Turbulent ride
Tri-county airports are reporting hefty declines in air traffic this year, a significant drop in business that managers are blaming on the newly-named recession.
Year-to-date declines in passengers range from 30 percent to roughly 6 percent thanks to higher fuel costs, flight cutbacks and fewer business travelers.
At the Santa Barbara Municipal Airport, the region’s largest, officials are hoping that cooperative credit markets will allow them to finance a $63 million terminal project in early 2009.
“Christmas will probably be busier than Thanksgiving but I don’t think we’ll notice a big difference. Everyone is worried,” said Oxnard Airport manager Jorge Rubio.
The Oxnard Airport served 21,473 passengers in 2007, but only 14,958 so far in 2008 – a 30 percent plunge over a single year.
San Luis Obispo
The San Luis Obispo County Regional Airport is experiencing a similar decline, “as most airports our size have experienced,” said SLO Airport Manager Richard Howell. “For the year to date we are down about 11 percent.”
Howell said the airport set a record of 187,000 passengers in 2007, but has fallen back to its average of approximately 160,000 passengers after it lost carriers American and Delta.
Total passenger counts at the SLO Airport have increased at an average of 2.7 percent annually since 1995. Through August of this year, the airport passenger count showed a decrease of 7 percent over the same period in 2007.
Howell said while final Thanksgiving figures aren’t in, he expects it to be “on par” with past years. “As an airport, we probably experienced something of a decline because we have fewer seats coming into the market with the air carrier cutbacks, but the flights that flew had good loads. Thanksgiving is usually busier for us than Christmas, but we really couldn’t predict this year.”
Santa Barbara
Santa Barbara Airport Director Karen Ramsdell said that in October, the airlines provided 44,846 seats, 13 percent lower than the same month last year. She attributes the decrease to a reduction in flights to Los Angeles, San Francisco and Phoenix.
Santa Barbara Airport Communications Director Terri Gibson said that although she does not yet have the passenger count for November, the holiday season “has always been the busiest travel time of the year and we expect that to be true this year as well.”
As the National Bureau of Economic Research officially proclaimed the country in recession Dec. 1, airport staffers say it leaves future plans up in the air.
“It’s going to be a difficult time for the industry way into next year,” Howell said. “Congress has held up funding for airport capital projects for the second year and we probably will not get that part resolved until sometime in the spring. As long as the economy flounders, I suspect the sometime-traveler will be reluctant to take any trips, causing further problems for the airlines.”
Yearly passenger totals at the Santa Barbara Airport decreased by approximately 37,000 in 2007 compared to the prior year, something Gibson attributes to recent economic conditions and ongoing airport safety projects. With airlines cutting flight routes because of decreased demand, year-to-date traffic through October has decreased by 5.9 percent compared to last year.
Cost reductions
Airlines have struggled since the Sept. 11 attacks but have been particularly pinched in the past two years because of fuel prices and other economic factors.
Gibson estimated that in 2008, fuel comprised about 40 percent of airline costs, compared to approximately 10 percent a decade ago. In reaction to the high fuel costs, airlines have increased fares, grounded aircraft, reduced their labor forces and “unbundled” services by charging passengers for food, checked baggage, priority seating, blankets and other perks.
“Two factors can offset the impact on passenger demand,” Gibson said. “One, if the airport has a large share of business travelers; and two, if the community has a significant number of passengers that make connections, since long distance travel traditionally generates higher revenue.”
She added that 66 percent of people at the Santa Barbara Airport were business travelers and 58 percent of passengers departing from the airport intended to catch connecting flights.
In an effort to meet business travelers’ requests, Santa Barbara Airport gained nonstop service to Sacramento via Horizon Air, which flies the route twice a day with 70-passenger regional jets.
“It is unusual in uncertain economic times for airlines to begin new service, so we feel fortunate that Horizon took that risk at Santa Barbara Airport,” Ramsdell said.
Four daily flights between San Luis Obispo and Los Angeles by American Eagle ended in about a month ago, while one daily flight to Salt Lake City by Delta Connection stopped Sept. 1 due to increased fuel costs.
This reduction in flights will decrease the number of options for flyers and also reduce the county’s ability to generate midweek conference and corporate business. It will also have a negative effect on local employment as between 70 and 87 people will lose their jobs.
Construction continues
Ramsdell said construction on the airline terminal project at the Santa Barbara Airport is about halfway through phase one, which includes additional improvements that will begin in early 2009. The construction will set the stage for expansion of the new $63 million terminal.
Phase two involves temporary improvements and soil preparation. The terminal loop road will be reconfigured so the construction site for the new building can be fenced off. The soil for the new building pad will be conditioned during phase two and the short-term parking lot will be relocated to the westerly portion of the long-term parking lot.
The actual construction for the new terminal building won’t take place until phase three. Bids have been received, but are being held until the terminal project financing is completed. The entire project is estimated to be completed in late 2010.
Improvements are also under way in San Luis Obispo.
“We are in the continuing process of proposing a new terminal and parking complex to County management,” Howell said. “Our existing building was too small five to seven years ago, so the plan will probably move forward.”
SLO Airport air traffic controller John Malizia said the new terminal had originally been envisioned as a two-story building, but plans have been changed since SLO Airport lost some of its airlines.
Rubio said Oxnard Airport has no renovation plans at this time.
“We are always looking for airlines that can provide more service, but until that happens there are no development plans,” he said. Air service to Oxnard Airport is provided by Skywest/United Express.
The Santa Barbara Municipal Airport serves the area with six airlines and 40 daily departures to major cities.
“Currently, Santa Barbara Airport has 37 daily departures with more than 1,600 outbound seats to 10 major airports making connection possibilities to more than 300 one-stop destinations worldwide,” Gibson said.
Santa Barbara Airport is served by Allegiant Air, American Eagle, Delta Connection, Horizon Air, US Airways Express and United Express.
Attempts to contact the Santa Maria Public Airport District were unsuccessful.
