A major discount airline is poised to offer new service at Charleston International Airport, but first the county will need to raise money for incentives by imposing a new 5 percent fee on car rentals, local officials said Wednesday.
"It will be that simple," said Helen Hill, executive director of the Charleston Area Convention and Visitors Bureau. "If the fees are approved, a low-cost carrier will come."
All indications point to Southwest Airlines being that carrier, but local officials and the airline would not confirm that.
County Council Vice Chairman Elliott Summey said the carrier is a major airline "that can look eye-to-eye with Delta or United" and "they don't charge for certain things people take on planes."
Southwest Airlines has been running a major advertising campaign touting its policy of not charging a fee for checked luggage.
Southwest currently offers no service in South Carolina, but Greenville has been aggressively courting the carrier, and supporters of a proposed state incentive plan have said it could attract Southwest to Charleston and Greenville.
The S.C. Air Services Incentive and Development Fund has been held up in the Legislature by Midlands lawmakers who fear that the Columbia airport would suffer if Southwest offers service in Charleston and Greenville.
Hill said she thinks a state incentive plan still is possible this year, and said the proposed county rental car fee could provide matching funds.
Southwest has remained mum on the possibility of new service in Charleston.
"We do not currently have any plans in place to serve new airports other than Panama City (Fla.) opening in May," Southwest spokeswoman Christi Day said Wednesday.
She added that the Southwest team regularly meets with aviation authorities and cities, and sometimes makes quick decisions to launch in a new market. Southwest added service to Panama City after a private developer agreed to subsidize the operation.
Colorado-based airline expert Mike Boyd said that's the only way South Carolina cities will lure similar business.
"You better have somebody open their wallet," Boyd said.
He cautioned that while discount carriers might lower prices, they also could drive out existing services. And a surge in rental car prices could turn off potential visitors, he said.
"The name of the game is access to the rest of the world, particularly for Charleston, particularly for Greenville-Spartanburg, which have international trade," Boyd said. "If you get a flight to Orlando but lose Chicago connecting to Beijing, that is a net loss."
Hill and Summey said Charleston ticket prices soared after discount carrier AirTran pulled out of the market in December, and a new discount carrier could reverse the trend.
"With AirTran leaving, prices have gone through the roof again. It's horrible," Summey said.
Hill said in a letter to County Council that "unreasonably high airfares are cited as the number one reason that meeting planners choose another location over the Charleston area."
The plan to impose a 5 percent fee on car rentals is aimed at raising $1.5 million yearly for incentives to attract a discount carrier, with the money to be used for efforts such as joint marketing.
"Obviously, local people rent cars, but the majority of people who rent cars in Charleston County aren't Charleston County residents," Summey said. "Let the tourists help pay for it."
The fee would work like a tax on the car rental firms, which would be required to pay monthly an amount equal to 5 percent of gross rental charges. The fee would apply to any passenger vehicle rented or leased for 90 days or less in Charleston County.
It was proposed by the Charleston Visitors Bureau with support from the Charleston Metro Chamber of Commerce and the Charleston Regional Development Alliance, and will be considered by Charleston County Council at a committee meeting at 4:15 p.m. today at the Public Services Building in North Charleston.
Summey, the chairman of council's Economic Development Committee, expects a unanimous vote recommending the plan to the full County Council, which could vote on the fee plan next week. Like Hill, Summey said approval of the fee will bring a discount carrier to Charleston.
"There's an absolute deal on the table," he said. "It's going to do great things for Charleston."
The incentives paid for with the fee would come in addition to incentives offered by the Charleston County Aviation Authority.
Summey said car rental companies are on board with the plan because a new discount carrier would mean more customers for them. Attempts to get the car rental companies' positions Wednesday were unsuccessful, with corporate media contacts located out of state saying they were unfamiliar with the proposal.
Before AirTran's arrival in Charleston, the area was one of the most expensive markets to fly into. The carrier was credited with lowering local fares and creating $80 million a year in savings.
The Charleston Visitors Bureau estimated that the unidentified discount carrier the new incentives are aimed at would save Charleston air travelers $180 million yearly, and bring 200,000 more travelers through the airport.
Hill said that if a new carrier agrees to serve the area, it would probably take six to eight months for service to begin.
Officials had considered, but rejected, the idea of providing $500,000 to AirTran to keep the airline here through January. Beyond that, a consultant advised, the cost would have been $2 million annually.
Following AirTran's departure, one local travel agent tracked tickets to New York as they soared from a little more than $200 round-trip without a required overnight stay to nearly $800.
Officials opted not to subsidize AirTran, but just weeks after the company announced its plan to leave, the Aviation Authority created the first-ever local incentives package for new or expanded flight services.
The deal includes temporarily waiving landing fees, which run about $3,500 per year for a regional jet with one flight a day. It also allows for as much as $10,000 in marketing assistance and as much as $150,000 in startup costs, including computer equipment, kiosks and terminal improvements, for new carriers.