Saturday, January 7, 2012

Airline’s departure irks towns: SeaPort has decided to quit service to Newport and Salem, and also end Seattle-to-Portland flights

NEWPORT — The decision by a Portland-based regional airline to stop service to several Northwest towns — after it had received economic incentives to serve them — has left some community leaders unhappy.

But SeaPort Airlines says it can’t fly if it can’t make a profit, and it’s changing its business strategy. In the last year, SeaPort has added and abandoned service in five different places. Last week it said it would drop its Portland-to-Seattle flights and cease operations at Seattle’s Boeing Field.

SeaPort started service between Portland and Seattle in 2008. The following spring, subsidized by $4.5 million in state and federal grants, it began service to Newport and Astoria.

It left Astoria about the same time the subsidies ran out, in March. It left Newport in July.

It added a stop in Salem in late April and left after three months, giving less than a week’s notice to the Oregon capital city, which spent $10,000 marketing the service.

Tim Sieber, a SeaPort vice president, said there were not enough passengers.

“We tried to use more economical planes to lower costs,” he said. “We stayed in Newport after the subsidy, and tried the stop in Salem. That didn’t even pay to cover the cost of wear and tear on the brakes to be quite blunt about it.”

The airline now wants to develop routes in rural towns not linked to bigger cities by interstate highways, Sieber said, with routes of less than 200 miles.

The company plans new service in North Bend on Oregon’s south coast, Yakima and Wenatchee in central Washington, and Jackson and Nashville in Tennessee. The company also flies in Alaska, Arkansas, Kansas, Missouri and Texas.

Rural routes give SeaPort a chance to expand without heavy competition, Sieber said. The federal government subsidizes many of SeaPort’s rural routes through its Essential Air Service program. Sieber said the payments, with $9.8 million expected this year, cover 20 percent to 60 percent of operating costs.

In North Bend, the airport is waiving landing and counter space fees for the first six months, providing personnel on the tarmac and at the customer service counter for the first four months, and also marketing the airline.

“We did the math,” executive director Therese Cook said. “Basically, the revenue exceeds the waivers. No matter the history of SeaPort, I have to look at a whole new scenario. I honestly believe SeaPort is going to be a really good fit.”

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