For the past two years, Kelly Johnson has been trying her best to give away $1 million.
That money, $950,000 in federal air service development money to be exact, is supposed to be a carrot used to lure new service to Northwest Arkansas Regional Airport. Johnson, executive director of the airport, has dangled the money but found no takers so far.
Johnson points to the unclaimed grant as proof of how competitive the air service development market can be. Northwest Arkansas Regional Airport, like Little Rock's Bill and Hillary Clinton/Adams Field, is one of hundreds of commercial airports fighting to add service and retain current routes.
"You can't give a million dollars away. That's how tight the system is," Johnson said. "It is a very difficult environment right now. There are uncertainties there for all of us and when you're competing against hundreds of cities trying to do the exact same thing you are, you've got to bring your A game."
Air service development is a year-round prospect for airports and an increasingly competitive endeavor. Facilities, fee waivers, marketing help, local unemployment rates and revenue guarantees are among the factors considered by airlines.
Johnson will join T.J. Williams, air service development director at the Little Rock airport, this week in Chicago for the 2014 World Route Development Forum. It is among the largest such conferences and an opportunity for airports to explain why they should be included for service as airlines set their routes.
Those within the industry liken the conference interactions to speed dating. Each meeting lasts about 20 minutes and airports share information including possible incentive opportunities; details on existing air service; and a community overview featuring data on population, unemployment rates and top employers.
Williams attends at least five or six of the events each year on behalf of the Little Rock airport. That doesn't include annual visits to airline headquarters where Williams does her best to outline the case for Little Rock.
"It is important to stay in touch and to keep the airport's business case in front of airline revenue management teams," Williams wrote in an interview conducted over email. "With so many markets to manage, it's important to be visible and to keep your airport, city and state in front of airline planners for route/capacity consideration."
Consolidation of what were once 10 major airlines into four major carriers has increased the degree of difficulty. Southwest -- once thought of as a discount carrier -- Delta, American and United now control 85 percent of the domestic market.
Flight schedules are set months in advance but are constantly changing, so Johnson, Williams and others attend multiple events to try and sell their airports to the major carriers, established discount airlines and lesser-known options. Recent air service development efforts for Little Rock have included meetings with American, Delta, United, Southwest, U.S. Airways (merged with American), Alaska Airlines, Silver Airways, Allegiant, JetBlue and Sun Country.
Northwest Arkansas, which has higher average fares than its peers, continues to look for a discount carrier. During the past year, the airport has met with representatives from Jet Blue, Frontier and Spirit to discuss providing service to the region. Allegiant Air has limited service out of XNA and has considered adding more flights.
None have been swayed by the possibility of the $950,000 incentive. XNA's grant expires Sept. 30, but Johnson has said the airport is applying for an extension.
For all the information those sales pitches might include, airlines remain most interested in whether seats on a flight will be filled. If there isn't enough demand, then the carriers do not hesitate to leave their planes in other markets. In the case of existing flights, airlines are constantly evaluating whether it makes sense to remain in markets.
"We're in an environment of use it or lose it," Joseph Pickering, senior consultant for Mead & Hunt, said during a recent industry workshop at the Little Rock airport. "When you're a below-average performer, airlines are relocating. In the end they do have shareholders to answer to."
Airports are leaning on public and private money to help attract additional flights and larger commitments from airlines. Northwest Florida Beaches International Airport in Panama City lured Southwest Airlines in 2010 by guaranteeing up to $26 million over a 3-year period to cover any losses incurred. A program in Kansas underwrites revenue losses for airlines, helping Wichita and other airports secure additional flights.
These sorts of arrangements are becoming increasingly common and have made the prospect of attracting airlines even more of a challenge.
"Air service development was tough before, and now you count on two hands the number of airlines and it's that much more difficult," Johnson said. "Little Rock and XNA are doing what hundreds of communities across the country are doing. We want better service and more cost-effective service. We all do. It's exceedingly difficult. That's why you're seeing more and more communities cough up big bucks in revenue fees."
Williams and others in air service development know what they're up against heading into the Chicago forum. Competition is stiff and will remain so as long as airlines are maintaining current service levels and reorganizing routes in the wake of consolidation.
"Airline equipment is scarce. Profitability is priority," Williams said. "Airlines will focus on markets that provide the most profitable returns. If a market is underperforming, airlines will put scarce resources in better performing markets and the opportunity to get that service restored is threatened by the fact that it wasn't performing when we had it. Airports have to consistently perform with the existing routes and have to prove their business case in an ever-changing aviation environment."
SundayMonday Business on 09/21/2014