FOX19 Investigates: Documents reveal cozy relationship between CVG & Delta

Published: Feb. 21, 2013 at 3:42 PM EST|Updated: Dec. 2, 2013 at 8:21 PM EST
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CVG CEO Candace McGraw
CVG CEO Candace McGraw

HEBRON, KY (FOX19) - The Tri-State airport with a name so long even passengers refer to it by its airport code, CVG, is facing one of the most challenging times in its history. A FOX19 investigation reveals that the number of passengers traveling through Cincinnati/Northern Kentucky International Airport has fallen 71% in the past decade. In 2002, it served 20.8 million people. By 2012, that had fallen to just 6.04 million.

Despite repeated requests over the past couple of months, CVG leaders never agreed to an on-camera interview with FOX19. No member of the board got back to us. And the airport's new CEO, Candace McGraw, ignored our requests. However, internal documents FOX19 obtained show that airport leaders clearly know they must do something to turn around CVG's fortunes.

McGraw's performance review from last July, which FOX19 obtained, lists "Improve air service" as the number one priority for her. It's in a category titled, "What Should She Start Doing?"

Yet despite what the board wants, its own cozy relationship with Delta is clearly evident in the latest lease it signed with the airline. As part of Delta's hub system, CVG was at one time riding high. Then came the bursting of the housing bubble in 2006, the Great Recession in December 2007, and Delta's merger with Northwest Airlines in 2008, after which Cincinnati  was dropped as a hub in favor of Detroit.

In 2005, there were just under half a million flights per year at CVG. By 2012, there were only 143,447 flights.

"This airport is holding us back big time," Gov. John Kasich (R-Ohio) told journalists recently at a news conference with Kentucky's governor and then-Secretary of Transportation Ray LaHood. "We're right now being a captive of Delta. We've gone from I don't know how many flights a day down to just a sliver."

It's the kind of crisis that can keep a city like Cincinnati from attracting more big businesses and jobs to the area. In fact, a source who's well-connected with businesspeople in Cincinnati tells FOX19 a company that's already located here might not have if its executives had known how hard it is to fly out of CVG, in terms of finding affordable airfares and direct flights to other regions of the country.

"Yeah, it'll be much harder to attract business to the area and keep what you have," said Janet Bednarek, a nationally known airport historian who teaches at the University of Dayton. "I've read a few things about Procter & Gamble complaining about the lack of particularly international flights out of CVG because Procter & Gamble is just all over the world. The only international flight now is to Paris. Procter & Gamble is huge in China. And that's a disincentive for Procter & Gamble."

Like the governor, Bednarek believes the time has come for CVG to disentangle itself from Delta.

"The officials at CVG and Delta have got to come to an agreement that if that airport is going to survive it's got to have some competition," she said.

However, in the latest lease Delta signed with CVG, which was obtained by FOX19, evidence of the entanglements between the two remain. On page 16, under the heading "International Gates in Concourse B," the lease says that CVG may only use gates B-6 and B-9 for international flights, may only allow other airlines to use planes at B-6 that are comparable in size to a 767 or less, while at gate B-9 aircraft must be no bigger than a 747. Plus, the air carrier using those gates must provide CVG with proof (in the form of a letter of credit or bond) that it has access to enough money for "three (3) months worth of anticipated rates and charges."

For any upstart airline facing six-figure investments at each airport where it tries to gain entry, having three months' worth of cash or credit can be a challenge. It's barriers like these that Delta has erected to make it hard for low-cost airlines to find a home at CVG, according to multiple airline experts contacted by FOX19.

Delta did not respond to FOX19's questions about its business practices at CVG.

Meanwhile, a low-cost airline that is making a home in the Tri-State is Southwest. But it's not at CVG. The air carrier that's so popular with travelers for its cheap fares and rambunctious cabin crew has decided to stay at Dayton International Airport now that it has purchased AirTran, which was already in Dayton.

"You mean you want to see my Ouija Board now?" Dayton's airport director, Terry Slaybaugh, asked when we inquired about how much influence executives like him have over airlines' decision-making process. "I mean, we don't."

According to Slaybaugh, selling an airport is a matter of constantly knocking on the doors of airline officials, asking them to move into your market or increase the number of flights in your market if they're already there.

He says he does not envy the position CEO Candace McGraw finds herself in at CVG.

"You know, unfortunately we don't have control over decisions like the one Delta made," he said. While his staff must make sure passengers have a pleasant experience when they come through Dayton's airport, he said, "(Airlines) don't have the same commitment to the community. They could change their service tomorrow. There's very little we can do about it."

But FOX19 aviation analyst Jay Ratliff says McGraw and her staff have been making those meet-and-greet trips often. He credits CVG's leaders for convincing Frontier Airlines to test the Cincinnati market by offering a flight per day to Denver, except for Saturdays, starting May 17.

"I think that we are so starved for a decent low-cost carrier, an airline to compete against the high fares that we have right now with Delta, that the passengers will respond," Ratliff said.

He points out, though, that Delta drove-out low-cost carriers AirTran and Vanguard. It's also not lost on him that had AirTran survived at CVG, Southwest might have made a home in Cincinnati rather than Dayton.

"Now it's up to the community to respond so not only can we keep Frontier but we'll see them add additional service," he said.

In the past, Ratliff said, Delta lowered its fares to match AirTran. Then most Cincinnati travelers stayed with Delta so that they could continue to accumulate SkyMiles rewards program points.

Many of those passengers are now traveling to Dayton, though, fed-up with the high prices Delta charges. In fact, a recent survey showed as many as one out of three passengers at Dayton's airport is from the Cincinnati metro area. With Southwest moving in, that number could grow. But Slaybaugh insists he doesn't want to make too much of the competition between his airport and CVG.

"When (economic development leaders) go out and talk to Fortune 500 companies about coming to this region," he said, "we always talk about the fact that we have two airports."

His airport provides low-cost flights while Cincinnati offers more direct flights.

Slaybaugh is losing Frontier, though, because the Denver-based carrier doesn't want to compete with Southwest Airlines in Dayton. Although much better known on the West Coast, Frontier has the kind of cult following that pushed Southwest into the major leagues of aviation. Frontier is known for low fares, nice aircraft, friendly flight crews, and DirecTV.

So, who knows? It could be the beginning of a turnaround at CVG.

"Now that traffic on I-75 is going to be reversed," Ratliff predicted.

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