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City, county officials cautiously weigh subsidy for Southwest Airlines

Sedgwick County commissioners are divided and Wichita City Council members mostly noncommittal on the prospect of public subsidies to bring Southwest Airlines to Wichita Mid-Continent Airport.

The two government bodies are partners in the Fair Fares program that has spent millions of public dollars to bring low-fare carriers AirTran and Frontier to Mid-Continent.

Most of the local officials like the idea of adding Southwest to the low-fare mix at the airport.

But they also raise questions about where local government can get millions of dollars that would likely be needed to subsidize it.

The city recently confirmed that it has been in talks with Southwest and that those talks involve spending some public money to bring the airline here.

It would probably take about $3 million in public funds to help get the service up and running, according to one source who asked not to be quoted because he is not authorized to speak publicly about the project. It could also require guarantees to protect the airline from losses for at least the first two years.

Southwest would offer service from Wichita to Dallas, Las Vegas and Chicago through St. Louis, a total of seven or eight flights a day. The deal must be completed by fall, which is the deadline given to the city by Southwest, Victor White, director of airports, told The Eagle earlier this month. With that time frame, service would start around June 2011, he said.

City Council members, who also act as the Wichita Airport Authority, said they have yet to see any concrete proposals.

"I think it would be great if they came here," said council member Sue Schlapp, who says "subsidy" is not the right word for the city, county and state payments to lure airlines.

"If we were to do anything, we'd give them an incentive," she said.

She noted that Wichita's airport brings in travelers from a large swath of the state and that studies show the city's earlier investments in airfare reduction have saved residents millions of dollars and boosted the local economy and jobs.

Council member Jim Skelton said he's heard good things about Southwest, but thinks the city should choose between that airline and AirTran if they both want public money to serve the market.

"My concern is doubling up on the subsidy," Skelton said.

He said the original concept was to support a low-fare carrier that would compete with legacy airlines and bring down prices.

He said that's working, but adding another subsidized airline "would defeat the purpose."

If negotiations succeed, "We're going to have a choice to make whether it's Southwest or AirTran," Skelton said. "I don't support throwing money at every airline that wants to come to town."

A long-sought goal

For decades, Southwest has been like the Holy Grail for Wichita air service — constantly sought but never in reach.

First, a federal law designed to boost air service to Dallas-Fort Worth International Airport kept Southwest from serving Wichita.

When that law was amended, Southwest didn't want to come to Wichita because it was focused on growing into larger markets.

A study by Wichita State University's Center for Economic Development and Business Research in September said that bringing another carrier to Mid-Continent would increase airport activity by about a third the first year.

The study said that another carrier would add at least 7,000 direct and indirect jobs in Wichita over a three-year period.

County Commissioner Kelly Parks said he would very much like to see Southwest at Mid-Continent on a more regular basis.

"The long and the short of it is Southwest serves a lot of markets," he said. "It's a really good airline."

He said his main concern would be whether and how the state and local money could be split between carriers to maximize local service.

Sharing the cost

The current Fair Fares program runs on a $5 million annual state grant, plus an additional $1 million each from the city and county.

The Regional Economic Area Partnership — an umbrella group for south-central Kansas local governments — handles the expenditure.

State Sen. Carolyn McGinn, R-Sedgwick, said she wouldn't see an obstacle to the partnership transferring state funding from one airline to another when the current contracts expire.

To tap the state money, local government and private entities have to provide a 25 percent match.

Sedgwick County Commission Chairman Karl Peterjohn said he is skeptical of providing subsidies.

"I have a lot of concerns about the whole subsidy issue, expanding anything that can be viewed as an additional subsidy."

Peterjohn said he's "going to view any proposal through very skeptical eyes.

"I'd like to have good air service from here to wherever folks want to go," he added. But "we've got an existing program that's been in place."

Commissioner Gwen Welshimer said she shares the concern about further airline incentives.

"Nobody wants to do anything without a subsidy," she said, adding that taxpayers can't pay for everything.

She said the main question she would need answered before supporting a subsidy is: "Can we get along without Southwest Airlines, or is it vital to our economic stability?"

Commissioner Dave Unruh said Fair Fares "has shown its value to us."

But he said he wants to be "realistic" about what the county can afford to support.

"I'd have to see what the facts are," he said.

Council uncommitted

Like Unruh, most of the City Council members are praising Fair Fares but not willing to publicly back bringing Southwest.

"There are too many issues we have to work out right now before we can try and decide," said council member Jeff Longwell, who added he doesn't want to "debate it in the newspaper."

Council member Janet Miller said Fair Fares has been successful and has strong support.

"We know it's an important economic driver for this part of the state," she said.

AirTran began service in Wichita in May 2002. Within a year, passenger traffic was up by 30 percent and fares were down by 29 percent.

Despite the success, Miller said it's too early to say whether she could support a specific subsidy for Southwest.

"I can't imagine a more challenging economy to come up with additional economic incentive dollars," she said. "If we gain Southwest and lose someone else, what are the impacts?"

She also said she would want to consider whether it would be just Wichita offering an incentive, the whole state or some regional group.

Mayor Carl Brewer said he thinks it largely will be up to City Manager Robert Layton to determine whether a subsidy for Southwest would be feasible.

"We would have to look at the whole picture and see what they're wanting and what they're asking for," he said. "It's one of those things where there are a lot of people who want Southwest."

Asked what types of things he would consider, he said: "AirTran is probably a good model to look at."

Council member Lavonta Williams said she also needs more details before making any definitive statements.

"What we're hoping is that someone comes back to us with something that's going to be reasonable and feasible," she said.

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