The Alabama Department of commerce and the Alabama Legislature needs to come together and hammer out a proposal where the state can create an economic development fund dedicated towards helping the state’s underserved or unserved airports attract new airline service to those airports. This is an idea that I have borrowed from the state of Ohio. Ohio has set aside a $4 million fund to help local unserved and underserved air markets attract new airlines to serve their communities. This is something that Alabama needs desperately, not only for economic and business development reasons, but Alabama is in the unique position that it is the only state and all of these United States that has both Boeing and Airbus locations in it and it’s air markets are woefully underserved.
The economic development fund that I envision, could be called the Airport Investment and Redevelopment (AIR) fund. There are several ways that money from this fund could be used to help local airports attract new airline service to their areas. The purpose of the fund would be to help offset the cost to local airport authorities and local communities of incentives necessary to attract new air service.
New tourism Airports
It could be written into the legislation authorizing this fund that money from this fund could be used to attract new airline service to new airports geared towards tourist and leisure air travel. The most obvious example of this would be the Jack Edwards National Airport in Gulf shores, who is in the middle of a 2-year plan to try to attract commercial airline service to the airport. Money from this fund could be used to develop an incentive package for an airline to come in and service Gulf shores. With the almost 7 million visitors a year that the South Baldwin region gets from tourism, introducing commercial airline service to Gulf shores makes sense.
New and existing rural airports
Right now, Boutique Airways receives just under $3 million a year in direct subsidies from the federal government to fly into and out of the Northwest Alabama Regional Airport in Muscle Shoals Alabama to and from Atlanta. This is done through a program called Essential Air Service that was set up in the ’70s to help airports that were adversely affected by deregulation and consolidation in the airline industry keep commercial air service. However this direct federal subsidy does not allow for or encourage the development of market conditions that would allow for more competition and better services in the Muscle Shoals marketplace. The question you have to ask yourself is how could things be different if The government authority that manages the Northwest Alabama Regional Airport had access to this kind of fund from the state in conjunction with alternate EAS funding, a subsidy from the federal government that goes directly to the airport and community and not to a specific carrier, which is designed to encourage local communities and airports to create incentive plans to recruit commercial air service to their airport? It should be the goal of any government subsidy program or incentive or economic development program, from the state or federal levels, to encourage innovation and outside the box thinking when it comes to marketing, recruiting, and business strategies. Taxpayers should never want any community, or any organization or individual that receives money becoming dependent on these subsidies.
In November 2019, Governor Ivey and Senator Shelby announced the formation of the Southwest Alabama Regional Airport in Thomasville Alabama. The purpose of the creation of this airport was to support general aviation in the area, especially related to the manufacturing and economic development projects going on there. How many more business opportunities and economic development opportunities could be available to the Clark, Choctaw, Marengo, and Wilcox County areas if business people looking to invest in the expansion of their operations knew they could get reliable air service from the Airport in Thomasville?
Same thing with the Tuscaloosa Airport. Tuscaloosa is currently trying to recruit a legacy carrier to its national airport that is currently being strictly used for general aviation services, mainly people flying in and out of Tuscaloosa for Alabama football games. I’m sure they would love the opportunity to utilize an economic development fund like this to cement service from a legacy carrier like Delta or United or American.
Huntsville’s Airport is in the midst of a very public love fest with Southwest Airlines on social media. Huntsville would have a lot better chance of landing Southwest Airlines if they had access to this type of economic development fund to sweeten the incentives to get Southwest to commit.
The downtown airport in Mobile is fixing to lose its only tenant in Frontier Airlines. While it’s likely that a legacy carrier will move into the downtown airport from Mobile Regional, that’s going to be a one-for-one swap. While the Mobile Airport Authority already has a strong incentive program for new airlines that come in and fly to new destinations, it would be easier for them to recruit those new airlines, including low-cost carriers if they had access to this type of fund to sweeten their incentive deals as well.
This type of economic development fund is the type of economic incentive program that can benefit all parts of the state, and all different types of airports regardless if they’re big or small. Improvements in air travel also helps in economic development industries, especially technology where increased air travel options to the west coast and Boston (where a lot of venture capital resides) makes Alabama a More attractive place to do business and makes it easier for economic development recruiters around the state to win projects and new business for the state.