RIC ponders possible direct route to Europe, duty-free store
There are some big plans on the radar at Richmond International Airport.
Last week the Capital Region Airport Commission, the governing body that oversees RIC, held a two-day retreat at which it outlined big-picture plans and potential changes and additions at the airport.
Among the more notable topics that came up were: a possible direct route from Richmond to Europe, construction of a new lounge, a duty-free store and a smattering of new facilities at the airfield.
Although the airport recently began offering its first international flights in a decade with service to Bermuda, the airport is currently working on adding even more flights abroad, namely to Europe.
Martin Rubinstein, the airport’s chief growth officer, gave a few presentations to the commission in which he discussed how RIC is working to launch a direct route to and from Europe.
Rubinstein said there’s a “strong business case for a European route” from Richmond, given that 500,000 passengers annually fly from Richmond and connect elsewhere to ultimately land in Europe.
But he said that RIC has an issue with what the aviation industry calls “leakage,” which is when local travelers go to a different airport in order to fly to their final destination.
Rubinstein said 75% of all Richmonders flying to Europe leak to other airports, and that airlines don’t necessarily track or see leakage data. Airlines, Rubinstein said, only see the number of people originating out of RIC, which shows a quarter of the actual demand for European flights from Richmond.
“If a lot of people (leak), the airlines themselves assume there’s not enough demand in the market,” Rubenstein said. “How big is RIC’s leakage issue? It’s really big. Really big.”
Airlines see establishing new routes to recapture leaked passengers as a financial risk, Rubinstein said, adding that airports themselves are limited in what they can do to reduce that risk, as FAA regulations prohibit airports from directly subsidizing services or guaranteeing revenue for airlines. However, local and state governments can offer such subsidies.
“To mitigate that risk of setting up a route that’s unproven, (airlines) need some sort of revenue guarantee until the route is established and profitable,” Rubinstein told the commission.
Steven van Beek, an aviation industry consultant with London-based firm Steer Group who addressed the commission, pointed to a route to Dublin, Ireland that Indianapolis International Airport was able to recently secure with Irish airline Aer Lingus thanks to a $17 million revenue guarantee commitment from the Indiana state government.
Rubinstein said a financial commitment of around that size is what RIC would need from local and state governments in order to secure European service at RIC.
“That’s what it’s going to take,” Rubenstein said. “It’s a very complex situation but without the jurisdictions’ and the state’s support, it’s just not going to be possible to convince these airlines.”
RIC CEO Perry Miller said that the airport has already been petitioning Gov. Glenn Youngkin’s office and talking to the state’s Secretary of Commerce and Trade on the topic.
“The good news is we’ve gotten started on it,” Miller said. “We’re well on our way to doing this.”
Rubinstein and RIC spokespeople also noted that RIC’s physical attributes, like the length of its runways or capacity of its gates, aren’t limiting factors in its hunt for European service. Rubinstein said RIC can handle the type of aircraft that commonly fly across the Atlantic like Airbus’ A350 planes and Boeing’s 787s.
“We have landed larger aircraft, including Air Force One and superheavy cargo freighters, many times previously,” RIC spokesman Troy Bell told BizSense last week.
Bell also confirmed that RIC is currently in discussions with some airlines regarding European service.
More changes could also be coming to the airport’s concourses.
Rubinstein told the commission that while recent surveys of travelers showed RIC generally scoring favorably when it comes to passenger experience, there’s room for improvement when it comes to concessions.
Earlier this year the airport finalized deals with Richmond-based Hardywood Park Craft Brewery, local juice bar The Beet Box, and national chain Wolfgang Puck Bar & Bites to open locations at RIC, but Rubinstein said they’re exploring more options, including a possible lounge and duty-free shop.
Another topic at the retreat was the idea of constructing some buildings on the airport’s grounds on spec.
Rubinstein made the case for considering building structures like hangars, repair stations, offices and storage facilities on airport property to help lure new users, a practice van Beek said is extremely common for airports.
Rubinstein said RIC has been getting calls from aviation-related business looking for space at the airport, but that there’s none available. He used an unnamed flight school as an example, noting that the school has run out of space at its existing facility and has committed to lease a new, larger building if one were to be built.
Those potential new buildings could also house fixed-base operators (FBOs), the third-party businesses that do things like store fuel, and manage belt loaders, de-icers and refueling for airlines.
RIC has long had two local privately owned FBOs, Richmond Jet Center and Million Air, and last year Miller controversially proposed bringing FBO services in-house.
Richmond Jet Center and Million Air argued such a plan would put them out of business and the proposal was ultimately tabled. RIC has since worked out a lease extension with Richmond Jet Center. At last week’s retreat, RIC COO John Rutledge said an extension for Million Air’s lease could be on the agenda for the commission’s August meeting.
There does, however, seem to be some lingering tension between Miller and the FBOs. At the retreat last week Miller said that the airport needs to continue to “challenge” the FBOs to grow their business and have proprietary, exclusive offerings, at one point noting, “The community deserves a better operation.”
The commission’s retreat coincided with the announcement of two new routes at RIC from Frontier Airlines.
This October, the budget airline will begin flying from Richmond to Atlanta on Mondays and Fridays, and to Denver on Thursdays and Sundays. The routes are Frontier’s first in Richmond.
Other recent changes at RIC included an increase this month on the parking fees at the airport’s garages and lots, a measure that will help the airport finance over $230 million in new parking decks.
The airport also kicked off the design process for a new security checkpoint that would have more lanes and consolidate the two existing checkpoints at each of RIC’s concourses.
The post RIC ponders possible direct route to Europe, duty-free store appeared first on Richmond BizSense.
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