Wednesday, January 04, 2012

SeaPort Airlines raises concerns in some communities, hopes in others

Benjamin Brink/The Oregonian
Connie Nicholson, a pilot with SeaPort Airlines, checks the prop on her craft after a flight from Astoria in this 2010 photo. SeaPort announced a change in its operating strategy recently, which includes dropping flights between Portland and Seattle.
NEWPORT – On Jan. 15, SeaPort Airlines will start flying out of North Bend. After that, it will add service to Jackson, and Nashville, Tenn. And in March, the airline will begin flights out of Yakima and Wenatchee, Wash.

The question is: How long will it last?

In less than three years, SeaPort has added and abandoned service in five different communities, most recently announcing last week it would abandon its Portland-to-Seattle route and cease operations at Seattle's Boeing Field.

That has some people questioning SeaPort's motives. Are they sincere about their commitment to small town air service? Or are they in it for the subsidies, the incentives and free marketing?

A SeaPort official says the airline is trying to make things work for everyone -- but it can't fly where it can't make a profit.

Still, the Portland-based airline has lost some fans.

"Their track record is not very good at this point," said Newport Mayor Mark McConnell. "If I was a city of people trying to make a decision to help them out, absolutely I'd be leery about giving them a whole of money up front." .

SeaPort started service between Portland and Seattle in the summer of 2008, and the following spring, subsidized by $4.5 million in state and federal grants, began service to Newport and Astoria. It left Astoria about the same time the subsidies ran out in March 2011, then added a stop in Salem in late April. The airline left Salem after barely three months, giving less than a week's notice to the city that spent $10,000 marketing it.

"I was shocked, upset, angry," said Tim Hay, chairman of Salem Airport Advisory Commission. "Normally, they give 60-90 days notice. We were given five days notice. That doesn't seem right."

The airline also stopped service in Newport in July 2011, ending two years of often contentious communications with the city for failing to honor stipulations in the contract.

Tim Sieber,  SeaPort vice-president of strategy and corporate development said the airline tried to make it work in the coastal towns and Salem, but there were just not enough passengers to make it profitable.

"We tried to use more economical planes to lower costs," said Sieber. "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."

But it was a different story in Idaho Falls, where airport aviation director Len Nelson says business was good and getting better. SeaPort began flying Idaho Falls to Boise in July 2011, but gave notice they were leaving less than six months later.

"We were really, really disappointed to see them leave," said Nelson. "We were just starting to fill the airplanes up. Out of nine seats, we were filling it a lot of times, and averaging five – six passengers a flight."

The problem with the Idaho Falls/Boise route had to do with the long distance – 200 miles – and the airline's plans to switch from the Pilatus PC 12 turboprop to the more economical, but slower Cessna Caravan, Sieber said. The flight in the PC 12 takes about an hour, but in the Cessna, it's closer to 1  1/2 hours.

"There were some lessons learned in Boise/Idaho Falls," said Sieber. "There is a direct highway link. Traffic wise it was good, but there was a tipping point where people were willing to fly in an airplane and then as you edge up the fare, people say, no, I'm going to drive."

The recent lessons learned have inspired SeaPort to come up with a new profile for the airports it wants to service, Sieber said.

In the future, it will look to develop routes in rural towns that are not linked to bigger cities by interstate highways and they'll aim to keep to routes less than 200 miles. They are also looking for airports where other airlines are already flying.

In North Bend, that's Sky West. The airline will end its daily flights to and from Portland next month, but will continue flying from North Bend to San Francisco. Airport executive director Therese Cook believes SeaPort has a better chance at success with the North Bend/Portland route than Sky West because it is flying smaller planes, but with more frequent flights – three a day.

The airport isn't offering any subsidies, but it 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 will also market the airline.

"We did the math, basically the revenue exceeds the waivers," said Cook. "No matter the history of Seaport, I have to look at a whole new scenario. We are a different airport. I honestly believe Seaport is going to be a really good fit."

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