To hear Luke Schmidt tell it, members of the Louisville Regional Airlift Development (LRAD) were the bug in the ear of American Airlines that wouldn’t go away, the pebble in the shoe or a myriad of other aphorisms denoting the nonprofit coalition’s persistence in reminding the airline that Louisville wanted and was worthy of a nonstop flight to Los Angeles.
The conversations between airport leaders, American Airlines and LRAD, a coalition of businesspeople who want to increase air service in Louisville, started with a meeting in the early months of this year with the company’s route expansion executives.
“There’s no question this is a very, very competitive arena, so what we had to do was put together a pitch that would really explain to them and illustrate to them what the market looks like and what we thought the market would do if we had a nonstop flight, and that was followed all spring and all summer with a lot of emails,” said Schmidt, a consultant for LRAD. “Any kind of market uptick that occurred … we made sure they found out about it.
“For example, when the new soccer stadium groundbreaking took place. We let them know about the effort to bring an NBA team, business expansions that occurred, the Omni Hotel, the convention center reopening, all those types of things,” he continued. “I mean, we take it for granted on a day-to-day basis, but if you’re sitting in Fort Worth, not up here, and not seeing the local news reporting this stuff — if we don’t tell them, nobody else will — so that’s what we did.”
Schmidt said he met briefly with an American Airlines representative in Cleveland in the late summer, but the ball truly got rolling about four weeks ago with the applicable parties firming up plans for the nonstop route, which was announced Thursday.
“We’ve got a lot of work to get to this point, but it’s been great, a real team effort,” he said. “Everything that everybody said up there about a lot of groups working together, absolutely true.”
As part of the bait, LRAD has raised “several million,” Schmidt said, for a minimum revenue guarantee fund that helps reduce the risk airlines take when starting a new route by offering to cover any deficit in expected income from monthly ticket sales. While he declined to disclose details of LRAD’s agreement with American Airlines, he said it would last for two years and leaves the coalition with some money in the fund to go after another nonstop route. Its top picks are Boston, San Francisco and Seattle.
Schmidt noted that LRAD is continuing to raise money for the minimum revenue guarantee fund. In addition to private donations, the Kentucky Cabinet for Economic Development pledged $1.33 million and Louisville-Jefferson County Metro Government and Louisville Tourism dedicated $200,000 each to the fund.
When asked if he believes LRAD will need to tap into the fund to cover any gaps in expected income for the Los Angeles flight, Schmidt said he was unsure. If the flight meets or exceeds income expectations in a given month, then LRAD doesn’t pay American Airlines any money.
“You never know until the route actually starts,” he said. “It certainly is possible, but we’ve got about five or six months to market the route.”
Ticket sales start Nov. 5 for flights on April 2 and after.
American Airlines “has every expectation that this will be a successful route,” Schmidt said. “I will promise you these airlines rarely start a new route unless they feel very, very comfortable that it’s going to be a successful route. The last thing they want to do is put a route in, a brand new route in and then find that it isn’t.”
When looking for an airline to host the nonstop route to Los Angeles, he said LRAD members were looking for a traditional large carrier.
“We were looking for an airline to serve this route that really would cater to the business community, because they’re the primary travelers in all this, and the ultra-low-cost carriers, while they fill an important part of the market for the leisure traveler, those flights generally are two or three times a week. The tickets are not interchangeable, whereas this flight, the tickets are interchangeable with other airlines and its everyday service — seven days out, seven days back — which is what we really wanted,” Schmidt said. “This met all our criteria.”