Some mid-Hudson municipalities celebrate the winter year-end holiday season with a moratorium on feeding the local parking meters. The gesture doesn’t cost the local government much. But it’s a friendly if not unselfish thing to do. It presents the positive image of a place willing temporarily to suspend its usual way of doing business – and part of its revenues – for the sake of a greater good: the success of community retailing during the holiday season.
The Port Authority of New York and New Jersey (PA), long-term lessee of Stewart Airport outside Newburgh, last week made an analogous gesture in announcing a total moratorium on all fees and rentals to the airlines at Stewart for a period of six months starting Sept. 1. PA estimated that the no-fee retention program, unique to Stewart, will mean the waiver of about $1 million in charges to the airlines. “A million dollars won’t change the world,” said Pasquale DiFulco, a PA spokesperson, “but it certainly won’t hurt.”
The purpose of the PA’s largesse in suspending Stewart fees is to tempt cash-constrained airlines to keep their schedules intact and to fight for market share. As the cost of gasoline at the pump in the mid-Hudson area dips into the $3.80s per gallon, the cost of aviation fuel has been similarly decreasing rapidly in the past month, making the service cutbacks less essential to the airlines’ survival than they seemed when oil cost $143 a barrel. Though the airport agency won’t say so explicitly, PA’s fee moratorium is a modest tool designed to inspire the airlines not to cut back at Stewart after all, or to cut back less than they had intended. Several airlines have announced service cuts at Stewart in 2008.
AirTran is preparing to suspend all Stewart service after Labor Day. JetBlue intends to cut its service by at least half. Together, the two discount carriers account for about two-thirds of Stewart passengers.
These moves imperil the development of Stewart, widely regarded as the engine of regional transportation growth. Surveys have shown that most Stewart airline passengers are from Orange, Ulster and Dutchess counties.
PA management has brought about dramatic changes in the less than a year that it has taken over control of Stewart Airport from the previous lessee, the British bus and tour operator National Express.
PA, operator of the metropolitan area’s three largest airports as well as of revenue-generating toll tunnels and bridges, plus port facilities, terminals and the World Trade Center, has a different agenda. It sees spending money at Stewart – and it has earmarked an initial $500 million in its 10-year capital plan for improvements and enhancements there – as a useful safety valve to avoid even more costly capital expenses at its other holdings.
The New York airport system handles more passengers than any other metropolitan area in the world handles. “One of the reasons we acquired Stewart last year was to help expand our region’s aviation capacity and reduce delays for our customers at Newark Liberty, Kennedy and LaGuardia airports,” explained PA chairman Anthony R. Coscia. “This incentive program demonstrates that our commitment to Stewart remains firm. Programs like this will help Stewart become a successful regional airport and strong economic engine for the residents and businesses of the Hudson Valley.”
The Port Authority has a bigger picture in mind. Its gross operating revenues in 2007 were $3.2 billion, and surrendering a million dollars in revenues means losing merely a drop in the bucket. Aviation revenues alone were about $2 billion. PA, whose airports handled 110 million passengers in 2007, projects that number will increase at all its airports by 36 million by 2020.
The bistate public authority is bitterly opposed to a current federal plan to handle airspace congestion by auctioning airport gates and capping the number of flights at its crowded New York airports. Its expansion of Stewart facilities and other measures, new PA executive director Chris Ward argued, was “a more proactive approach” that avoided disincentives. PA wanted “to help our partners get through this difficult period, so that our customers can reap the benefits, and so Stewart can continue to become an economic engine of the Hudson Valley.”
A new access road and significant additional parking spaces (PA hasn’t decreased parking charges) were completed this past year at Stewart. Most of the physical improvements planned for the next couple of years at the airport will be dedicated to improving obsolete and hitherto underfunded infrastructure projects. A multi-million-dollar, two-phase study of the feasibility of connecting the airport to the Port-Jervis-to-Secaucus rail line, expected to cost several hundred million dollars, is in its early stages.
Given its overall strategic plans, PA is unlikely to suspend or delay its investment program at Stewart. In developing the airport, it may in fact offer additional incentives to attract new business and retain old business. But as far as is known nobody at PA has been talking about free airport parking any time soon. Even on the holidays.