Wednesday, March 14, 2012

Rental car agreements to be extended

Airport denies Enterprise request for in-airport service

Express Staff Writer

Peter and Karen Scheurmier, operators of the Avis Budget rental car group at Friedman Memorial AIrport, sort through reservations at their kiosk inside the airport terminal. Hertz also has a kiosk in the airport, and Enterprise has been fighting to return to the terminal. Photo by David N. Seelig

The Friedman Memorial Airport Authority denied a third request by Enterprise Rental Cars to resume in-terminal car rentals on Tuesday, citing the poor economy and Enterprise's early termination of its last on-airport service agreement.

Enterprise had a facility in the terminal until 2009, when it opted out of an extension its agreement. Once it exited that agreement, the company moved its Hailey location to a building on Aviation Drive just west of the airport.

According to airport Manager Rick Baird, allowing Enterprise to re-enter the terminal would require opening the bidding process for rental car services—a process that could result in a reduction of the minimum annual guarantees that the companies pay the airport, which were set in 2006.

Baird said enplanements have dropped 27 percent since 2006, and the number of available seats has dropped from 130,000 in 2010 to just under 81,000 in 2011. Fewer incoming passengers means less business, said one rental care vendor.

"Less people getting of those planes is fewer customers for us," said Hertz representative Steven Jones. "It's scary, from our standpoint."

What worries the existing vendors is that adding Enterprise back to the mix would increase the competition for a limited customer base.

"The pie is not getting bigger, it's getting smaller," said Avis Rent-a-Car Manager Peter Scheurmier. "Increasing the competition will be ultimately detrimental to the airport."

Jones said he supports a bidding process, but does not think that adding Enterprise to the number of rental care vendors already in the terminal would be beneficial.

"Years ago, when it was a triple-brand environment, we wondered what that would do to the industry," he said. "Now, we're faced with the possibility of a triple brand in a small market like this. There are a lot of decisions to be made on how that would function."


However, Enterprise representative Scott Reese said it was only fair to open the bidding process for in-terminal rental car services. The agreement was originally set in 2006 and has been extended three times since then, which Reese said should be considered.

"It's extremely unusual to have on-airport agreements extended this long, especially when there are other interest companies seeking for an opportunity to operate on-airport," he said.

But, Baird argued, Enterprise had an opportunity to operate in the terminal and rejected it. He said Enterprise made the decision not to expand its contract in 2009, and knew moving off-airport would be the result.

"To blame the fact that they can't service their customers on you, as a board, is inappropriate," Baird told Airport Authority members. "Enterprise has had the ability to service their customers well at the airport by being an off-airport rental car agreement participant, as they are throughout the country."

Baird added that Enterprise not only refused to accept the terms of the initial contract extension, but refused a counteroffer and then left its on-airport location.

Authority member Susan McBryant said she agreed that the authority did not "owe" Enterprise a bidding process.

"The airport did not create this problem," she said. "It's a tough-luck kind of situation. We were not the ones that left an agreement before it was completed."

Reese later clarified that Enterprise did not, in fact, terminate a contract early, but simply opted out of a contract extension.

Authority member Ron Fairfax, a Hailey dentist and private pilot, said he believed a bidding process should come sooner rather than later, but that perhaps next year would be a better time.

"I think that we are due for a bid process, but I don't think that right now is the right time logistically," he said. "Things are going to change and we will hopefully, in a year, be able to look forward to maybe more reliable service, better service, maybe the economy's better. Maybe we would get better bids in a year."

Katherine Wutz:

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