Airport Still Seeks Passenger Service
Settlement of a financial dispute between the Moore County Airport Authority and Delta Airlines Inc. does not signal the end of efforts to attract air passenger service.
John Owen, chairman of the Moore County Airport Authority, said the authority did the right thing when it brought suit against Delta after the airline sent the airport a whopping $700,000 bill. Through the settlement in federal court earlier this year, the county and the state saved an estimated $145,000.
Despite the loss of Delta passenger service, Owen said the authority and airport supporters are re-emphasizing efforts to attract another airline to the county.
"We're still aggressively pursuing other airlines," Owen said.
However, he admits that it may take many months to achieve success because of current economic issues and related problems affecting the country as a whole and the airline industry in particular.
Attorney Tom Van Camp, who represented the Airport Authority in the suit, said the county did indeed save money by bringing suit against Delta last February. He said the state saved even more money.
The state paid more than 70 percent of the remaining $585,000 that the court said was owed to Delta. The authority paid the rest of the fee from existing airport funds, none of which come from taxpayer money.
Delta submitted the $700,000 bill on the basis of the 2007 contract that said the airline company would be entitled to compensation if revenues from seasonal flights did not reach guaranteed levels. The contract stipulated that the authority would reimburse Delta if the company lost money providing passenger service through the county-owned airport.
However, the authority objected to the $700,000 bill and cited several shortcomings of the airline, described as factors contributing to losses sustained through the local service. In its suit, the authority mentioned such things as flight cancellations, scheduling issues, complaints about high fares and the loss of baggage. The baggage complaint was a sore point, because much of the airport traffic is made up of golfers flying in to Moore County to take advantage of numerous golfing opportunities.
The authority's suit was initially filed in Moore County Superior Civil Court, but at the request of Delta, the court granted a transfer to federal Middle District Court on the grounds that the defendant is not a North Carolina-based company. Delta is a Delaware corporation with its principal place of business in Atlanta.
Van Camp said the authority's complaint seeking a declaratory judgment was dismissed in federal court last summer after the two parties reached a settlement agreement. Had they not reached agreement, the authority was prepared to take the case to court.
As part of the authority's recruitment effort, the state agreed to underwrite more than 70 percent of the incentive agreement offered to attract the airline passenger service to Moore County.
Van Camp said the settlement represents a saving of about $125,000 to state taxpayers because the bill would have been much heftier otherwise. With the addition of interest, the final payment would have been about $730,000.
"The state fully supported the action (the authority's lawsuit) but couldn't join the suit because it wasn't a party to the contract," Van Camp said.
The state's agreement was a separate one with the authority.
Owen said the state provided grant money as part of the airport incentive package to attract the airline, but the state was not directly involved in the agreement between the airline and the authority.
"We felt we really got a bad deal with Delta," Owen said.
The contract between Delta and the authority was signed in June 2006, and the airline began providing flights from the local airport later that year. Delta pulled out in December 2007 and provided no more seasonal or other scheduled flights through Moore County.
The airport had been without passenger service since April 2002 when US Airways Express discontinued flights following the economic downturn precipitated by the Sept. 11, 2001, terrorist attacks.
Passenger service is popular in Moore County because of its resort tourism attractions, a major economic enhancement for the community.
Contact Florence Gilkeson at 947-4962 or by e-mail at email@example.com.
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