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Indianapolis airport hopes to see cargo boost from new Paris flights

September 7, 2017

Business leaders say they see at least three areas of opportunity in the new nonstop Indianapolis-to-Paris Delta Air Lines flights announced Wednesday—leisure travel, business travel and cargo.

“This creates a different reality for the airport,” Indianapolis Airport Authority Executive Director Mario Rodriguez said of the new Paris flights. “Paris does two main things—it connects passengers and businesses, and it connects cargo.”

The new flights, which will make up the state’s first-ever nonstop transatlantic air service, begin operation May 24 from Indianapolis and Paris’ Charles de Gaulle Airport, officials announced Wednesday.

Rodriguez said the airport and Delta have already discussed expanding the airline’s existing cargo operations in Indianapolis because of the new Paris service.

Much of that expansion, Rodriguez said, will be attributable to GE Aviation, which has an aircraft engine assembly facility in Lafayette. The LEAP-1A engine cores that the facility produces for Airbus are sent for final assembly in suburban Paris.

“GE Aviation’s Lafayette jet engine plant is excited about the new flight as an option to transport their 1 million pounds plus of planned shipments to France annually,” the company said in an email to IBJ.

London still calling?

Over the past 18 months or so, airport leaders had been vocal about their desire to land a transatlantic flight, and they had named London at the top of their wish list.

But they said the nonstop service to Paris accomplishes many of the same things that are needed from a London flight.

Delta is a partner with Air France, which operates a hub at Charles de Gaulle, said Marsha Stone, the airport’s senior director of commercial enterprise. And from Charles de Gaulle, travelers can fly to more than 100 destinations in Europe, Africa, the middle East and India.

“Air France has such a strong global network from Paris,” Stone said.

In general, Stone said, 55 percent of passengers departing Indianapolis are leisure travelers, with the other 45 percent traveling for business. It’s too early to say what percentage of the Paris flights will be for leisure vs. business, Stone said.

But at Wednesday’s announcement, IEDC officials named numerous businesses and organizations that regularly make transatlantic flights.

“There are a lot of companies that do a few flights and there are a few companies that do a whole lot of flights,” said IEDC Board Member John Thompson. Thompson named Cummins Inc., Rolls-Royce, Eli Lilly and Co., Roche Diagnostics Corp. and Bloomington-based Cook Medical as some companies that regularly travel between Indiana and Europe.

So is the airport still pursuing nonstop London service? It depends on the popularity of the Paris route, Stone said. If it’s successful, London could be a possibility.

Economic incentives

Delta has an extra financial incentive to see the new route succeed.

The Indiana Economic Development Corp. is offering Delta up to $5.5 million in conditional incentives over the next two years, based on how many passengers are on the flights.

IEDC spokeswoman Abby Gras said Delta can earn up to $3.5 million in incentives in the first year and up to $2 million in the second if the airline meets agreed-upon passenger goals. The more people take the flights, the more Delta can earn.

This incentive is structured differently from the one the IEDC offered when United Airlines established nonstop service from Indianapolis to San Francisco in 2014. In that case, the IEDC offered an annual backstop of up to $1.5 million to help support the flight financially if it failed to draw enough passengers. The financial support ended after a year.

United now operates two daily Indianapolis-to-San-Francisco flights that are supported by market demand, Stone said. Starting Sept. 23, when Alaska Airlines plans to launch its own daily nonstop flight between the two cities, Indianapolis will offer three nonstop flights per day to San Francisco.

The airport authority estimates the new air service could have a $50 million annual impact on Indiana’s economy.  

The money being offered to Delta comes from a new $15 million IEDC fund approved by the Indiana legislature this spring. The IEDC can use that money for a handful of approved uses, including attracting new air service.

The IEDC’s board of directors still must approve the Delta incentive. This is expected to happen at the board’s next quarterly board meeting, scheduled for Sept. 25 in Muncie.


 

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