Orlando International Airport hasn't ever had trouble recruiting new flights.
Airliners have been lining up for years to link new cities from around the globe to Disney World, Universal Studios and Central Florida's other tourism attractions.
But last year, the Orlando airport introduced a financial incentive program meant to help lure new airline business.
The program mimicked what Tampa International Airport instituted more than five years ago, which has helped bring high-profile international flights like nonstop service to Frankfurt, Germany, on Lufthansa and service to Panama City, Panama, on Copa Airlines, to Tampa Bay.
The new incentive program in Orlando ultimately helped the airport draw a nonstop flight to Dubai on international airliner Emirates.
Tampa's entry into the world of airline incentives didn't come without controversy: Airport CEO Joe Lopano drew public criticism when he asked for permission to throw money at airlines after he arrived in Tampa in 2011. He eventually got the go-ahead, but it was new terrain for the airport.
James Borchuck | TIMES
James Borchuck | TIMES
That Orlando is now writing airlines checks is an indication that Lopano was right, aviation experts say. If you're going to grow flights at an airport and eventually make money off those flights, you're going to have to pay to play.
"It's much more competitive now than ever before to lure airlines," said Michael Boyd with Boyd Group International, an airline consulting firm in Colorado. "Tampa competes with Orlando and other airports in the state now more than ever. If you don't offer incentives, the airlines will go somewhere else that does."
As airline companies have consolidated over the years, there are fewer flights to go around. That has changed the competitive landscape for airports, especially in tourism-driven Florida.
Tampa has benefited in recent years from the saturation of international flights at airports like Orlando and Miami, said Ken Qualls, CEO of Flight Management Solutions in Boca Raton. It has helped put Tampa on par with its competitors. "The demographics are fairly similar across the state, and it's a much better option to start a new route there than to force travelers to connect in Atlanta," Qualls said.
Lopano came to Tampa from Dallas-Fort Worth International Airport, where he oversaw the airport's lucrative incentive program and had a track record of bringing high-profile international flights, including daily flights to Amsterdam and London's Heathrow Airport, to Dallas.
In his first year in Tampa, Lopano and his executive team landed a nonstop flight to Zurich, Switzerland, on Edelweiss Air, Tampa's first nonstop flight to continental Europe in 15 years. The Hillsborough County Aviation Authority approved the airport's first financial airline incentive program in airport history the same year but not without some criticism. Past leadership at the airport was known for being much more frugal and conservative.
Eve Edelheit | TIMES
Eve Edelheit | TIMES
But the international flights have rolled in steadily ever since.
The Tampa airport has waived fees and written checks for marketing reimbursements totaling $4.4 million since the airline incentive program was approved. Since then, the airport has recorded an 84 percent return on investment. The airport pocketed $3.7 million in new profit after incentive expenses, and that figure is expected to grow as incentive contracts expire and international routes continue in Tampa without financial aid. Most incentive contracts run out in just a year or two, but it gives the airline a boost while they're establishing a new route in a new market. Marketing reimbursement funds come from the airport's capital improvement funds.
The aviation authority board of directors is expected to vote on an updated plan for the incentives program policy before the end of the year.
The incentive program is one way for Tampa International Airport to generate more revenue in the long run. The airport is publicly owned. The aviation authority runs on revenue generated by airline fees, rent from concession tenants and parking fees in the airport garages. It doesn't collect taxes to pay for operations but does receive grants funded by federal and state taxes.
"Incentives are one tool we use to support solid business cases that win air service," said Chris Minner, vice president of marketing at the Tampa airport. "With the support of our partners, our incentive package is often the tiebreaker between new service to TPA and other similarly profitable routes."
Tampa is unique to other airports, too, in that it has several community partnerships that offer cash to new airlines. The bay area's two tourism bureaus contribute cash for marketing campaigns for new flights. Visit Tampa Bay, Hillsborough County's tourism arm, gives $50,000 each year for up to two years, on average, for new international flights. Visit St. Pete-Clearwater, the Pinellas County tourism agency, has given hundreds of thousands of dollars to airlines each year, the amount depending solely on the flight.
Courtesy Visit St. Pete-Clearwater
Courtesy Visit St. Pete-Clearwater
"Lufthansa was a no brainer," said David Downing, executive director of Visit St. Pete-Clearwater, which gave the airline more than $180,000 this year, $68,000 last year and has $250,000 budgeted for the Frankfurt flight next year. "What's unique about our destination is the cooperative effort, so it really helps the airline get off the ground and publicize the route."
Visit Florida, the state's tourism agency, also offers matching marketing grants to flights to new destinations or new airlines at Florida airports. Marketing dollars from tourism groups are generated from tourism development taxes, also known as the bed tax, which are applied to hotel room stays.
"The co-op program was designed to assist Florida airports in acquiring new international service. This is an airline co-op marketing program and the funds go specifically to the originating market and the catchment area it serves," said Kathy Torian, spokeswoman for Visit Florida.
Local economic development groups, like the Tampa Hillsborough County Economic Development Corp., also pitch in.
"The partners net is wide. The airport brings us in to help provide hard dollars to market these new flights," said Santiago Corrada, president and CEO of Visit Tampa Bay. "This is the new way of the world to create business partnerships."
And the money doesn't stop there. Visit Sarasota, Sarasota County's tourism marketing agency, has spent up to $15,000 on marketing partnerships with airlines like British Airways, WestJet and Air Canada in the past. These programs are unrelated to the incentive program.
"This is an opportunity for us to reach international travelers not flying directly into our own airport," said Kelly Defebo, director of sales for Visit Sarasota.
So far under Lopano's leadership, the airport has achieved a number of firsts. The Edelweiss Air service to Zurich, Switzerland began in 2012. Copa Airlines' service to Panama City, which began in 2013, was Tampa Bay's first nonstop flight to a major Latin American hub. A flight to Frankfurt on Lufthansa in 2015 connected Tampa Bay to one of the largest international airports in the world. Tampa will become one of the first cities in the U.S. to offer direct commercial service to Cuba on Southwest Airlines beginning in December. Icelandair will begin service next September from Tampa.
"I think a lot of people recognize the Tampa airport as the gateway to Central Florida," Boyd said. "People fly in there and can head anywhere in the state. In that way, it offers a lot of accessibility."
Contact Justine Griffin at email@example.com or (727) 893-8467. Follow @SunBizGriffin.