John Wayne Airport plans to reintroduce incentives for an airline to offer new routes to Mexico as part of its 2015 flight plan, which also includes more passengers and 15 additional flights by Southwest Airlines.
The plans anticipate continued growth in demand as the area recovers from the economic downturn.
The Orange County Board of Supervisors this month approved the airport’s request to increase passenger counts 8.7% from a projected 9.2 million this year to 9.96 million in 2015, based on current carriers’ expectations.
The airport’s passenger cap is 10.8 million.
It’s also midstream with an application to U.S. Customs and Border Protection to be switched to a “port of entry” airport from its current “user fee” designation—in part to slice $2 million in annual costs for airlines with passengers on international flights.
Southwest is currently the only such airline at John Wayne and therefore pays the entire amount.
Any airline adding an international route would have to pay part of the cost.
“JWA must have a Port of Entry designation. Without it, our air carriers and our community are at a significant competitive disadvantage,” Airport Director Alan L. Murphy said in an email.
At user-fee airports, individual airlines pay for customs services and border protection. Port-of-entry airports’ costs are covered by the federal government.
“We are hopeful they will grant the designation sooner rather than later,” Murphy said.
The bid is backed by the OC Visitors Association, the Orange County Business Council, Disneyland Resort, and Congresswoman Loretta Sanchez, D-Calif., according to the airport.
Southwest
Most of the anticipated passenger increase next year would come from Southwest’s new flights.
It would have 67 flights from John Wayne if it uses its entire request for 15 new flights in 2015, up from its current 52.
The airline has been adding international flights at many airports. By Nov. 2, it will fly to Cabo San Lucas and Mexico City from John Wayne on routes formerly operated by its AirTran subsidiary, which it bought in 2010.
A new international incentive program by John Wayne would apply only to new routes, said airport spokesperson Jenny Wedge.
Similar Incentive
The airport offered a similar incentive from mid-2012 to mid-2014 that included $300,000 a year in rent credit for an airline that flew at least five times a week to Mexico.
AirTran was using the incentive, along with low-cost Mexico City-based airline Interjet. The latter ended its Mexico service from John Wayne this summer and no longer flies out of Orange County.
The airport wants to increase its service to Mexico due to the business and leisure connections between the two.
“International service is important to Orange County’s economy [and] tourism sector,” Murphy said.
The service could come from a new carrier—Mexico City-based Volaris has been mentioned as an option—or Southwest if it added Mexico destinations from John Wayne Airport.
Volaris, which flies from other Southern California airports, declined to comment on whether it would add service at John Wayne.
Southwest has 50 new international destinations it could reach with its fleet, according to a news report.
Wedge said the airport also has a domestic service incentive in place through the end of next year that offers $300,000 in credit for an airline that begins nonstop service to Hawaii, Washington, D.C., or a new market John Wayne does not currently serve.
Murphy has said that a Washington, D.C., route is a top priority for the airport, according to a report.
Southwest spokesperson Brad Hawkins said the airline’s flight planners know it has the new slots available in Orange County but hasn’t announced specifics.
He did say that the airline’s domestic service has “a lot of dots” and that Southwest wants “to draw more lines between existing dots.”
He said new routes to Mexico or Washington, D.C., from John Wayne are “not currently on our route map [from Orange County], but they’re very much on our radar.”
New Deals
County supervisors and the Newport Beach City Council in separate votes this fall unanimously approved an amendment to the 1985 Settlement Agreement governing airport operations.
The amendment extends a curfew through 2035 that prohibits departures after 10 p.m. and arrivals after 11 p.m. It increases the number of airport passengers allowed annually from 10.8 million to 11.8 million in 2021, and to 12.2 million to 12.5 million after 2026.
City and county officials said the agreement strikes a balance between airport operations and resident concerns about noise and pollution.
John Wayne had revenues of $136.6 million in 2012-2013, the most recent year for which audited financial results are available.
The airport uses no county tax dollars and is funded mainly by airlines, parking fees, rental car companies and concessions, and revenue is reinvested in the operations, Wedge said.
The airport is now turning its attention to new routes, new flights and, it hopes, new clients, none of which would come overnight.
Signing a new airline would take at least 60 to 90 days once the airline expressed serious interest, Wedge said.
The airline would, among other actions, apply, conduct noise tests, and request the approval of county supervisors, who must sign off on operational changes.
She said the nearly 10 million passengers the airport projects for next year represent the highest level since 2007, before the recession.
“It demonstrates the strength of the Orange County market.”
