about this. Also, please consider the total cost of the trip including parking, shuttle costs, your time, etc. when making your final decision. We are fortunate to live in an area where there are alternatives and probably the best airline service in the world. Consider that some areas have no jet service at the home town airport and, alternative service can mean a drive of four to five hours.

Q. Why has Sanford done so well? Why doesn’t DBIA get international charters, develop tours and advertise more and lower parking fees?
A. Tour Operators in other countries generally determine where charter airlines fly. For example, the tour companies arrange packages for foreign tourists which can include air transportation, rental car, hotel and other amenities under a single price for each tourist. These tour operators buy their seats in blocks from the charter carriers or may even buy the entire aircraft for a seasonal or year around operation. One of the most recent examples of this has occurred at Orlando Sanford International Airport. In fact, Airtours, one of the largest tour companies in Great Britain, organized this effort. In reality, most of the passengers being brought to Sanford have vacation packages for the Orlando attractions. This traffic was diverted from Orlando International and has very little positive economic impact on the Sanford area. In fact, Orlando International charter traffic was down 54 percent last year. Also, you cannot buy tickets from Sanford to Great Britain; the seats are all reserved for passengers on package tours from the United Kingdom.

DBIA has had both international charters and direct scheduled international service during the last few years; LTU International Airways, Dusseldorf, Germany, AirTransat, a Canadian charter company, Montreal, Canada and Canadian International, a Canadian charter company, Toronto, Canada all operated here. LTU tried the market for two years and did not achieve enough volume to justify the flight; we are continuing to try to get them back. AirTransat decided to leave the market after one season when hotel package arrangements did not work out. After providing seasonal winter service for several years, Canadian Holidays, the tour company that chartered the Canadian International flights, had severe economic problems and dissolved their relationship with Canadian International; as a result the service to DBIA was discontinued. We are continuing our efforts in this area as well.

With regard to advertising, this was shifted to origin markets for a time. We have resumed local advertising within limited funds that are available to us; we hope to expand this program.

Parking fees are a substantial share of concession revenues which help keep airline costs down; also, they are competitively priced and reasonable. In the past airlines here have resisted eliminating or lowering the parking fees. There are a limited number of free 15-minute spaces available to those who need to obtain tickets or conduct other business at the airport. DBIA offers discounted weekly rates for all and 10% senior discounts for airport Gold Card members (no charge for the card which can be obtained at the airport information counter).

Issues such as those questioned above continue to be addressed by the Air Service Strike Force, the Airport, Convention and Visitors Bureaus, Hoteliers and the County. We are continuing to work on all of these issues.

Q. How can we as a community keep our existing air service and attract more airlines?
A. Here are some possibilities:

• Support the air service we have at every opportunity. Is it really always less expensive to drive 100 to 200 miles?
• The "Use it or lose it" theory applies to our air service situation. Encourage your friends and relatives to use our local air service.
• Write the airlines serving our market about ticket prices, schedules, additional service and, more importantly, to thank them for the service they are providing. They have made a huge resource investment in our community and unlike businesses with permanent facilities, they can take the aircraft resource, which is a very mobile asset, and move it to another city if it is a good business decision and makes sense. Write your state and federal representatives and encourage them to get involved in air service and airline ticket pricing in smaller communities such as ours; some legislators are already looking at these problems.
• Do not assume that everything you hear is factual. If you have a question which has not been addressed in this document, call us. We have been talking to airlines and other communities of our size about air service issues for several years and we can respond to most of your concerns. Your ideas are always welcome!

Q. How can I help?
A. Most major airlines have websites with a feedback section. The following addresses may be used for those who wish to write the airlines which have served our market. To contact other airlines, please call their 800 reservations number.