Airport board squabbles over JetBlue deal

Rep. Chip Limehouse, Chairman of the Charleston County Aviation Authority. (Brad Nettles/postandcourier.com) 9/20/12

The turbulence on the Charleston County Aviation Authority shows no signs of letting up.

This time it’s over incentives for JetBlue Airways, a package almost identical to the one offered to Southwest Airlines two years ago that hardly raised an eyebrow.

During Thursday’s airport agency meeting, former U.S. Rep. Tommy Hartnett, an airport board member, wanted to know why the entire board did not know about the announcement ahead of time and who approved the $200,000 incentive package to lure the low-cost carrier to Charleston.

JetBlue announced last week that it will start two nonstop flights to New York and one nonstop flight to Boston each day starting Feb. 28. Tickets went on sale Thursday.

“It’s a wonderful addition to our list of carriers,” Hartnett said. “Why wasn’t the authority informed of it? Where did we find $200,000 in the budget? We are charged with running this airport, and the addition of another carrier is something this board should know about.”

Hartnett was joined by board member and former judge Larry Richter in questioning the approval process, saying incentive deals need more oversight to prevent an over-commitment of limited airport money should more than one airline decide to come to Charleston in any given year.

In 2009 the airport board passed a standing incentive package to lure new airlines to Charleston International Airport, and it has been used twice, Airports Director Sue Stevens said.

The package includes up to $150,000 in redeveloping the terminal area for a new airline, $10,000 to help market the new arrival and waived landing fees based on number of flights for a promotional period. Southwest Airlines received the same incentive package.

The total incentive package for both airlines was about $1 million each. In both instances, nearly three-quarters of the total came from the Charleston Area Convention and Visitors Bureau.

Hartnett wanted to know why the CVB took the lead to bring JetBlue to Charleston, asking if it was now negotiating deals to bring airlines to Charleston instead of the Aviation Authority.

“I am shocked,” CVB Executive Director Helen Hill said of the turmoil over the incentives.

“We didn’t negotiate anything for (the airport),” Hill said. “Our part of it is advertising-based. They want cooperative advertising dollars. Our goal is to bring new visitors to Charleston. People who fly generally spend more money, see more attractions and eat in more restaurants.”

The effort to attract JetBlue and Southwest also included the Charleston Metro Chamber of Commerce and the Charleston Regional Development Alliance along with airport officials.

The incentives, which are part of a deal usually cloaked in secrecy until it is announced, will be presented to the board in October for ratification, Stevens said.

“This is about negotiating a deal and bringing it back to the board,” she said, pointing to the 2009 policy that requires board action after it is announced. “You have to have the flexibility to go out and negotiate.”

Stevens also took up for the CVB, saying it did a lot of the legwork and courting to land JetBlue.

Not everyone on the airport board had a problem with being kept in the dark.

North Charleston Mayor Keith Summey said negotiations often involve confidentiality agreements to keep competitors from finding out what’s going on and, if too many people know, it could jeopardize the deal.

“People have the ability to have loose lips and the ability to sink ships,” he said.

Board member Teddie Pryor agreed.

“Everybody can’t keep a secret,” he said. “I don’t want to jeopardize a deal. They can notify us when they want to.”

Only a handful of people were aware of JetBlue’s impending announcement, and the airline controlled when it would be announced, Hill said.

Aviation Authority Chairman Chip Limehouse said he did not know about it until a few minutes after JetBlue officials voted for it, the day before it was publicly announced on Sept. 12.

After the debate over incentives Thursday, he wanted to send a message to the new carrier: “We are one thousand percent behind JetBlue.”

The board agreed to take a look at the five-year-old policy at its next meeting and review the incentive package annually.

“We might need to increase those incentives,” Summey said.

JetBlue declined to comment.

Reach Warren L. Wise at 937-5524 or twitter.com/warrenlancewise.