Reinventing MacArthur Airport a challenge, experts say

A new $10 million customs station for international passenger flights is being trumpeted by local, state and federal officials as the catalyst to cure what ails Long Island MacArthur Airport — which has been suffering a decline in air carriers, passengers and revenue since 2007.

Industry experts, however, warn that the Islip Town-owned airport faces major obstacles as it seeks to lure new carriers in the face of competition from nearby Kennedy Airport.

For example, spending $10 million to build the facility doesn’t guarantee that Customs and Border Protection will staff and equip a new operation at a small suburban outpost — and if it does, the town may have to reimburse the agency for its services. In addition, the airport’s longest runway, at only 7,006 feet, also could dissuade international carriers that often need longer runways to carry fuel and passengers on long flights, experts said.

MacArthur has been in decline for almost a decade. Southwest Airlines and American Airlines together offer 15 flights a day, and are the airport’s last remaining carriers after PenAir and Allegiant Air pulled out in 2014 when both said they couldn’t make money there. The airport lost more than half its flights between 2007 and 2015, and has lost at least $5.5 million since 2010, town records show.

While the domestic airline industry has spent much of the past decade merging and consolidating, international air travel has continued steady growth, and attracting international service is seen by officials as a ticket to prosperity that could reinvigorate MacArthur.

$6M for customs station

To aid that effort, Gov. Andrew M. Cuomo recently pledged $6 million in the proposed state budget to help build the 11,000-square-foot customs station and “boost this underperforming regional asset and promote economic growth through exports, business expansion and tourism,” a Cuomo spokeswoman said.

Sen. Chuck Schumer (D-N.Y.) has pushed for MacArthur to become an international airport since at least 2013. In a recent letter to customs Commissioner R. Gil Kerlikowske, Schumer urged collaboration with airport officials and suggested MacArthur be designated a “user fee airport” — meaning it would be staffed and equipped by customs, but the agency would be reimbursed by the airport for the cost of running an inspection facility there.

SEE PHOTOS7 airlines that flew away from LI's MacArthur Airport

Cuomo’s announcement and Schumer’s letter capped months of funding promises and news conferences that sought to underscore MacArthur’s potential — if only it could secure the means to host international flights.

Suffolk County Executive Steve Bellone promised $1 million toward the new customs facility in September, the state Regional Economic Development Council awarded $3 million in December, and Islip’s Industrial Development Agency will also grant $1 million to the project, said Caroline Smith, a spokeswoman for the Town of Islip.

Airport officials say the promised facility, a temporary version of which could be operational this summer, has piqued the interest of new carriers.

“This is by no means a ‘Field of Dreams,’ ” Smith said. “We have two airlines interested. However, due to . . . [nondisclosure agreements], we are not permitted to disclose those names until they make a formal announcement.”

Turnover and uncertainty

A source with knowledge of the effort said discussions with a couple of international carriers are at a sensitive point, and the recent turnover and uncertainty after former airport director Robert Schaefer and deputy Allan Smith suddenly left “isn’t necessarily helpful to moving those discussions along.”

The source also said Southwest, the airport’s main carrier, is opposed to the new facility because the airline wants to feed international traffic through a new customs site in Fort Lauderdale and doesn’t want international competition out of MacArthur.

Southwest did not return requests for comment.

Another source familiar with the project said building the customs facility might be MacArthur’s best and only hope to lure new service and recover from losing more than half its daily flights.

MacArthur, the Island’s only commercial airport, opened its first terminal building in 1949, but its fortunes changed dramatically in 1999 when Southwest Airlines began flying there: Airline flights nearly tripled, from about 8,000 in 1998 to almost 22,000 in 1999.

MacArthur’s biggest year was 2007, when it had about 27,000 airline flights, according to the Federal Aviation Administration. After that, Southwest started cutting back at some of its smaller airports and focused on moving into larger hubs, according to industry experts.

Flights, passengers declined

The number of flights at MacArthur has dwindled every year since, to 9,063 last year, the FAA reports.

Passenger numbers also have plummeted since 2007 — from almost 1.2 million to about 646,000 in 2014, the latest FAA data show.

The sharp decline in service at MacArthur also hurt the facility’s bottom line: From 2010 to 2013, the airport spent about $5.5 million more than it made. The town would not disclose more recent revenue and expense figures, but Schaefer told Newsday recently that MacArthur lost $132,000 in 2015.

Town officials said they’ve been in talks with customs for months, and hope to open a temporary $1 million inspection station by midsummer, adjacent to where the airport has a customs facility for private international flights.

The temporary facility, to be located in the terminal’s west concourse, will serve commercial flights for up to two years, or until the new building is completed, Smith said.

The town intends to build the new facility if international traffic takes hold at MacArthur, but there’s no guarantee that customs will staff and equip it. If customs initially designates MacArthur as a user-fee airport, the airport will be on the hook for all expenses involved with running the federal inspection station, including paying at least one full-time staffer, which customs estimates would cost $140,874 in the first year and $123,438 in subsequent years.

Before the facility can be built, however, customs would have to formally express interest, a source said. When the building is 85 percent complete, the agency would do an inspection to ensure it meets specifications and then decide whether to staff it based on its budget and whether it’s believed to be a good use of resources.

Airport officials want to secure service to Europe in narrow-body planes — those with single aisles — that can take off and land on the airport’s 7,006-foot-long runway.

“The greatest economic impact for Long Island will be flights from Europe. One European flight per day for one year has an economic impact of $194 million a year and will bring 1,200 new jobs to the region,” Smith said.

Kennedy not at capacity

But experts said regularly scheduled service to Europe is unlikely for the suburban airport, which would be competing with hundreds of daily international flights from Kennedy Airport — a facility that is not yet at capacity.

“The idea of trying to create more options is understandable at MacArthur, and there’s been a lot of interest in trying to make that airport something more than it is today,” said Richard Barone, director of transportation programs for the Regional Plan Association, an urban planning think tank based in Manhattan.

“For MacArthur to compete with Kennedy, that’s not something you’re going to see,” he said. “You’re not going to see that level of service, that kind of selection able to shift to MacArthur Airport. . . . It needs to be paired with some kind of business plan for how they’re going to engage — there has to be the market for it.”

Kennedy also isn’t fully booked yet, he noted. When core hub airports become too congested, “low-cost carriers sometimes exploit the airports on the fringe,” Barone said. “We haven’t really seen that yet; our airports are really packed, but there is still space.”

Barone said international cargo or business travel might be an option for MacArthur, but it’s less likely that commercial airlines would rush to add flights there.

“Whatever happens, this customs facility needs to line up with what the market is actually capable of generating for them, and that’s how the airlines work, too — they do a market analysis to see if there’s a demand for their services or not,” Barone said.

Longer runways desirable

Despite the town’s insistence that the airport’s runway is long enough for flights to Europe, some experts have said longer runways are more desirable. At Kennedy, the shortest of the airport’s four runways is 8,400 feet — the longest is 14,572 feet.

“Transatlantic and transcontinental [airlines] and even just as far as Iceland would probably be looking at a longer runway than 7,000 feet,” said Michael Boyd, president of Boyd Group International, a Colorado-based aviation consultancy.

Smith said the airport’s “primary runway is sufficient for the type of aircraft being used by both carriers,” referring to the two unnamed airlines that she said have expressed interest in MacArthur.

Runway length may have already hurt the airport’s chances with some carriers, however. The source with knowledge of the effort at MacArthur said one international airline that initially wanted to fly from Ronkonkoma backed off because its longest runway was too short.

“Realistically, the only places I think people would end up going from there are Canada, in terms of international traffic. No one is going to be flying to Europe,” said Phil Derner, an industry consultant and founder of NYCaviation.com. “They should find some airlines that would say, ‘Hey, if you guys can build this, we will come.’ ”

There are some international airlines — Iceland-based Wow Air, for example — that have shown a willingness to enter smaller U.S. hubs in recent years, said Robert Mann, a former airline executive and president of R.W. Mann & Co., an aviation consulting group based in Port Washington. MacArthur officials told Newsday last June that Wow Air was interested in providing five or six flights a week to Iceland from the Ronkonkoma hub if a customs facility could be built.

“They go where they can make money. If it has a customs facility that facilitates making money, there are a couple of carriers who this year have started one-stop services from eastern U.S. cities like Baltimore or Boston to Iceland, and then on to points in Europe,” Mann said.

International flights sought

But a few flights a week might not validate a large investment from local, state and federal government, he warned.

Loss of air service is one of the biggest challenges facing airport operators nationwide, said Scott Elmore, spokesman for Airports Council International-North America, a research and lobbying group.

Many of those airports are clamoring for international flights and customs resources to bring them back from years of industry shrinkage, Elmore said.

“You have airports all across the country trying to make the case to Customs and Border Protection that they should be allocating staff and resources to their airports,” he said, “so an airport going out and building something might not guarantee they’re going to get the resources to staff it.”

In addition, having a staffed facility doesn’t guarantee international air traffic, experts said.

Barone pointed to Stewart International Airport in upstate Orange County, which he said has a customs station but has had no international commercial flights in years.

Airlines can also be fickle, experts warned.

In MacArthur’s history of courtship with carriers, there have been multiple negotiations for new service that never materialized. For years, rumors of JetBlue and Air Canada flights at MacArthur were peddled by politicians and town leadership.

Both Allegiant Air and PenAir were at the airport for less than a year before pulling out in 2014. When PenAir announced its departure, airport officials told Newsday they were negotiating to bring in a new carrier to provide flights to Boston as early as the following week. No new service was ever announced.

“Whenever you hear the stuff about ‘We have an airline, we can’t tell you who it is,’ most of the time that’s because they don’t know who it is,” said Boyd, the consultant. “When you really look at it, it’s going to be pretty hard with all the international service at Kennedy — it would have to be a charter-type service.”