On Oct. 22, 1994, a few days after a blowout community celebration that lasted nearly 10 hours, a 12-gate passenger terminal opened to great fanfare and high hopes just a few miles south of the old Colorado Springs Airport building near Powers Boulevard. - "The larger terminal will allow the airport to accommodate 2.5 million passengers a year, nearly 1 million more than the 1,524,800 passengers Colorado Springs served in 1993," read one enthusiastic account in The Gazette. - A year later, the $31 million terminal seemed well on its way to meeting its lofty potential. Ten airlines were operating more than 50 flights a day. Soon after, a new airline would form in Colorado Springs and grow to serve more than 30 cities. In 1996, 2.4 million people flew out of the Colorado Springs Airport.
This year, the airport will likely see 650,000 passengers depart from its gates.
What happened?
The airline industry changed dramatically in two decades - a trend that few backers of the new terminal could have foreseen in 1994 - and it's taken its toll. Seven of the airlines operating 20 years ago no longer exist because of mergers or bankruptcies - including Western Pacific Airlines, the startup that based its operations in the Springs and collapsed in bankruptcy 2½ years after its first flight.
Today, almost 20 years to the day since the terminal opened, just four airlines operate about two dozen flights a day, and another carrier operates four flights a week.
Airport and other city officials have been working diligently to generate more service and attract the many passengers who drive to Denver International Airport, but given the aviation landscape, it's no easy task.
Airlines in 2014 are more interested in generating profits than attracting passengers at any cost. They'll eliminate routes that lose money or are marginally profitable, and they're reluctant to add flights or expand into new cities, said Mike Boyd, an Evergreen-based aviation industry consultant. A task force appointment by Mayor Steve Bach hired Boyd's company to help it persuade airlines to offer more low-cost flights to more destinations out of Colorado Springs.
"Airlines don't want to expand, even when you can't find a seat on their aircraft," Boyd said. "They just want to make money. You can still get to the rest of the world from Colorado Springs with service to most major hubs, but it is hard to talk airlines into adding service anywhere."
A mid-1990s explosion in growth
Traffic at the airport exploded with the growth of Western Pacific in the mid-1990s, more than tripling within two years of the terminal's opening. There were more than 80 flights a day - nearly all of them on full-size aircraft such as Boeing 737s. Three new carriers joined WestPac in the Springs, and airlines already serving the city matched WestPac's bargain-basement fares while adding flights to new destinations.
But the good times didn't last. WestPac lost more than $90 million in the nearly three years it operated before leaving Colorado Springs for Denver and filing for U.S. Bankruptcy Court protection from its creditors a few months later.
Chris Thornton, chairman of the city's Airport Advisory Commission who also wrote a doctoral dissertation on Western Pacific, said the carrier failed because it offered too few flights to too many destinations, making it an unattractive option for business travelers.
"They had one flight a day to many destinations, so you couldn't fly to a meeting in the morning and return in the evening,"
Dan Gallagher, the airport's director, doubts that Colorado Springs will ever again be an airline hub. Airlines are shutting down or reducing service to hubs, not looking to build new ones.
"Colorado Springs doesn't have enough of a population base to support a hub," Gallagher said. "We are seeing hubs in Memphis, Cincinnati and Cleveland all going away as the airline industry consolidates. Hubs are going to larger cities that have a greater population and business base."
Passenger traffic levels flattened
Although airlines reduced flights and raised fares after Western Pacific's collapse, passenger numbers in the Springs had stabilized by the end of the 1990s, but only at about half of the peak levels reached in 1996.
Then came the Sept. 11, 2001, attacks, which accelerated a nationwide drop in business travel already underway because of a recession. To reduce losses, the industry focused more on using smaller jets which, in turn, hit smaller airports hard as airlines focused on their hubs.
Even though the local economy recovered, passenger traffic didn't, remaining flat until 2008.
The Great Recession that started in late 2007 set off another round of airline industry restructuring - but an unrelated development in Denver hammered the local airport even more.
Low-fare giant Southwest Airlines began service to Denver in early 2007, which would become one of its largest hubs and start a three-way fare war with Frontier and United Airlines.
Southern Colorado passengers flocked to Denver for the low fares, and passenger numbers in the Springs declined until Frontier Airlines began an experiment in 2012 to make the Springs a "focus city" by adding nonstop flights to four destinations. But the carrier halted the experiment in less than a year, and passenger numbers fell last year to the lowest level since 1991. In response, new airport management paid off debt and reduced operating expenses to keep its remaining airlines and attract new carriers.
Airport studies show that at least half of southern Colorado residents bypass the local airport and drive to DIA to catch flights to take advantage of what many passengers believe are lower fares and more nonstop flights.
But Gallagher says fares in the Springs aren't that much higher than Denver's. There are just fewer of them available.
"Denver has 30 million outbound seats a year and we have 800,000. We have similar pricing, but our low fares sell out more quickly," Gallagher said. "We have an underserved market of 1.6 million passengers and are getting only 600,000 of them at this airport."
Experimenting with new initiatives
Gallagher's cost-cutting moves have paid some dividends. Alaska Airlines started service to the Springs in November with a daily nonstop flight to Seattle, and Allegiant Air expanded in May with twice-a-week nonstop flights to a small airport in the Phoenix area.
The airport also has made special efforts in the past year to attract passengers by starting a rewards program for spending on parking, food and gifts; building a premier lounge for business travelers; providing free parking in November and December; and launching a discount ski pass program with Monarch Ski Area.
"We have cut our cost to the airlines by 50 percent in the past year, and now we are cutting the cost to consumers," Gallagher said. "We are hoping that if people don't have to pay for parking they will look at us first before going to Denver."
The airport also has expanded its marketing program to target travelers coming to the Springs from Houston, Seattle and Illinois.
The airport's traffic numbers in recent months reflect a turnaround, increasing from a year earlier during three of the past four months though year-to-date numbers through August remain down 7.4 percent from the same period in 2013.
Despite the challenges facing the airport, Gallagher sees a chance to build business because the cost-cutting moves make it less expensive for the airlines to use the terminal.
"This terminal represents a fantastic opportunity," he said. "We will have 75 percent of the debt paid off in two years and can handle triple the level of traffic we do today without spending another penny on gates, jet bridges or a baggage system."
COLORADO SPRINGS AIRPORT TIMELINE, 1991-2014
December 1990: Airport receives $25 million grant from Federal Aviation Administration to build the east runway, the first part of an airport expansion that would include a new 12-gate passenger terminal.
November 1991: Colorado Springs voters approve issuing $64 million in revenue bonds to pay for a new terminal and other improvements.
March 1993: Gerald R. Phipps Inc. begins construction on new terminal, designed by local architect Terry Van Sant.
July 1993: Ed Beauvais, founder of America West Airlines, begins raising money to start a new low-fare airline based at the Colorado Springs Airport.
Oct. 22, 1994: The new terminal opens on time and under budget. First flight leaves for Phoenix on America West Airlines.
April 28, 1995: First Western Pacific flight leaves for Oklahoma City, home of Edward L. Gaylord, a major investor in the airline and majority owner of The Broadmoor hotel.
December 1995: WestPac raises $48 million in public stock offering and grows rapidly.
November 1996: WestPac grows to offer flights to 30 cities, but losses hit $23.7 million in 1996. Airline's board ousts Beauvais as CEO and replaces him with a former TWA executive.
June 1997: WestPac moves hub to Denver amid merger talks with Frontier.
October 1997: Frontier merger collapses, WestPac seeks U.S. Bankruptcy Court protection from creditors.
January 1998: City agrees to acquire WestPac's satellite concourse for $115,000 and waiver of about $200,000 in debts owed to the airport.
February 1998: WestPac shuts down. Remaining carriers in the Springs raise fares, reduce service.
1999-2000: Passenger traffic stabilizes at about 1.2 million.
Sept. 11, 2001: The 9/11 attacks make Americans reluctant to travel for months. Airlines began cutting flights to many destinations. Passenger traffic in the Springs declines 13.4 percent the next year and never recovers.
2002-07: Several airlines switch many routes from full-size aircraft to regional jets operated by commuter airlines, including Utah-based SkyWest.
June 2007: SkyWest opens $20 million hangar on airport's west side to perform overnight maintenance on regional jets. Carrier now operates local flights for Alaska, Delta and United.
2008-12: Recession hits airlines hard; three airlines leave Springs, many cut flights and switch others to regional jets.
May 2012: Frontier begins nonstop flights from Springs to four destinations as part of experiment to make Colorado Springs a "focus city."
April 2013: Frontier leaves Springs after disappointing results from its experiment.
November 2013: Alaska Airlines expands to Springs with nonstop flight to Seattle.
Source: The Gazette archives
COLORADO SPRINGS AIRPORT, 1994 VS. 2004
Airlines serving Colorado Springs in 1994: American, America West (later merged with U.S. Airways, then American), Continental (later merged with United), Delta, Morris Air (acquired by Southwest), TWA (bought out of bankruptcy by American), United, Western Pacific (bankrupt)
Airlines serving Colorado Springs in 2014: Allegiant Air, Alaska, American, Delta and United
Passenger traffic in 1994: 787,876
Passenger traffic in 2014: 650,000*
Total long-term debt in 1994: $64 million
Total long-term debt in 2014: $20 million
* Forecast
Source: Colorado Springs Airport
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