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With Southwest Airlines today announcing that it will launch service in South Carolina, pending legislation to create an airline incentive fund is likely to die in the state Senate.
By Scott Miller and James T. Hammond
Published May 11, 2010
With Southwest Airlines today announcing that it will launch service in South Carolina, pending legislation to create an airline incentive fund is likely to die in the state Senate.
The Columbia Metropolitan Airport appeared in line to receive some form of funding to attract a low-fare airline as part of that legislation. Today, Southwest said it will begin service next year at the Greenville-Spartanburg International Airport and the Charleston International Airport and that the airline won’t accept any state incentive.
“I don’t guess we need it anymore since they are coming without it,” said state Rep. Dan Cooper, R-Piedmont, who chairs the House Ways and Means Committee.
Cooper had been a strong supporter of the bill and had written letters to senators urging them to support it, but he now says the legislation is likely dead.
“I think they just decided that these were two good markets, and they weren’t going to allow some regional haggling to get in their way,” Cooper said.
The original proposal would have borrowed $15 million from the state insurance reserve fund that airlines could use as a backstop if they lost money in the early years of operations in South Carolina.
Midlands lawmakers blocked that bill over concerns that only Charleston and Greenville-Spartanburg would benefit. Lawmakers were discussing a compromise to add $10 million for Columbia to use to lure a low-fare airline. Such a measure was unlikely to pass, however, said state Sen. Larry Grooms, R-Berkeley, chairman of the Senate Transportation Committee. Another proposal would have capped the amount airports could receive from the fund to ensure it wasn’t depleted before Columbia Metro and other smaller airports had an opportunity, Grooms said.
“More than likely it will die on the Senate Calendar without a vote,” Grooms said of the bill.
Southwest officials, after evaluating the markets, had told Columbia leaders they could not make money serving Columbia and would not add the service to their plans. This outcome means Columbia Metropolitan Airport is unlikely to have access to millions in state funds, at least for now, to lure another low-fare airline that might compete with Southwest within the state.
But the legislation may be reintroduced next year, Grooms said.
“I really do think it’s in the best interest of the state to have this type of program because if it did, Southwest would already be flying from Greenville and Charleston, Grooms said.
In making its announcement today, Southwest Airlines said its plans to serve South Carolina will not be dependent on that legislation.
The airline said it will release details regarding start dates, destinations and fares, and number of departures at a later date.
"We look forward to serving the Palmetto State with Southwest Airlines' unique brand of genuine hospitality, great value, a robust and reliable flight network, and our terrific employees who deliver excellent customer service," said Dave Ridley, Southwest's senior vice president of marketing and revenue management.
Any plans Greenville County had to develop an airline incentive have been put on hold also, said County Council Chairman Butch Kirven. The county had been working with other Upstate governments and private businesses to create an insurance fund that would be needed as a local match to state airline incentive fund.
“That would be put on hold for now,” Kirven said. “The airline has made a business decision that was not dependent on public incentives. They were probably a little tired of the political wrangling that was counter productive and they decided to take that out of the game. They made a business decision and I believe travelers will reward them for it.”
Charleston County also pulled its plans to implement an airline incentive fund.
GSP is providing Southwest an incentive package worth about $7 million over two years, said airport Executive Director Dave Edwards. The package includes marketing assistance, the waiver of some airport operational fees and the development and renovation of operating space for Southwest at the terminal gates, he said.
Edwards said the arrival of Southwest is likely to knock $75 to $100 off of the cost of roundtrip ticket at GSP. Currently, average tickets at GSP cost $377 each.
“There will be some type of competitive response,” Edwards said. “I think we’ll see some drop in fares before Southwest ever arrives at the airport as airlines make a move to secure that market.”
He also said airlines already serving GSP could add destinations in an attempt to compete with Southwest.
“We’re not going to stop with Southwest,” Edwards said. “We’re going to continue to try to grow service with existing carriers and maybe attract new carriers.”
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