A consultant for the Spanish company selected to operate the Niagara Falls International Airport under a 99-year lease assured the City Council on Tuesday the company intends to operate the airport for a profit.
Paul B. Gaines of Houston said Cintra Concesiones de Infraestructuras de Transporte hasn't had a failure in 30 years and is "not in the business of losing money."
Gaines was responding to questions by Council Members Paul A. Dyster and Frances M. Iusi about whether the $2 billion publicly traded company intends to do what is needed to make the airport turn a profit or whether it wants to hold on to it in the event that Niagara Falls starts its comeback while using it as a tax write-off.
"They cannot afford to not aggressively pursue this airport. They are not going to put up $10.1 million without the opportunity to make a return on that investment," Gaines said, adding that when Cintra bids to operate other airports, those communities will look at Cintra's track record here.
Cintra is committed to spend $10.1 million over a 13-year period on marketing, promotion, capital improvements and drawing up a master plan. Gaines also said Cintra can't achieve enough efficiencies in the operation to overcome the more than $1 million the airport loses each year. It has to increase usage, and that means passengers more than cargo.
"Passengers spend money. A package does not," Gaines said.
Council members and members of the public have been concerned that Cintra might concentrate on cargo business, when what the local economy needs is people coming here, sleeping in hotels, eating in restaurants and spending dollars brought in from the outside.
Gaines said the entrance into the Buffalo market of low-cost commercial carriers such as Jet Blue and Southwest -- since Cintra first bid on operating the Niagara Falls airport in 1999 -- has necessitated a change in approach. Cintra had hoped to snag Jet Blue but now will focus on charter business. Noting that 10 million to 12 million tourists come here annually, Gaines said: "That's a lot of folks. Give me 2 1/2 percent of that."
Gaines said to turn the airport around as quickly as possible, Cintra has to go after passenger business. But first it must upgrade the terminal to provide services that the traveling public expects, such as enclosed walkways between the terminal and planes.
Gaines also said Cintra will need the help of the tourism industry to attract charters. The tourists will need places to go, sleep and ground transportation to take them there, he said.
The Federal Aviation Administration will soon open a 60-day period for comments on the tentative contract between Cintra and the Niagara Frontier Transportation Authority, which owns the airport. The NFTA decided to privatize the airport amid mounting criticism that it deliberately had avoided developing the airport to eliminate competition for the Buffalo Niagara International Airport in Cheektowaga, which it also owns.
The appearance of Gaines, Lawrence M. Meckler, NFTA executive director, and other NFTA officials at Tuesday's Council meeting was their first public appearance to discuss the terms of the recently released contract.
Council Chairman Anthony F. Quaranto asked Meckler if the NFTA, which also operates the Metro bus system, will find a way to help this area with the money it will save by giving up airport operations. Meckler said NFTA will continue subsidizing the airport's losses during Cintra's first three years.
"We still have interests in the area. We're not going to desert Niagara Falls," he added.
Quaranto asked if he could get that in writing.
In other business, the Council:
Added a late resolution to approve taxicab fare increases of 30 cents for the first one-sixth of a mile, and five cents for each additional one-sixth.
Tabled action on abandoning a 180-foot unpaved right of way on 86th Street from Rivershore Drive to the Niagara River after a public hearing where two speakers were in favor and four opposed. Quaranto said he will ask the LaSalle Business and Professional Association if it would like to lease the property to provide public access to the Niagara River.
Approved a $98,750 contract with Ber-National Automation of Rochester to install automated arms and ticket dispensers at the two downtown parking ramps. After the installation, the city will impose a flat fee of $4 to park in the ramps.
Refused to restore the controversial $43,212 deputy parks and public works director's position, which was eliminated during the budget process.