Logan to cut landing fee for new nonstop flights
Goal is more routes to key cities overseas
Nicole C. Wong, Boston Globe, 2/15/2008 (excerpted)
To entice airlines to roll out nonstop service between Boston and Asia, Latin America, Africa, and the Middle East, the Massachusetts Port Authority's board yesterday approved rebates on Logan International Airport's landing fees for new international routes.
For routes that provide at least three nonstop flights a week throughout the year, Massport, which runs Logan, will for the first time give a 75 percent credit on landing fees during the first year of service and a 25 percent credit the second year - worth a total of $300,000 to $750,000 per new route.
Additionally, Massport will donate advertising space on one or two billboards in Terminal E, the international terminal, and publicize the route on the airport's local radio ads for a year.
Initially, Massport expects this International Air Service Incentive Program to cost the authority a couple of million dollars. But officials predict Massport will recoup some money after three or four years, as an increase in the number of international passengers boosts parking and concession revenues.
"Competition among airports for new service remains fierce, especially for new international service," Massport's chief executive, Thomas J. Kinton Jr., said at the board meeting. "The package," he later added, "is designed to minimize the risk of new service, not subsidize routes that are not self-sufficient."
Logan isn't the only airport giving this discount. Breaks on landing fees - which cover the expense of operating the airfield - are widespread on new international routes, experts said. Though airlines face significant financial risks on start-up routes, airports stand to gain a lot as the big jets used on international flights funnel passengers through the airports - helping to offset airlines' shift to smaller planes on domestic routes.
Logan currently offers nonstop service to 32 international destinations, but all of them are in Europe, the Caribbean, or Canada.
Massport has been eager to inaugurate nonstop flights to Beijing, Shanghai, Tokyo, Mexico City, Tel Aviv, and Mumbai - cities that are frequented by business, academic, and leisure travelers from Greater Boston.
The most high-profile overseas deal Massport is trying to land is direct service to Beijing provided by Grand China Airlines, also known as Hainan Airlines Group. That service has been anticipated by government officials for more than two years but won't happen until after the summer of 2009, if at all.
Last week, the China-based carrier said it would launch its first North American route on June 9, a nonstop flight between Beijing and Seattle.
Massport said Boston is the largest US market lacking nonstop service to Beijing, based on the volume of passengers who annually travel to China's capital through connecting flights - about 44,000 a year.
And passenger demand for direct service to other international destinations may be even higher: About 59,200 people a year fly between Boston and Mexico City, 69,500 between Boston and Tel Aviv, and 89,000 between Boston and Tokyo, according to Massport.