After years of achieving very little, the Global TransPark is finding it increasingly difficult to get public money. Under increasing pressure to turn hundreds of millions of dollars of public investment into a meaningful return, the Global TransPark Authority, which runs the GTP, is working on a new business plan. Unfortunately, there’s very little in the draft executive summary of its new business plan to suggest that the GTP will be able to cover its costs any time soon.
The GTP envisions several scenarios under which it might break even by 2004. The best case involves the airport receiving a large contract from the Transportation Security Agency to serve as a training facility. The GTP estimates that it could make up to $2.5 million off a $5 million contract with the federal agency. However, it’s not obvious why the TSA would pick Kinston or pay its high asking price for whatever facilities it might be in need of. Obscure, underutilized airports are not exactly in short supply in the United States. Of course, if the TSA wanted to do whatever training it were interested in doing in a totally remote and secure location, it could always opt for a facility the federal government already had complete control over — like a military base. One would also hope that the TSA would be capable of negotiating a better rate than the 100 percent markup the GTP is hoping to obtain.
Should the scheme to get work from the TSA fail, the GTP’s fallback plan to cover its costs in the near future are built largely upon wishful thinking. The draft business plan notes that the authority can break even if it cuts costs, is able to regain commercial airline service, and succeed in its land-development plans. The latter two elements are questionable at best. The cost cutting would be unnecessary if it can secure more flights and more tenants for its facilities. The GTP does not project that it can break even any time soon merely through its land-development efforts or attracting businesses to the GTP.
The GTP claims to be negotiating with several airlines and hopes to attract a “major airline” by late 2003. A Lenoir County GTP booster group has made clear that the aim is to obtain regional jet service with the destination probably not being Charlotte. Its talking points include bashing both the capabilities of other eastern North Carolina airports and the airline that serves them. The reasoning behind this is obvious. In 1998, 14,853 people boarded commercial flights in Kinston. By comparison, that same year passenger boardings were 50,894 in Greenville, 65,583 in Jacksonville, and 68,723 in New Bern. In January 2000, a US Airways commuter affiliate dropped service to Kinston, noting that it was losing $1million per year flying to the city. The market had spoken in 2000 — there simply was insufficient demand to justify service to Kinston.
Conditions have changed dramatically in the airline industry since then — and not for the better. Fewer people are flying because of the weak economy and the aftermath of September 11. U.S. airlines lost $8 billion last year and are expected to lose another $8 billion this year. In such a market, expecting any airline to start service to Kinston is unrealistic in the extreme. If an airline can’t make money in Kinston during good times, how can one hope one to so during bad times? Even in the unlikely event that another airline chose to start service to eastern North Carolina, the destination would not be the demonstrably smaller market of Kinston.
On the land development side of things, the GTP’s new game plan calls for it to build and rent out two 100,000-square-foot buildings within the next year or so. After that, the GTP hopes to add another building a year. Leases, the GTP notes, would not be subsidized; the aim is paying customers, not merely to fill space. Perhaps this shift in focus is a good thing, though the GTP has proven not particularly good at attracting businesses to its industrial park.
One obvious element missing in the new business plan is any mention of the concept upon which the GTP concept was based — just-in-time manufacturing using an airfield as a hub for the delivery of raw materials and shipping out of finished goods. Yet, without that justification, as improbable as the last decade has proven it to be, the GTP is just another industrial park sitting beside an airport. And why that concept deserves any state money is unclear.