Jacksonville Business Journal - by Mark Szakonyi, Staff Writer
Date: Friday, May 20, 2011

Travelers at Jacksonville International Airport will have new direct flights to Denver and San Juan, Puerto Rico, this year.

JACKSONVILLE — Jacksonville International Airport travelers will have new direct service to Denver and San Juan, Puerto Rico, this year, and potentially more westbound and Caribbean connections coming if the new flights thrive.

Jacksonville Aviation Authority CEO Steve Grossman said the success of JetBlue Airways Corp.’s service to San Juan, which began May 19, could spur the airline or its competitors to add flights to Santo Domingo, Dominican Republic, and San Jose, Costa Rica. This would give the airport its first direct international service.

Similarly, if Southwest Airlines Inc.’s daily service to Denver, which begins June 5, does well, it could convince the airline and others to add more legs to connect with the West Coast. Although the cost of fuel and the size of the Northeast Florida market makes a direct West Coast service unlikely, Grossman said the flights to Denver allow passengers to connect to Seattle; Portland, Ore.; and San Francisco.

“We have been making the pitch to airlines, such as JetBlue, that we are a very stable year-around business travel market,” Grossman said. “We have shown them the numbers that show this is the only major Florida market that isn’t seasonal.”

He said the JetBlue service to San Juan originates in Boston and is seen by the company as a test of Jacksonville’s business market potential. Airline statistics have not reflected the need for a direct service between San Juan and Jacksonville because Northeast Florida travelers have driven to Orlando and then flown to Puerto Rico.

By getting the support of shipping companies that operate between Jacksonville and Puerto Rico, such as Crowley Maritime Corp. and Sea Star Line LLC, the authority was able to make the case for direct service to JetBlue.

“If we get the community to support this service, then JetBlue will look at adding flights to other markets, such as Austin [Texas],” Grossman said.

Although the coming year will be good for Northeast Florida business travelers looking for better connections, the cost of flying is not expected to fall anytime soon, he said.

The number of travelers passing through JIA last month decreased nearly 4 percent from the same month in 2010, and the available seats grew about 5 percent to 10,350 seats within the same period. Although off in April, JIA traffic has been steady since mid-2010.

But airlines are not expected to add many more seats to capture the ramp-up in potential business, said Craig Jenks, a New York City-based aviation consultant. That’s because, after losing nearly $60 billion over the past decade, the airline industry is making sure it doesn’t return to the days of overcapacity and economically infeasible fare cutting.

“If fuel went back to $60 per barrel, then you would start to see a competitive rollback in pricing,” Jenks said.

Fares may drop slightly as fuel does generally after the summer, but he predicted higher oil costs and tightened capacity will restrict the bargains available. As of May 18, crude oil was priced at about $97 per barrel and has been declining in price since March, but the U.S. Energy Department only lowered its 2012 estimate from $113.50 per barrel to $107 per barrel, according to Bloomberg News.

The average fare, excluding taxes, fuel surcharges and other fees, out of Jacksonville International Airport in the last three months of 2010 increased to $142 from $137, according to the most current authority statistics. Within the same period, average fares out of John F. Kennedy International Airport increased $8, and fares out of Chicago O’Hare Airport increased $6.

Jacksonville is one of the nation’s 15 most competitively priced airports, according to Nate Silver, who runs the FiveThirtyEight blog for The New York Times.

Grossman said Jacksonville’s fares are kept below the national average because the other Florida airports help keep the state rates down by attracting generally lower-fare tourism traffic.

Also, having discount air carriers JetBlue and Southwest competing with main lines out of Jacksonville helps keep prices competitive.

“Where there is a monopoly on nonstop flights, [airlines] charge through the nose,” Grossman said.

Although air cargo will never be its core business, Grossman said the authority plans to conduct a study this fall on how to attract cargo-handling business from Miami and Atlanta. The amount of cargo handled by the airport in the past 12 months to April increased 5 percent from the same period last year to about 149.1 million tons.

Increased air cargo handling has been a boon to some tenants of the Jacksonville International Tradeport, which is near JIA. For instance, Air Van Inc. is expanding its warehouse space 50 percent to 61,500 square feet after receiving a contract to handle General Electric consumer products, such as fuse panels and circuit breakers, manufactured in Puerto Rico, said Steve Wright, the Jacksonville-based logistics company’s general manager.

Although the Puerto Rican cargo is handled by cargo jets and not stored in the belly of passenger planes, Wright said the new direct passenger service could “open some doors for emergency-type and regular business.”

Source: http://www.bizjournals.com/jacksonville/print-edition/2011/05/20/flight-offerings-expand.html