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Taxpayers Could Pay For Delta's Return To Tallahassee

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By TED JACKOVICS | The Tampa Tribune

Published: March 13, 2009

TAMPA - Taxpayers could wind up paying a $1.5 million revenue guarantee to Delta Air Lines to compete with Fort Lauderdale-based Gulfstream International Airlines by adding flights between Tallahassee and Tampa, Orlando and Fort Lauderdale beginning April 1.

The state has committed to a $750,000 share, with Leon County and the city of Tallahassee each picking up $375,000 shares, in the "stop-loss guarantee" deal in the event the Delta flights do not generate enough revenue.

That means taxpayers, through the government partners, would pay Delta up to $1.5 million if Delta fell short of the $11.5 million it said it needed in passenger revenue to operate the flights for one year.

The new service is scheduled to begin six months after Delta pulled out of Tallahassee when aviation fuel prices soared.

Delta will use 34-seat turboprop aircraft by its Minnesota-based Mesaba Airlines subsidiary. Gulfstream uses 19-seat turboprops.

Air fares shown on travelocity.com for a round-trip flight between Tampa and Tallahassee on Monday, April 13, and returning Friday, April 17, were $351 with taxes for both airlines.

"The governor does support the stop-loss guarantee because it is important that citizens have access to their state capital and for Tallahassee," spokesperson Sterling Ivey said in an e-mail. The $750,000, if needed, would come from the Office of Trade, Tourism and Economic Development, he said.

That has Gulfstream's chief executive Dave Hackett livid.

""I was apoplectic when I heard of the deal, and that was from a customer of ours who called me around late January and said 'You will not believe what I've heard,'" said Hackett, whose airline flies as a Continental Connection carrier for Continental Airlines.

Hackett said he called the governor's office when he learned of the deal but got nowhere. He said the deal would not have taken place without the state guarantee.

"We don't mind competition, we always have competition," Hackett said. "But we are the only one who has survived in these markets and for good reason: We are a fairly small airline based in Florida and we have the infrastructure to be successful.

Local officials in Tallahassee sought to regain service after Delta pulled out and with aircraft larger than Gulfstream uses, in particular aircraft equipped with lavatories, said Philip Inglese, assistant director of aviation for the city-owned Tallahassee Regional Airport.

Inglese said there was no pressure from legislators that he was aware of that initiated talks for the deal with Delta. The Delta deal became possible when the airline's merger with Northwest Airlines in October provided the opportunity to use Mesaba Airlines' aircraft.

"The Governor did not meet with any legislators concerning the contract," Ivey said.

The Delta connection flights by Mesaba will serve Tampa and Tallahassee with two round-trip flights on weekdays and one on Saturdays and Sundays.

The Continental Connection flights by Gulfstream serves Tampa and Tallahassee with four weekday flights and two Sunday flights.

Reporter Ted Jackovics can be reached at (813) 259-7817.

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