By Pacific Coast Business Times Staff Monday, March 15th, 2010

South Coast technology companies are urging a regional airline to reconsider its move to cancel the only direct route between Santa Barbara and the Silicon Valley.

In late February, SkyWest, the regional airline that operates United Airlines’ Santa Barbara service, said it will quit flying to San Jose in June. Santa Barbara tech firms with connections to Silicon Valley told the Business Times the loss of the flights could hamper their businesses or even kink the lifeline of venture capital investment that helps University of California, Santa Barbara, spinoffs become major employers.

“For us, it’s really important. We have an office here and an office in Fremont,” said Russ Sharer, vice president of marketing for Santa Barbara-based broadband infrastructure maker Occam Networks. “We probably have a person on one of those flights at least once a week.”

The average occupancy on the San Jose flights in 2009 was 27 percent, or about eight seats on a 30-seat aircraft, according to Santa Barbara Airport officials. That’s down from a 43 percent occupancy rate in 2007.

SkyWest spokeswoman Marissa Snow called the cancellation of the route “a decision based on demand.” She said the airline will boost its Santa Barbara flights to San Francisco from six a day to seven starting in June to compensate for the loss of the San Jose route, which could resume if it appears it could turn a profit.

“We certainly would prefer to continue providing the service, but it’s just not economically feasible with what we’re seeing in terms of demand,” Snow said. “We continually review the market conditions to make sure we’re effectively responding to the environment.”

Brian Donahoo, chief executive of online business software firm AppFolio, has investors and other connections in Silicon Valley and is disappointed at the loss of the flights.

He said he doesn’t think the canceled route will cut Santa Barbara off from Bay Area venture funding. But the added logistical difficulty of getting investors to the Tri-Counties could produce a chill, he said.

“It’s easy to say yes to a day meeting in San Jose or Santa Barbara just because you can do it,” Donahoo said. “It’s going to be more of an inconvenience to come here. It certainly is going to have to be more of a planned activity, instead of like it is now, which is more of a spur-of-the-moment thing.”

Jason Spievak, CEO of phone-and-online marketing firm RingRevenue and a South Coast tech veteran, said he was a little surprised to see the route closed altogether, but that it probably won’t devastate his connection to the Silicon Valley.

“I head up to San Jose and Menlo Park at least once or twice a month. Over the past couple years, I’m finding that I’m just as likely to drive the route as fly it,” Spievak said via e-mail.

“When you add in all the airport time on both ends and the car rental time, then flying really only saves you 90 minutes or so,” he said.

Over the years, the route between Santa Barbara and San Jose has come and gone, and tech businesses say they understand the airline’s need to make a profit.

Santa Barbara Airport officials said they are working to get the route restored although they’re unsure when it might happen.

“Once the economy does pick up, we’re more likely to have it reinstated,” said Terri Gibson, head of marketing and communication for the airport.

“But we are working to have it reinstated by either SkyWest or another airline. We understand it’s an important flight for the high-tech companies here.”

Woody Rollins, CEO of cloud-computing firm Eucalyptus Systems, which has investors from Silicon Valley, said his firm uses the San Jose flight often. He’s hoping SkyWest might reconsider and trim the number of flights to San Jose rather than cut the route.

“It appears that United/Skywest has not taken a close look at the resurgence of high-tech activity in Santa Barbara and the critical nature of this San Jose flight,” Rollins said via e-mail.

“Had they looked at the burgeoning tech community before making their decision, they potentially would have come to a different conclusion.”

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