Mineta (the airport, not the man) fights back

Locked in a bitter battle to with its northern neighbours, San Jose’s Norman Y. Mineta International Airport will use municipal funds to help lower airport rents in an effort to keep airline service.

A city council measure lets the airport use about $2.2 million to reduce the Cost per Enplaned passenger to $8.61 in this fiscal year (ending in June.) The cost, a key airport metric, had been $9.02, a figure that was inflated by the airport’s ambitious $1.3-billion modernization and expansion program, airport spokesman David Vossbrink says.

The largest carrier at Mineta, Southwest Airlines, with a 45% market share, approves of the airport’s expansion, he said. Southwest usually seeks a CPE of about $5, however. A prime rival to the San Francisco and Oakland international airports, Mineta sits in the heart of the Silicon Valley and has long attracted hi-tech traffic.

The moves, along with a traditional incentive program, may be used to persuade carriers to resume service to the East Coast, Mineta air service development director Ed Nelson says. JetBlue is ending its San Jose to Boston Logan flight, Continental is ending service to Newark Liberty and United ends its Washington Dulles flight this autumn, leaving the airport with only one transcontinental route, JetBlue to New York JFK.

Nelson said that the airport also hopes to persuade a foreign-flag carrier to begin Asian service. American, which had ‘de-hubbed’ domestically at San Jose starting in the year 2000, ended a Tokyo Narita flight in 2006, a major blow to the airport. Its only international service is to Mexico.

A special thanks to Airline Business Americas editor David Field for guestblogging.