Triangle-based companies: We need multiple international flights at RDU
Triangle Business Journal, April 8, 2015
It's becoming a familiar story: How North Carolina lost out on jobs and investment.
This time, it's Mercedes-Benz, which elected to take its $100 million 1,000-job corporate headquarters to Atlanta, despite seriously considering the Triangle. While incentives were clearly a large factor (Georgia offered $23 million in incentives), Mercedes-Benz USA President and CEO Stephen Cannon had another point to beleaguer, one he repeated in several interviews about the decision: That the convenience offered by Hartsfield-Jackson Atlanta International Airport was a big boost in its favor. That airport offers nonstop service to more than 60 international destinations, including Mercedes-Benz's home country of Germany.
Local businesses are getting increasingly frustrated with an area that, despite its reputation as a growing hub for innovation, still only has one direct flight across the Atlantic. Excluding Canada, Raleigh-Durham International Airport offers only one nonstop international flight: London.
As the days continue tick by, sans direct flights to locations such as Frankfurt and Paris, Triangle economic activists and CEOs have said we're losing more than opportunities – we're losing money.
Joe Milazzo, executive director of the Regional Transportation Alliance, which has been actively soliciting business leaders to campaign for a new flight, repeats what airlines themselves have said: That it will likely be 2016 at the earliest before a carrier steps up to change that.
Read: RTA exec gives update on $500k RDU international flight enticement fund
Much of the talk has centered around two locations, Paris and Frankfurt. With the likes of BASF and Bayer CropScience both expanding in Research Triangle Park, it’s easy to see why many business leaders see Frankfurt as a front-runner.
But, despite all the talk, Milazzo says a concrete plan has yet to emerge.
“We’re trying to change that,” he says, pointing to corporate partners such as Cisco and First Citizens Bank, two of many companies pledging cash and in-kind services to market whichever carrier winds up taking a chance on RDU.
But it’s an uphill battle – further evidenced by presentations at a recent RTA event on the feasibility of attracting the flights. Experts such as Peter Belobaba, principal research scientist at Massachusetts Institute of Technology, laid out the case that a “hypothetical flight to Paris” is an expensive endeavor, and, even with regular traffic, may not provide the returns worthy of such a high-stakes bet by a carrier.
But to companies, already struggling to organize regular flights overseas, a new flight would bring in essential efficiencies.
Harald Kettenbach, corporate communications manager for Ludwigsburg, Germany-based filter innovator Mann + Hummel, is among those eagerly awaiting another flight across the Atlantic to Frankfurt, in particular. His firm opened an innovation hub at Centennial Campus about two years ago and runs its Americas business from Raleigh. He estimates between five and 10 people fly between RDU and Europe weekly from his company.
“Most of our people fly via Atlanta, New York or Washington. ... Some colleagues avoid RDU altogether," he explains, adding that some choose to avoid RDU altogether and instead go through Charlotte.
But it’s not just German firms with Triangle footprints such as Mann + Hummel, BASF and Bayer CropScience that are paying attention.
Take ChannelAdvisor (NYSE: ECOM), a Morrisville-based e-commerce software firm that, while it’s not actively lobbying air carriers, is a frequent international traveler. A London location makes it a heavy user of RDU’s sole European flight, says CEO Scot Wingo.
Across its employee base, ChannelAdvisor estimates 10 international flights happen a month. But some months have heavier traffic. Take April, with a ChannelAdvisor conference in London raising that number up to 100 flights.
“New international flights for RDU would be a big win for us saving time and money,” he says, adding that the routes he sees beneficial include Germany, China and Brazil.
“Getting to these locations, we have to hub out of JFK, ATL, MIA, DFW or LAX today, which extends the time and costs of the trips,” he says.
Milazzo speculates that a long list of Triangle CEOs agree. He points to the fact that many companies, including Cisco (Nasdaq: CSCO), Wells Fargo (NYSE: WFC), Duke Energy (NYSE: DUK), Red Hat (NYSE: RHT) and Duke University have already contributed thousands of dollars toward a regional investment fund aimed at enticing another international flight, as evidence.
"And if companies aren't on that list, don't take it as a lack of interest," he says. "It's early and we are still reaching out to companies."
Milazzo is trying to raise $500,000 to match a sum already pledged by the RDU Airport Authority.