Sunday, January 08, 2012

WASHINGTON: Yakima's new airline has gained reputation of leaving cities quickly if business doesn't take off

Company president says economic situation in Yakima will be more successful than other regional ventures

YAKIMA, Wash. — Conflicting information abounds when looking at the nearly four-year history of SeaPort Airlines.

The Portland-based airline, which will start service between Portland, Wenatchee and Yakima in March, has gained praise from customers for its on-time departures and arrivals and personalized service.

But after ending several routes in the Northwest in the past six months, it has gained a reputation as a come-and-go airline out for government subsidies and financial incentives.

Such perception may alarm local travelers who feel burned by the departure of Delta Air Lines in July 2008 after just 14 months of service. The business community raised more than $600,000 in incentives, including $445,000 in prepaid airline tickets and $150,000 for marketing the airline.

But Yakima Air Terminal manager Lee Remmel said the airport has not offered nor has SeaPort asked for any financial incentives.

Rather, Yakima is on the ground floor in the company's shift to serve untapped smaller markets, he said.

The airline "has the opportunity to get a lot bigger, either with a number of flights, or an aircraft expansion," Remmel said. "We would want to be first on this list."

Late last month, the airline announced online that it was ending flights between Portland and Seattle, its inaugural route, on Jan. 27.

With so many flights between the two cities, including from Seattle-based Alaska Airlines, it was tough for the airline to compete, said SeaPort Airlines president Rob McKinney.

"Seattle is probably not going to miss the five or six flights a day," he said. "But it's going to be a huge benefit for Yakima to add three flights a day."

Management from some of the cities that have lost SeaPort service in the last year advise caution.

"You have to go in with your eyes open," said John Wales, director of the Urban Development Department in Salem, Ore.,

Salem, like Yakima, hasn't had air service since Delta Air Lines ended service to Salt Lake City in 2008 after just 16 months.

But Delta service seemed much longer in comparison to that of SeaPort, which ended service between Salem and Portland in July, just three months after it launched. The airport hasn't had service since.

The city spent $10,000 to market the service, Wales said.

"The truth is we didn't fill the planes and we didn't get the usage on" the service, he said. "We certainly understand (its) business. We just would have liked to have some time to market or advertise it."

The airline spent much more time in the coastal Oregon cities of Newport and Astoria -- more than two years -- but service between the two cities and Portland was subsidized by more than $4 million in state and federal grants.

SeaPort ended service in Astoria last spring, shortly after the grants ran out. Unsubsidized service continued for several more months in Newport until SeaPort ended service in July.

Officials from both cities admit that it was a challenge to fill the planes, especially with both cities relatively close to Portland.

But city and business officials in Newport made a bona fide effort to help the service succeed after the subsidies ended, said Newport Mayor Mark McConnell.

The city worked with the airline on a voucher plan, local hotels offered free lodging for pilots and the airport also gave SeaPort a break on landing and fuel costs.

Ultimately, McConnell said, SeaPort didn't effectively promote the service with marketing funds from the subsidy. The airline put too much focus on corporate business travelers from elsewhere and too little on potential business from local residents looking to visit Portland for family or leisure.

"It was a constant battle to get them to refocus their marketing on our area," he said.

Last month, SeaPort ended all service from Boise, Idaho, including flights to and from Pendleton, Ore., and Idaho Falls, Idaho, just six months after the airline began offering the flights.

Len Nelson, aviation manager for the Idaho Falls Regional Airport, said it was a challenge to fill the seats, but felt the city's efforts to promote the service were bearing fruit.

"We're just disappointed they didn't look far enough in advance to make a longer commitment to us," he said.

McKinney said current perception of the airline is unfair.

Different circumstances led to the very short stints in Salem, Boise and Idaho Falls and isn't indicative of how other markets have done or will do, he said.

SeaPort flights between Pendleton and Portland, for one, have been so successful, the airline offers more flights beyond what is funded by government subsidies.

The Salem flights, in contrast, were added as an attempt to boost business for the struggling Newport route, he said -- Newport flights flew to Salem before moving on to Portland. So it made sense to cancel the Newport and Salem flights at the same time.

"In the end, we ended up losing substantial money on the (Newport) route," he said.

And the $10,000 in marketing funds from Salem were never given directly to the airline, but were part of a broader campaign to fly out of Salem, McKinney said.

Finally, with increased focus on using the Cessna Caravan aircraft, it wasn't ideal to keep flying in Idaho with its higher-altitude, mountainous flight routes, McKinney said.

He believes the reputation will disappear with time.

"Once we have our second and third anniversary in Yakima, nobody is going to remember those stories," he said.

Few can predict whether SeaPort will be successful in Yakima or in the other markets SeaPort is launching new service.

But most agree that those local officials cannot slack on efforts to get local travelers to use the service.

"The community has to step up and use it," said Wales, the Urban Development department director from Salem. "They have to want it."

Remmel said the airport is teaming up with several organizations, such as the Greater Yakima Chamber of Commerce and New Vision.

"It's going to be a group effort to pull this off," he said.

But there are still other factors beyond promotion that will determine if the airline will succeed in Yakima, said Mike Boggs, a retired air service consultant who worked with the Yakima airport to secure flights from Delta Air Lines.

There's no question there is demand for air service between Yakima and Portland, Boggs said. The question is if fares will be low enough for local travelers to get out of their cars and fly.

Through Feb. 29, the airline is offering an introductory fare of $69 each way between Yakima and Portland for travel through March 31. Following the promotion, fares between Portland and Yakima will range from $89 to $169.

Flights between Yakima and Wenatchee will cost $29 each way.

And there's the matter of connectivity, he said. SeaPort passengers who fly into Portland fly in the airline's private terminal and are taken to the main terminal, where they would have to check-in again for a connecting flight.

In a previous interview with the Yakima Herald-Republic, McKinney said the airline is working on a seamless ticketing system with other airlines.

Boggs said having a system will help make the route successful.

"But the challenges for Yakima are the same challenges for any community served by a smaller airline," he said. "You have to have the connectivity and you have to be able to price it right."


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