New Orleans says no to regional airline hub proposal

Published Oct 17, 2012 at 10:00 am (Updated Oct 17, 2012)

Baton Rouge businessman John Miller says the City of New Orleans' rejection of a proposal to create a new low-fare airline hub at Louis Armstrong International Airport isn't deterring his investor group, M7 Capital, from pushing ahead with the idea. "Oh no, not at all," Miller says, when asked if New Orleans' most recent rejection of the idea deals a deathblow to the proposal. Miller last week pitched the idea—which has been in the planning stages for years—once more to the Regional Planning Commission, which drafted a resolution urging New Orleans to consider the deal. New Orleans Mayor Mitch Landrieu's office has responded in a letter, saying the proposal has "serious defects" and "fails to offer sufficient evidence demonstrating that the rewards it promises are realistic." In the letter sent to Regional Planning Commission members following last week's meeting, Landrieu's office says providing such an incentive to one airline and not others "provides a government-funded competitive advantage" that could " 'cannibalize' passenger traffic from existing carriers." The letter says the $50 per passenger the state is offering in its incentive deal "far exceeds the profit margin of existing carriers." Miller says New Orleans officials—specifically MSY Aviation Director Iftikhar Ahmad—have continually opposed the deal, saying they have not been provided sufficient evidence that the state would see an adequate return on its investment. Miller maintains he has provided all the documentation that proves the deal is sound. Read the full story here, which contains access to the complete proposal, letter from Landrieu's office and Miller's response. —Steve Sanoski