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Higher air fares in Buffalo diverted more passengers to Cleveland, Erie, Pa., and Toronto, travel agents said Monday, as traffic here continued to slip for the first three quarters of 1996 below last year's frightful level.

"The past few months, Erie has even been beating Buffalo," said Elaine Weiss, a Fredonia travel agent. "We shop for customers and give them the best price. The only people who would rather fly out of Buffalo are business people."

The report arrived as construction of a new $56 million airport terminal reached the halfway point last week. The $187 million airport project is designed to make Buffalo a more appealing port of call, but high fares could undermine that effort.

The latest Niagara Frontier Transportation Authority statistics show passenger activity at Greater Buffalo International Airport was down 1 percent for the first nine months of the year compared with 1995. And 1995 was the worst year the airport has had since 1975.

"We're disappointed in the September numbers and the year-to-date numbers," said Robert Rakoczy, NFTA marketing director. "We've got to look at what we can do to improve our market share."

About 2.23 million people flew out of Buffalo through September, compared with 2.56 million the same period last year. Freight totals so far are up 16.9 percent from last year.

Experts cited Buffalo's lack of a low-fare carrier, the lack of the kind of regular discounts once offered by Continental Airlines and cutbacks by corporations trying to trim travel costs.

"We must attract a low-cost carrier," said Jean McDonnell Covelli, president of Travel Team of Buffalo. "Whether business travelers use it or not, it will drive fares down."

An air-service committee set up by the NFTA and Greater Buffalo Partnership has tried, so far unsuccessfully, to generate interest from low-fare carriers over the past year.

There are glimmers of hope. Southwest Airlines of Dallas, the nation's biggest discount carrier, is making a push into the Northeast. Buffalo isn't under consideration now, a spokesman said, but Albany is being looked at, and service has begun to Providence, R.I.

Delta Express, a low-cost subsidiary of Delta Airlines, will double its number of flights in January and expand into more cities. Buffalo meets all the criteria for service, spokesman Todd Clay said, but other communities also are in the running.

Meanwhile, Ms. Weiss said more Fredonia-area travelers are driving the extra two hours to Cleveland to take advantage of the deals offered there. Her observation was echoed by travel agents in Jamestown as well.

"Within the past eight to nine months, more people have been traveling through Cleveland and Erie, both business and leisure travelers," said Josie Graves, owner of Adventure Travel in Jamestown.

Some fares in Erie, a much smaller market than Buffalo, have trounced Greater Buffalo International Airport since Continental entered the market six months ago. Ms. Weiss said a Fredonia State professor recently saved $400 going to Oklahoma City from Erie versus Buffalo. Both cities are 45 minutes away.

"We'd rather keep the business in New York State," she said, "but when you present the different fares to the client, they're thinking of their pocketbook."

Jamestown travelers also are heading west. Up until two years ago, about 80 percent flew out of Jamestown and 20 percent went to Buffalo, Ms. Graves estimated. Now, 50 percent go to either Cleveland or Erie. Cleveland is almost three hours away, Buffalo is 70 minutes.

Colleen King, operator of Certified Travel in Jamestown, agreed that more people are going to Cleveland but said she hasn't noticed a big shift.

"Cleveland is definitely an option we give people because of the prices," she said, "but I don't see it as a major trend. We're fairly divided between Cleveland vs. Buffalo."

Some travel agents disagree about the numbers going elsewhere. The presence of Southwest in Cleveland lures budget-minded leisure travelers heading for domestic destinations, while Toronto is seeing more people heading overseas.

"We're seeing some slippage there (Cleveland) and also to Toronto," said Bonnie Rademacher, a vice president at Carlson Travel. "With Cleveland, we see more vacation travelers who don't mind traveling to save money."

Other modes of transportation benefited from the fallout over higher air fares. Trains are running full to Albany because of air fares that top out over $400, Ms. Rademacher said. Amtrak charges $76 round-trip.

The NFTA and the Partnership, in their campaign to lure a new air carrier, have been touting Buffalo's location near millions of people in southern Ontario and Western New York.

Rakoczy said the NFTA has begun advertising more in outlying communities such as Jamestown. The Buffalo airport has much to offer in terms of numbers of flights and service to California and Europe, he said.

Brochures have been sent to travel agents in Western New York and Southern Ontario, and newspaper advertisements have been run in Jamestown, Batavia, Dunkirk, Olean, St. Catharines and Hamilton.

The declining passenger totals at the airport also have NFTA officials concerned about repaying the bonds issued to build the new airport. They projected 1 percent growth each year for the project.

Besides ticket tax revenues, the money paid by passengers for concessions and parking also are part of the funding plan for the new facility.

"The financing of the airport is predicated on revenue numbers which are predictated on passenger numbers," said Richard T. Swist, NFTA executive director. "This year is not cataclysmic, but over time it is. There is an imperative to turning this situation around."

Luiz F. Kahl, a recently appointed member to the NFTA board, said the agency must become more aggressive in marketing its airport. Kahl has taken on air service as a priority.

"We are working with the existing airlines as well as other airlines not serving the airport to see if we can find a way to lower fares," Kahl said. "With our new facility, we have a terrific opportunity for Buffalo that we want to take advantage of."

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