The skies are limited at Yakima airport

YAKIMA, Wash. -- Last month, Horizon Air officials visited Yakima to promote its service to and from Seattle in hopes of boosting passenger levels.

Local and airline officials generally agree the visit was a positive one.

"I thought the meetings were very honest and very productive," said Yakima Air Terminal manager Mike Redmond.

The visit, however, also illustrated the struggle small communities such as Yakima have in gaining more air service while airlines cut flights and make other operating cuts to stay viable during the economic recession.

The local business community believes that it needs more service, whether it's through more flights from Horizon or the recruitment of another airline to the area.

"What they were saying (during the Horizon meeting) is that 'We support you, Horizon, but you've got a huge market you're not tapping," said Mike Morrisette, CEO and president of the Greater Yakima Chamber of Commerce and a member of the Yakima Air Terminal board.

Horizon Air officials point out they have made changes in the past year to make service more convenient to Yakima travelers, such as moving the last flight from Seattle back a few hours, to allow passengers on later flights to make that final connection.

Doing so actually added $354,000 to Horizon's annual costs because the later flight required an extra crew for the first flight the next day. With an earlier flight, the same crew could be used for the next day's early morning flight.

Dan Russo, Horizon Air's vice president of marketing and communications, emphasizes the importance of promoting the service and improving boardings. The bottom line is how many passengers are filling those planes.

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And at the moment, the numbers don't look so good. Passenger loads for Horizon flights to and from the Yakima airport have dropped from 74 percent in January to 47 percent in September.

In general, the airline needs plane loads to be in the 60 percent range to be financially viable, but that can vary greatly depending on operating and passenger ticket costs, Russo said.

With business travel declining, it's likely that planes need to be more full as passengers are likely paying lower fares, he said.

During the meeting, Horizon talked about no-cost ways to promote existing service, such as mentioning the service in e-mails or linking to the airline on company Web sites.

"The situation in Yakima is that we've been there for 25 years and sometimes things like that can be taken for granted," Russo said.

Local officials say people are more likely to fly out of Yakima if they have more choices for destinations.

They point to when Delta Air Lines began offering service between Yakima and Salt Lake City in June 2007. During the 14 months the Atlanta-based carrier offered service, flight loads for flights departing from Yakima didn't drop below 63 percent and were as high as 88 percent.

And despite Delta's presence, Horizon Air's loads showed a similar range.

Overall passenger counts were also higher when Delta was providing service from Yakima. The airport had 54,825 passengers departing from the Yakima airport during the first nine months of 2008.

In the first nine months of this year, the number of departing passengers totaled 44,751, an 18.4 percent drop.

"What that tells you is that there (was) an underserved market," said Redmond. "When there was an alternate service, the people came."

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Soon after Delta began offering service here, the airline industry was faced with two back-to-back events.

In the summer of 2008, oil prices spiraled dramatically to upwards of $160 per barrel. With airlines unwilling to increase fares in a price-sensitive market, airlines began cutting services in markets across the country.

Delta's service to and from Yakima was one of those cuts.

Once oil prices settled down, airlines had to deal with the economic recession, which has led to a dramatic drop in passenger traffic.

The number of scheduled domestic and international passengers on U.S. airlines dropped 3.4 percent year-over-year in July 2009 to 68.1 million, according to the U.S. Department of Transportation's Bureau of Transportation Statistics.

It was the 16th consecutive month that U.S. airlines saw a decrease in passengers from the prior year.

"The robust economy is an airline's best friend. People pay more for tickets, and they fly more," said Darryl Jenkins, a consultant who runs The Airline Zone, an airline economics Web site. "In a recession, they have less money in their pocket, they fly less often, and they're not willing to pay very much for their tickets."

It has forced airlines to be more frugal when deciding whether to drop, keep or expand existing service or start new service.

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Redmond points to studies showing that about half of the passengers within the Yakima area were not flying from the Yakima airport. They are instead opting to fly from Seattle, Portland or Pasco. Redmond and other business officials often use this data to argue that there's an unfilled local market.

But since Yakima is located within driving distance of those airports, some airlines may believe that they are still capturing Yakima passengers and feel less need for bringing new service to the immediate area, Jenkins said.

The Tri-Cities Airport in Pasco is often looked at with envy by local business and airport leaders, as it is one of the few smaller airports in the U.S. that got new air service this year.

This month, the low-cost airline Allegiant Air will begin offering flights to the Phoenix area. And this past summer, United Express began service from the Tri-Cities to San Francisco.

Economic development officials in the Tri-Cities credit the airport's growth to a still-robust economy and a large corporate travel base that includes everyone from Hanford contractors to Lamb Weston officials.

"It takes a good strong business case and I think, frankly, a little bit of luck as far as equipment utilization," said Carl Adrian, president and CEO of the Tri-City Development Council, or TRIDEC.

But the Pasco airport has not been immune to airline cuts.

More than a year ago, the airport lost service to Portland from Horizon Air. More recently, it lost service by Northwest Airlines, which is operated by Delta, to Minneapolis just months after Northwest began offering the service.

That came as a surprise to local officials there, who say passenger loads were in the 90 percent range.

Adrian, of TRIDEC, believes that Delta Air Lines, which had service from the Tri-Cities to Salt Lake City, was in direct competition with the Northwest flight.

"Why would they compete against themselves?" he said.

So while the goal is simple -- showing airlines that they can be financially viable by providing local air service, constantly changing circumstances for the airline industry has created a moving target for airports.

"What makes sense a year ago, doesn't make sense now," said Jim Morasch, director of airports for the Tri-Cities Airport in Pasco.

Yakima airport officials are hoping to find experts who can aim at that moving target -- they're currently taking proposals from consultants who can advise the airport on how to provide the right information that is attractive to airlines.

But given the sluggish economy, airlines may not be ready to talk.

"Airlines are going to be reticent to put new capacity in the market after the disasters of the last two or three years," Jenkins said. "It's not impossible, but it's going to be tough for you to get service."

Redmond knows the airport is facing a long process.

"We have to go into this recognizing that it's going to be very daunting and very challenging," he said. "But I do firmly believe there is a great opportunity for an airline to provide service to other cities and make a reasonable revenue and get more customers into its network."

* Mai Hoang can be reached at 577-7685 or mhoang@yakimaherald.com.

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