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Nazareth, Pa., United States

Friday, August 05, 2016

Lehigh Valley International Airport is Flying High

In recent years, Lehigh Valley International Airport (LVIA) has been a source of disappointment. Though it once boasted over 1 million passengers a year, it was under 600,000 in 2013. An unwieldy board of governors was slow to act as a $10.4 million judgment grew to over $26 million. Sporadic budget shortfalls occurred as management yawned at a $1 million Hooters Air Fuel bill. But in an upbeat presentation to Northampton County Council at their August 4 meeting, airport Executive Director Charles Everett, Jr. claims that the airport is once again flying high.

Everett ticked off a number of reasons for his optimism.

·         *  LVIA is the fourth largest airport in Pennsylvania, right behind Philadelphia, Pittsburgh and Harrisburg. 
*         It includes four passenger airlines and nine non-stop destinations. 
*         Commercial passengers increased 10% last year, three times higher than the national average.  
*         Air cargo increased 58% last year because LVIA is now one of five Amazon air hubs nationwide.
*         LVIA is responsible for 6,200 jobs and generates $528 million in direct and indirect economic impact annually.
*        LVIA's annual operating revenue is $23 million. 
*         LVIA spends $16.8 million or 70% of its invoices, on goods and services here in the Lehigh Valley.
*         LVIA recently hosted the Solar Impulse which landed here before 4,000 solar enthusiasts with only two days' advance notice as part of its trans-world flight. Everett explained that is "what an airport is all about, making sure you can share it with your community."   

Perhaps the biggest reason for this turnaround is the sale of a 260-acre parcel in May to FedEx. The sale is the end of a nearly two decades' long property dispute resulting in a judgment. "That little episode is behind us, and we are starting a new chapter, said Everett.

The 1.1 million sq ft Fed Ex ground facility, near the airport, will be built at a cost estimated between $227 and $330 million, including $40 million in road improvements along Willow Brook Road, Race Street and Airport Road. At full build out, it will be able to process 75,000 packages per hour. It will be the largest Fed Ex ground facility in the U.S. By 2030, it will have created 3,000 new jobs.

Everett reported that the agreement with Amazon, which resulted in five daily flights in December, created 50 new jobs at the airport. "We all know that Amazon is a huge player in e-commerce, and when they grow, we believe that we will grow also," predicted Everett. He stated trucks move merchandise from Amazon as far south as Richmond.

In addition, LVIA intends to extend its terminal and embark next month on a $2.5 million multimodal transportation center to link all transportation modes. There will be seven bus slips and a covered walkway. The old firehouse, next to the terminal, will be demolished. The lion's share of the money for this project - $1.75 million - will come from the state.    

In response to questions from Seth Vaughn, Everett doubted that LVIA will ever surpass Harrisburg because of the Lehigh Valley's proximity to Philadelphia and New York. "Airlines do not like making investments so close," said Everett. "They're getting our passengers now." He explained that LVIA instead focuses on convenience as a lure. He noted it only takes seven or eight minutes to get through security here. Passengers increased three per cent so far this year, according to Board member Mike Dowd.

Dowd, who accompanied Everett, indicated that LVIA is trying to augment its revenue through general aviation.

Everett told Bob Werner that LVIA will definitely consider gambling in its lobby if that proposal becomes state law. "We like nonaeronautical revenue," he said, noting that this reduces the pressure of relying exclusively on airline revenues and permits him to lower airline costsairport.


James said...

Allentown to Chicago on United, 2 weeks from now, nonstop round trip: $1,078

Same trip from Newark on United: $310

This is part of what's holding the airport back. I can't justify that fare difference to my employer.

Anonymous said...

Spot on 8:08.
I took a flight out 1 time from LVIA only because my usual ride to Philly airport was unavailable. I paid well over $100 for that little 20 min. hop to change planes and get to my destination. Passenger service will never see a significant increase until LVIA reduces fees it charges airlines, which are passed on to its passengers.

James said...

I'll also note that comparable trips out of Harrisburg airport vs. Allentown are usually at least $200 cheaper than Allentown, in case someone wants to raise the small airport vs. large airport argument for fares.

Anonymous said...

One thing to bear in mind is that LVIA doesn't set the fares, the airlines do. How the airlines come up with the fares is beyond me, guess it depends on the day and time you want to go.

We took a vacation to Mexico 2 years ago. It was actually cheaper to fly from ABE to PHL then connect onto Cancun versus purchasing the Philly-Cancun direct flight.

Anonymous said...

LVIA will never be a hub location. Prices will always be higher, except for niche airlines running specific routes like to FL or Myrtle Beach. Other than that, it's whether the convenience outweighs the cost; sometimes it will, sometimes it won't.

I am not a warehouse fan, but at least the airport is getting freight traffic now. And operationally from what I understand it's more efficiently run. So all in at least it's not a negative like it was a couple years ago.

Anonymous said...

The unknown variable with the FedEx expansion is the traffic increase on 22 and Airport road, it's already a mess in the afternoon. This will cost a lot of money and create great headaches to create 3000 jobs.

FedEx should have built this hub in Harrisburg. The road infrastructure around the airport is better suited.

George Ruth said...

If higher landing fees to airlines was a result of the past financial problems at LVIA then with those problems behind them they should lower the fees. That will lower the fares, which will then increase traffic. Much like taxes of all kinds, when you lower them you get more economic activity.

Bernie O'Hare said...

They are way ahead of you, but the LV will never draw many airlines bc of its proximity to Philly and DC.