The Sioux Falls Regional Airport proposed to allow rental car companies at the airport to increase their airport fees from 9 percent to 10 percent, after the airport experienced a 10-percent drop in the number of air travelers last year, which contributed to a 23-percent reduction in revenue for the car rental companies, according to the Argus Leader.
Car rental companies at the airport have already experienced a 16.5 percent drop in revenue this year. Rental car agencies at the airport have asked the airport for help after the fall in revenue.
In addition to the fee increase, Dan Letellier, executive director of the airport, also offered to reduce by 3.6 percent the minimum payment the companies pay to operate in the airport. Another idea involves renegotiating the four-year car rental contracts this summer instead of waiting until they are up for bid in December.
Alamo/National, Avis, Enterprise and Hertz operate counters in the Sioux Falls Regional Airport baggage claim area.
Doug Kooken, regional manager for Enterprise Rent-A-Car, said that without help, rental companies might have to compensate by maintaining older fleets and cars with more miles on them. If allowed to collect 10 percent on rental revenues, car company customers would see about a 90-cent increase in a typical rental cost, he said.
One Hertz manager said that if the percentage collected is raised for this year, it should be rolled back to 9 percent once the economic situation improves. Raising prices is not a smart move in a market like Sioux Falls, where rental car operators are worried about “leakage,” or a situation in which area customers drive to other airports to take advantage of cheaper flights there.