As published in the November 1, 2006 Toledo Business Journal
Paul Toth
Toledo Express Airport, director
Traffic through Toledo Express Airport builds local identity
Toledo Business Journal recently interviewed Paul Toth, director of Toledo Express Airport. He shared the following thoughts.
Toledo Business Journal: The Toledo-Lucas County Port Authority has initiated a campaign called Fly Local, Buy Local! What is the objective of this program?
Paul Toth: The objective is simple. It’s basically getting the community to keep the economic development dollars in Toledo that are rightfully ours. When you take your money to another state, it’s gone forever. When you keep it local, it creates a multiplier effect on our economy. When you spend a dollar in town, it goes to pay salaries, which then goes to buy goods, which pay other salaries, and it has a multiplication effect on our whole economy. When those dollars go to Detroit or another airport, especially out of state, they are gone forever, and we never get to enjoy that multiplier effect in northwest Ohio.
TBJ: Your organization completed a consulting study with the Boyd Group last year. What were some of the key conclusions?
PT: The biggest conclusion is that northwest Ohio holds its fate in its own hand from an economic development standpoint. A [chamber of commerce] study showed that a reasonable amount of travelers should be retained in Toledo with our current air service. That number of travelers was as high as 50%. Knowing that we have a large hub in Detroit, they have low fare carriers, and they have a lot of non-stop destinations, we’re not going to be able to retain 100% of the travelers, and it’s not realistic to think that we will be.
What we do have reasonable control over is to be able to keep a large number of travelers in Toledo and realize the economic impact. What the economic impact of the study found a couple years ago was that the community loses about $82 million in direct economic impact. That doesn’t include the multiplier effect on the economy; that’s direct impact in the form of jobs, revenue, parking revenue, hotels, dining, and all the things that happen when flying out of the local airport versus driving to another state or airport. That $82 million does not include the cost of airline tickets, which is well in excess of $300 million more.
TBJ: Besides the multiplier effect, what are other impacts that improving commuter transportation in the area may have on economic development including business retention and attraction?
PT: We’re in a global economy now, and having air service in a community creates an identity for that community. Not having air service in a community creates a negative identity. If I have a company in China that is doing business with a company in Toledo and I have to spend an hour searching for the closest city [to fly into], what does that do for us as a community and for our image in a global economy? It’s not where we want to be. We want Toledo to have its image and access.
We understand our place in the aviation network. We aren’t going to have non-stop service to 150 cities like a major metropolitan area, like Detroit, has. But we can have easy access to major international gateways and domestic hubs that allow us easy connection in and out of Toledo and allow us to support the local economy.
TBJ: What are key issues concerning Toledo Express Airport’s ability to get area residents to switch from using Detroit Metro Airport?
PT: There are the obvious challenges that we have. We don’t have the population of Detroit, we aren’t the center of the auto industry, and we won’t ever be Detroit Metro Airport. We don’t have all the low-fare carriers with all the non-stops. The challenge is that the view of using Toledo Express versus Detroit is very myopic. You need to look well beyond the $50 cost difference between Toledo and Detroit. You need to look at what the impact to the community is. Our biggest challenge is trying to get the community to understand what that economic impact is and how it affects our community.
Airports are the single largest economic generator in many communities. Atlanta has built up around Hartsfield-Jackson Atlanta International Airport. It is the single largest economic engine in Atlanta or in the state of Georgia.
That doesn’t exist in Toledo. We happen to be blessed with a nice balance of passenger and cargo, and there are many airports our size that would die to have a cargo hub and the amount of cargo we have. So we are very much blessed in having a nice mix of what Toledo’s all about from a transportation asset. The reality is that we can be so much more if we just make a little bit of a commitment.
TBJ: Can you provide an update of the possibility for non-stop service from Toledo Express to New York City?
PT: We did receive a grant from the FAA to help foster an opportunity with Toledo to New York service. But, long-term in the airline industry is about 30 days. So, we’re hopeful that sometime in 2007 we will be able to make an announcement with respect to that.
It’s a challenge right now. Generally an airline, when it plans, doesn’t have the ability to gather planes and say it is going to fly from Toledo to New York rather than [another route]. It’s difficult to make decisions that quick with limited resources.
In recent years, US Air has been in bankruptcy, as well as United Airlines, Northwest Airlines, and Delta Air Lines. They are looking at surviving, not expanding at this time.
But, we are seeing some bright spots in the aviation industry. The first eight months of this year have been pretty good. They are actually posting profits, which is something we haven’t seen in the airline industry since 2000. So we are cautiously optimistic that we are going to see a healthy airline industry moving forward.
The other issue is at LaGuardia [International Airport]. It is a slot control airport. In other words, the FAA issues so many landing slots there. What the FAA has realized is that the average number of seats going into LaGuardia is too low. They use an example in a recent article about Baltimore Washington International Airport (BWI). Between BWI and LaGuardia there are 16 flights a day. The FAA saw that the average number of seats on each flight was 37, and they said, “this is absurd… If we create a minimum number of seats, we wouldn’t have five airlines competing with small jets. We would have one or two airlines flying large jets four or five times a day.”
The same example exists in Detroit. From Detroit to LaGuardia, you shouldn’t be flying a 37-seat jet. If you can’t fill a large jet, you shouldn’t be taking up six landing slots to provide that service.
So, the FAA is going to create minimum seat requirements for certain larger markets. We envision that will open more opportunity for smaller markets to get service to New York. We are waiting for this process to flush itself out and hope we can be the benefactor of what appears on the surface to be a very common sense rule.
TBJ: To what other city or cities is your staff working to obtain non-stop service from Toledo Express?
PT: The one thing that we have been very cognizant about, is that we only go after cities that we believe are sustainable. We aren’t going for service from Toledo to Austin, Texas, because we don’t have enough travelers on a daily basis who go to that market.
To give you a list is realistic, because we have done enough studies to know we have the traffic in Toledo to support [the routes on the list]. Fort Myers, Florida is a big market for Toledo travelers, as are Fort Lauderdale; Washington, DC; Minneapolis; Milwaukee; Dallas / Fort Worth; Philadelphia; and Charlotte.
The other thing you will notice is that most of those are hubs that provide connecting opportunities. Dallas is an international hub for American Airlines with easy access to Mexico. All those cities have connections out of Detroit, so we think we can offer something to compete with Detroit.
TBJ: Is there a way for area chambers of commerce, trade associations, and other business organizations to get involved in the Fly Local, Buy Local! campaign?
PT: We think it’s critical that the entire economic development leadership get involved with this campaign. It is much bigger than Paul Toth or the Toledo Port Authority; this has to be a community initiative. Getting the economic development leaders, the corporations, and the chambers of commerce are critical to us – not only in maintaining our identity but building on the identity of Toledo to make it what it once was 60, 70 years ago when we were considered a large, small city. And we don’t want to lose that identity.
TBJ: Are there any other issues that you would like to address?
PT: We can’t be myopic in our view of air service. We have to look past the cost of the ticket and non-stop service being the determining factors. We need to make a commitment as a community to make Toledo Express a bigger economic development engine in our community.
We get grant funding from the FAA, and it is based on the number of passengers that use our airport. The more passengers that use our airport, the more grant funding we get. That number has averaged about $7.5-8 million a year for the past ten years. That puts construction workers to work maintaining pavement, putting fences up, rehabbing terminals, and all the things that go into driving our economy. We take it for granted, but it’s such a big part of what we need to be in northwest Ohio. There are paving companies that look to the airport every year to know what kind of work is coming up, knowing that the airport spends $6-10 million a year on capital improvements. This is grant money from the government that we are competing with other markets for.
Passenger traffic generates about $4.5-5 million a year. That doesn’t include tickets that pay for salaries of airline employees and things like that. That’s just what airlines pay the Port Authority to operate and what customers pay for parking at the airport… All that money is pumped directly back into our economy. When you go to Detroit for your travel needs, you pay them money that goes into their airport, you pay them parking costs that go into their economy.
We have realistic expectations. If everybody could set a goal to fly out of Toledo 20-25% of the time, it would make a huge impact. That’s going to build more air service, bring fares down, bring more competition, and bring more passengers through Toledo.
You can’t look at a one-stop [out of Toledo] any differently than a one-stop out of Detroit, because the time is negligible.