Car Rental Firms Moving With Push By Airport

All eight car rental companies serving Memphis International Airport -- Alamo, Avis, Budget, Dollar, Enterprise, Hertz, National and Thrifty -- will move to the new center. The authority likely will lease the nearly 28-acre tract vacated by the rental car companies to FedEx Corp., though final usage of the land has not yet been determined.

"FedEx appears to be a likely company to lease the land, but nothing has been finalized," says Larry Cox, president and CEO of MSCAA.

FedEx spokesman Jim McCluskey says the company does not comment on contracts that have not been signed.

Plans for the airport's ground transportation center were first designed in 2001, but dramatic decreases in passenger traffic following 9/11 closed the book on the project. Now the airport is moving ahead with the plan and officials say the center will provide better customer service for passengers, decrease emissions, reduce bus traffic at the airport terminal, and cut in half the travel time from baggage claim to the rental car lots.

The new facility will be built on a vacant lot owned by the authority, and will be one mile closer to the passenger terminal than the current location of the rental car companies off Democrat also owned by MSCAA. Passengers will be transported to the center by bus.

"This facility will help leave a positive impression of Memphis," Cox says. "Many airports have such facilities and even more are planned, so it is necessary for Memphis International to keep up with passenger expectations."

To help finance the $48 million facility, all rental car firms serving the airport started on April 1 to charge customers an additional $4 per day of rental, as requested by the airport authority. Some companies are concerned about the fee that's an addition to an already heavy tax burden on car renters. The majority of customers are from out of town, but both local and out-of-town customers pay the fees. According to a recent Travelocity study, car renters pay nearly 27% in taxes at Memphis airport locations, close to the national average of 28% but the highest in the state.

"The rental car companies do not like the idea of charging the $4 per day to local customers who rent from the airport location," says Bill Schultz, general manager at the airport's Budget Rent a Car. "We believe that our local customers will shift their rentals to off-airport rental locations, further declining the revenue needed to support the facility move."

In 2006, rental car companies paid the airport $6.6 million in fees, according to MSCAA's annual report.

Schultz says there's an ongoing communication with airport officials and parties will meet next month to discuss the new fee.

"It is the intent of the rental car companies to request that the airport do a financial feasibility study to see if an airport the size of Memphis can support a consolidated facility without the cost making it prohibitive," he says.

In response, Cox says an internal study was conducted to determine the current fee, and that the airport will be conducting further studies to determine if the fee has any negative impact on the volume of auto rentals at the airport by local renters.

"At airports around the country and around the world, consolidated car rental facilities that benefit passengers are paid for by fees like (the one) at Memphis International Airport," he says. "This fee is the only way that the new ground transportation terminal is funded. Because this fee has a single purpose, if the revenues are sufficient for the costs of the facility, it can be reduced or changed."

Cox emphasizes that the $4 fee is just one element in the overall price, which also includes an arena fee, which supports FedExForum, and insurance costs.

In addition to the $4 fee, customers pay 9.25% in state sales tax, 11.1% concession fee and 2% county tax, says Dominic D'Amico, general manager for Dollar Rent a Car's airport location.

Cox says the airport will operate one system of shuttle buses for all companies, which will reduce traffic by 75%.

"This will save thousands of gallons of gasoline and reduce emissions," Cox says.

Memphis-Shelby County Airport Authority
President & CEO: Larry Cox
Address: 2491 Winchester
Web site: www.memphisairport.org


Car rental firms moving with push by airport (Continued) All eight car rental companies serving Memphis International Airport -- Alamo, Avis, Budget, Dollar, Enterprise, Hertz, National and Thrifty -- will move to the new center. The authority likely will lease the nearly 28-acre tract vacated by the rental car companies to FedEx Corp., though final usage of the land has not yet been determined. "FedEx appears to be a likely company to lease the land, but nothing has been finalized," says Larry Cox, president and CEO of MSCAA. FedEx spokesman Jim McCluskey says the company does not comment on contracts that have not been signed. Plans for the airport's ground transportation center were first designed in 2001, but dramatic decreases in passenger traffic following 9/11 closed the book on the project. Now the airport is moving ahead with the plan and officials say the center will provide better customer service for passengers, decrease emissions, reduce bus traffic at the airport terminal, and cut in half the travel time from baggage claim to the rental car lots. The new facility will be built on a vacant lot owned by the authority, and will be one mile closer to the passenger terminal than the current location of the rental car companies off Democrat also owned by MSCAA. Passengers will be transported to the center by bus. "This facility will help leave a positive impression of Memphis," Cox says. "Many airports have such facilities and even more are planned, so it is necessary for Memphis International to keep up with passenger expectations." To help finance the $48 million facility, all rental car firms serving the airport started on April 1 to charge customers an additional $4 per day of rental, as requested by the airport authority. Some companies are concerned about the fee that's an addition to an already heavy tax burden on car renters. The majority of customers are from out of town, but both local and out-of-town customers pay the fees. According to a recent Travelocity study, car renters pay nearly 27% in taxes at Memphis airport locations, close to the national average of 28% but the highest in the state. "The rental car companies do not like the idea of charging the $4 per day to local customers who rent from the airport location," says Bill Schultz, general manager at the airport's Budget Rent a Car. "We believe that our local customers will shift their rentals to off-airport rental locations, further declining the revenue needed to support the facility move." In 2006, rental car companies paid the airport $6.6 million in fees, according to MSCAA's annual report. Schultz says there's an ongoing communication with airport officials and parties will meet next month to discuss the new fee. "It is the intent of the rental car companies to request that the airport do a financial feasibility study to see if an airport the size of Memphis can support a consolidated facility without the cost making it prohibitive," he says. In response, Cox says an internal study was conducted to determine the current fee, and that the airport will be conducting further studies to determine if the fee has any negative impact on the volume of auto rentals at the airport by local renters. "At airports around the country and around the world, consolidated car rental facilities that benefit passengers are paid for by fees like (the one) at Memphis International Airport," he says. "This fee is the only way that the new ground transportation terminal is funded. Because this fee has a single purpose, if the revenues are sufficient for the costs of the facility, it can be reduced or changed." Cox emphasizes that the $4 fee is just one element in the overall price, which also includes an arena fee, which supports FedExForum, and insurance costs. In addition to the $4 fee, customers pay 9.25% in state sales tax, 11.1% concession fee and 2% county tax, says Dominic D'Amico, general manager for Dollar Rent a Car's airport location. Cox says the airport will operate one system of shuttle buses for all companies, which will reduce traffic by 75%. "This will save thousands of gallons of gasoline and reduce emissions," Cox says. Memphis-Shelby County Airport Authority President & CEO: Larry Cox Address: 2491 Winchester Web site: www.memphisairport.org