Are things looking up — or down — at Burlington International Airport? It depends who you ask.
Delta starts daily nonstop flights to Atlanta this week, marking the airport’s first major air-service expansion in several years. Last week, local dignitaries gathered to celebrate the permanent appointment of Gene Richards as aviation director. His “interim” days are over.
But behind the positive spin are some sobering figures: Since 2008, the number of passengers departing BTV annually has dropped by 23 percent, from 759,000 to 580,000.
The Burlington airport’s managers haven’t been resourceful enough to halt the downward trend facing almost every BTV-size airport in the U.S, says Brad Worthen, the airport’s former community liaison official. Richards may or may not possess the caliber of leadership needed in the post, Worthen adds. “You’ve got to know how to swim with the sharks,” he says. “The industry is populated with sharks. I don’t know if Gene can handle them.”
Mayor Miro Weinberger should have conducted a national search for an aviation director, Worthen argues. “This ought not to be a political football, and that’s what it has been,” he says, implying that Richards may have been chosen at least in part because of his support for Weinberger in the 2012 Democratic mayoral contest.
In response, Weinberger said in a written statement on Tuesday that Richards was appointed — and unanimously confirmed by the city council on Monday — “because he is working extremely hard for the people of Burlington and delivering excellent results.”
That’s the general consensus among many who have watched him up close during his 10 months as interim director — and before that, for six years as a member of the Burlington Airport Commission. Even Worthen acknowledges, “Gene has done a terrific job with the airport’s physical plant and finances.”
Another point of agreement: BTV’s enormous economic importance to the region. The airport enables companies throughout northern and central Vermont “to participate in the global economy,” South Burlington Interim City Manager Kevin Dorn observed at the Richards’ appointment press event. Vermont commercial real estate baron Ernie Pomerleau, a member of the BTV strategic planning committee, identified the airport as the region’s “number-one economic stimulator.” Without it, Weinberger added at the press conference, Burlington would be “some backwater.”
BTV faces some unique problems, including a crummy credit rating. Wall Street has lowered the airport’s investment grade to near junk-bond status, thanks largely to an ill-conceived parking garage project and the Burlington Telecom fiasco. And the survival of BTV’s Air National Guard base may depend on the Green Mountain Boys getting the go-ahead to fly bigger, noisier F-35 fighter jets.
General, widespread turbulence in the airline industry has also shaken up BTV. The number of scheduled flights declined 14 percent nationwide from 2007 to 2012 as airlines merged, increased their prices and ruthlessly economized in an effort to offset rising fuel costs and other expenses. During that period, BTV lost a discount carrier, AirTran, that was later absorbed by Southwest Airlines. The popular purveyor of cheap fares serves the Burlington airport’s two top regional competitors: Albany, New York, and Manchester, New Hampshire. Despite years of wooing, BTV officials haven’t managed to coax Southwest to take up residence in northwest Vermont.
But Richards and his supporters contend that BTV’s prospects look brighter today than they did a couple of years ago. The airport’s finances have been stabilized, Richards explained in a 75-minute interview last week, and its infrastructure has been upgraded.
“We’ve achieved every financial goal we set for ourselves,” Richards said in a conference room with a dramatic view of BTV’s runway.
On a subsequent tour of the terminal, Richards explained that as a result of refinancing $24 million in debt, the airport is saving $300,000 a year in interest. He showed off the terminal’s new $800,000 roof and a waiting area that’s being reconfigured to provide more views of the Green Mountains. Then he moved on to the airport’s yoga room and its private space for nursing mothers.
“These respond to what our customers want,” Richards said.
Richards is also taking a tough stand on lease-renewal negotiations with airport vendors to wring as many dollars from them as he can. He estimated those efforts will produce an extra $350,000 per year.
“There’s no deals for anyone. Everyone is treated fairly,” Richards proclaimed, adding that he pays full freight when he flies out of BTV.
Jeff Munger, the current chair of the airport commission and a transportation policy specialist in the office of Sen. Bernie Sanders, says Richards “never uses the word ‘no’” when confronted with a challenge. Instead, Munger relates, “He finds a way to get it done.”
Jane Knodell, a Progressive Burlington city councilor who serves on the strategic planning committee, describes Richards as “very empowering” in his dealings with the 42 workers directly employed by BTV. Ten of them took time to attend his appointment announcement.
Richards brings an eclectic résumé to the job. He worked as a banker in Burlington prior to founding Spruce Mortgage, one of the biggest Vermont-owned residential brokerages, which he continues to oversee as CEO. Richards is also a respected landlord — a description that often qualifies as an oxymoron. He’s served on the boards of the Lund Family Center, the Stern Center for Language and Learning and the Boys and Girls Club. “I really enjoy fundraising,” Richards said.
He also knows how to fly. Richards was a student aviator in the early 1980s, piloting a four-seat Cessna in and out of BTV and the Rutland airport. “I wasn’t a good pilot,” he disclaimed. “I’ve got the attention span of an ant. My wife, Julie, is much better.”
Richards has big plans for BTV. He and Ryan Betcher, recently hired as the airport’s first-ever marketing specialist, are crafting advertising campaigns aimed at reversing the recent drop in passengers. One campaign seeks to lure Canadians from Sherbrooke and Québec’s eastern townships, “an untapped market,” according to Richards.
The other, a radio ad, advises local listeners they shouldn’t “drive to fly.” That’s a reference to outbound Vermonters who motor to the airports in Manchester, Albany — and, increasingly, across the lake to Plattsburgh International. Richards pooh-poohs PBG as a competitor, arguing that its limited low-cost service to Florida is “fine, as long as you don’t mind leaving at 3 a.m.” Fares on PBG carriers Allegiant and Spirit also aren’t as cheap as they appear; both airlines charge extra for carry-on luggage, for instance.
But Plattsburgh is a shorter drive from Montréal than is Burlington, a geographic advantage PBG has highlighted by billing itself as “Montréal’s U.S. airport.” Indeed, Québec residents account for about 75 percent of passengers departing from Plattsburgh and 35 percent of BTV’s traffic. And departures from PBG climbed from fewer than 50,000 in 2008 to nearly 140,000 in 2011 — the most recent year for which statistics are available.
Richards might downplay PBG’s competitive threat, but it’s clear Burlington officials worry about BTV’s attractiveness to Québécois. They also worry that the day may come when Canadians find it economical to fly from their own country’s airports rather than schlepping to Burlington. The high fees Canada charges airlines have begun generating loud demands for a rollback.
“We hope like hell nothing bad happens with the Canadian market,” Knodell confides.
In addition, Vermonters who want to fly — not drive — to Boston can head to Plattsburgh. PBG offers daily service to Logan International; BTV lost that link five years ago. Despite what would seem to be high local demand for a Burlington-Logan connection, “It’s not a profitable route for the airlines,” says Heather Kendrew, BTV’s director of maintenance, engineering and environmental compliance. “It’s too expensive for them to run because of the short distance.”
Ever the BTV booster, Richards waves off his airport’s lack of service to Boston. Burlington’s airlines fly direct to lots of major cities, he pointed out. He also insisted he’s not craving a partnership with Southwest. Bringing the discount airline to BTV might hurt JetBlue or another existing airline, Richards said.
“We shouldn’t dilute what we’ve got,” he said.
One thing BTV’s got is the Vermont Air National Guard. Besides lending patriotic prestige to the airport, the Guard provides fire and rescue services worth $2 million a year. That’s a cost BTV would otherwise have to add to its $18.4 million annual budget, Richards said.
The airport is already in effect subsidizing its commercial carriers by charging them landing fees far below the cost of maintaining the airfield, Richards said. Without the $6 million subsidy, the four airlines serving BTV — Delta, JetBlue, United and USAir — might pull out. Although that scenario seems unlikely in Burlington, it happened in a similar-sized city, Lake Havasu, Arizona. Six years ago, the airport lost its last remaining airline.
The Air Guard is getting an even better deal than the civilian carriers. It pays BTV a grand total of $4000 a year for use of the runways for its F-16 fighters, Richards revealed. He said he’s aiming to renegotiate that fee in the coming year but won’t specify the amount he’s seeking. “I might ask for $5000,” Richards said jokingly.
And what about the F-35, the supposed successor to the F-16 that Vermont’s political and business elite are desperate to land for BTV? Richards said he’d welcome the new military jet, but he doesn’t dismiss neighbors’ nervousness about the noise it would generate. Indeed, enhanced sensitivity to South Burlington’s concerns is another of the improvements Richards boasts of bringing to BTV’s operations. He said he consults regularly with South Burlington officials, including city council member Rosanne Greco, a retired Air Force colonel and leader of the opposition to the F-35.
Another sore point for many airport neighbors: the federal program of buying and demolishing homes within BTV’s high-noise zone. Although Richards noted that the 93-year-old airport predates almost all nearby homes, he lamented the loss of affordable housing. But he added that will end in six years when the federal home-purchase program is scheduled to expire.
By then, though, there might be enough cleared land for the airport to add the direct-access road, hotel and other commercial facilities that are part of its long-term plan.
The future could also bring a change in BTV’s governance. The strategic planning committee and a consulting firm hired to chart the airport’s future are due to present their final report to the Burlington City Council next week. Among the scenarios discussed in the report, sources say: establishing a regional airport authority to share the operations and costs of running BTV with other municipalities; or partnering with the state, which already operates eight small airports.
Bill Keogh, a former Burlington City Council president who sits on the strategic planning committee, says he doesn’t regard those scenarios as realistic. Besides, Keogh notes, a significant change in BTV’s governance would require voter approval. Weinberger, for his part, says he’s willing to “take a look” at the possibility of shared governance, but in an interview on Monday, he didn’t sound enthusiastic about that option.
Strengthening the all-volunteer airport commission is another possibility that the strategic report reportedly raises. It could, for example, be given the power to hire and fire the aviation director, which might at least partly insulate BTV from Burlington’s often-contentious politics. It might also help prevent a repeat of the decision by the administration of former mayor Bob Kiss to approve a $14.5 million expansion of the airport parking garage without a viable way of financing it.
That, along with the even bigger bollocks made of Burlington Telecom’s finances, are the key reasons the airport plunged into a financial pit from which Richards and his team are desperately trying to ascend.
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