Airport to ink deal for flights south

By Jo Rafferty, Staff Writer
Wednesday, March 26, 2008 | 11 comment(s)

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Residents and visitors to the Bay Area now can look forward to flights to and from San Francisco.

Airport Executive Director Gary LeTellier said Tuesday afternoon that an announcement about Sky West Airlines service will be made today at 2 p.m. in the Southwest Oregon Regional Airport terminal.

At press time, no information had been released on flight schedules, but LeTellier has said there would be four flights per day — two incoming, and two outgoing.

Sky West is headquartered in St. George, Utah, and offers flights through United Express, Delta Connection and Midwest Connect.

The Coos County Airport District will be contracting with the United Express service.

Timm Slater, executive director of the Bay Area Chamber of Commerce that has more than 600 members, said Tuesday that he thought the southbound flights would be beneficial to the region.

“Businesses in the area have connections in the San Francisco Bay Area,” Slater said. “There is a high percentage of people from that area, so maybe we’ll see more visitation that way. San Francisco provides a pretty significant hub.”

Dan Smith, president and CEO of Bay Area Hospital in Coos Bay, said he sees benefits for hospital staff when traveling and for shipment of supplies. He said items including orthopedic implants currently can only be flown over from Portland, “since that’s our only terminal out of here,” he said. “Either that, or by ground transport.”

He said having the alternate route from San Francisco would give the hospital more choices of where to obtain medical equipment.

Commissioners unanimously agreed at an emergency meeting Tuesday morning to add $250,000 to a $400,000 pledge to Sky West Airlines to convince the airline to provide service at Southwest Oregon Regional Airport.

The $650,000 would offset company concerns about rising fuel costs, LeTellier said.

“It just made enough of a difference in the margin,” LeTellier said.

Late Friday afternoon, LeTellier said he received a phone call from Sky West’s President, Russell “Chip” Childs, about the deal that has been in negotiations for months to provide service to San Francisco in a partnership with Klamath Falls International Airport.

“The president said, ‘We’ll go with Klamath, but we’ll not include North Bend,” LeTellier said. “They were going to go ahead with Klamath without us.”

Sky West had estimated that Klamath Falls is close enough to San Francisco to make the Southern Oregon city more profitable, according to LeTellier.

LeTellier called Airport District Chairman Mike Lehman and other commissioners over the weekend, to come up with a plan to help guarantee the airline’s interest in the airport.

Part of the plan is that the airline will calculate profits and losses on a month-to-month basis, with the $650,000 as a maximum backup, to be paid in monthly increments if there is no profit in a specific month. At the end of the year, any overpayments would be returned to the district.

“This $250,000 — is it a guarantee on seats? Is it a guarantee on fuel?” Commissioner Joe Benetti asked LeTellier.

“It’s a guarantee they break even,” LeTellier said.

The additional funds would be covered by pledges from local businesses, he added.

The original $400,000 already was covered through a Federal Aviation Administration grant.

An additional $75,000 grant was received for marketing, to be administered by the South Coast Development Council.

“We ran the risk that they’ll pass us by here,” LeTellier said. “This is a chance for us to open this new market.”

Commissioner Helen Brunell Mineau acknowledged that the winter months could be lean, with not many passengers heading to Bandon Dunes Golf Resort.

She said she did some calculations that she shared with the board. She figured that Sky West’s Embraer twin-engine turbo airplanes will seat 30 passengers, and with four flights per day going to and from San Francisco to North Bend, that means 43,000 passengers.

“Sky West has predicted it needs the planes to be 70.8 percent filled (to break even),” Brunell Mineau said. “That’s 84 people a day.”

She said she worries most about the off-season, between October and May.

“I think we can do it, but the local people here really have to get used to using this service,” Brunell Mineau said.

Commissioners unanimously agreed that pledging the money is worth the risk.

LeTellier said Tuesday morning that estimates have indicated flights could bring a half-million to the community annually. And revenues could mean $50,000 a year in landing fees and space rentals, and $90,000 in passenger charges.

There also would be the income from concession charges and paid parking, he added.

“Probably it’s time we step up with the money,” Lehman said. “If we’re going to move forward in this community, we’re going to have to do things like this.”

Commissioner John Briggs said he wanted to add one comment: “To the people who say they want it, I hope they use this service even if it’s $30 more for the ticket (than at another airport),” he said.

Lehman asked LeTellier what happens if travelers don’t use the service.

“In a year, if they don’t (use it), it will turn into a pumpkin and go away,” LeTellier said.
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Robin Hood wrote on Jul 6, 2008 10:38 AM:

Forcing all taxpayers to pay for some people's flights South is unfair. Now look at just one of the negative consequences of this unfair subsidy. Klamath Falls is now threatened to loose Alaska/Horizon Airlines flights to Portland, Oregon. Now, why should Alaska have to compete with an airline that is subsidized? They shouldn't, it's wrong, it's unfair. It be fair to give the same amount of money to Alaska/Horizon as is being given to Sky West. But it be more fair just to let the private sector forces prevail without government taking from all taxpayers to pay for the needs and desires of a few. So now Klamath loses it's flights to Portland on Horizon Air, a very good airline, because of unfair government subsidies. Thanks a heap!

Thank you Alaska for all the good years of service from Klamath to Portland. Your service will be missed!

Frank wrote on Mar 27, 2008 10:25 AM:

I welcome the southbound flights, I just wish it was Alaska doing it as United has turned into a clunky unfriendly airline (charging for extra bags & skis & golf clubs, too?). Re: subsidizing Bandon Dunes, that has been money very well spent as far as its economic impact on this community and it will last for years to come. Viva Griffith!

den wrote on Mar 27, 2008 12:09 AM:

Janice, very good referance. Why the New York Times? brings to light the many issues of why there is no County money for law and order, Our county manegers are going to have to get outside the box, in order to operate the County. The current resident pre-pay for infrstructure on the North Spit. Tax dollars for the airport. All the new comers, are subsidized, because they need to hire persons run their business to make them money. The $99,000, tax yearly benifit for Bandon Dunes, and the $400,000 plus $250,000 and the South Coast Development Council $75,000 for and Air line to operate out of the Airportl, would pay for a lot of Law and Order for this County.

Thomas wrote on Mar 26, 2008 9:06 PM:

Interesting that all the major businesses Coos manages to attract require large subsidies or sweetheart deals to be here.

I'd like to see southbound flights, but given the economic outlook, doubt this one will fly for any longer than the payola lasts.




Sabrina wrote on Mar 26, 2008 4:34 PM:

Finally, flights south to San Fran. Thank you.

Former Resident wrote on Mar 26, 2008 2:48 PM:

The NY Times article fails to mention one key element: those jobs at Bandon Dunes that pay $35,000 to $40,000 per year circulate those dollars five to six times throught the local economy in grocery stores, clothing stores, property taxes, etc. That is a pretty good return on your investment. The last time I flew into North Bend I sat next to a New York resident that was coming to Oregon for the first time...North Bend..to play golf. He was going to spend $1500-$2,000 that weekend and was excited to visit such a beautiful area. I was excited to see his enthusiasm...and I knew his $2,000 would really mean about $12,000 benefit to the local economy. The golf course and new airport terminal and flights will be a good thing!

Janice wrote on Mar 26, 2008 1:58 PM:

A very interesting read by David Cay Johnston, in the New York Times regarding the TAX SUBSIDIES of the Bandon Dunes Golf Resort:

http://www.nytimes.com/2007/06/15/business/15subsidy.html?pagewanted=print

Local Yokel wrote on Mar 26, 2008 1:15 PM:

Kudos to the commissioners for taking this step!

Mike wrote on Mar 26, 2008 1:06 PM:

Wow! This is great news! Good to see that we no longer need to drive to Eugene or Portland to go south!

Too bad it cost the taxpayers 600 grand to make it happen.


Great News! wrote on Mar 26, 2008 12:50 PM:

So glad this is finally happening for our community. What a great success story of cooperation and working for the good of the people. Thank you Airport Board & Mr. LeTellier!

SkyWest Guru wrote on Mar 26, 2008 12:07 PM:

As a former SkyWest employee I have been waiting and waiting for them to begin North Bend service. SkyWest is a great company that truly loves its employees and cares about the community. I hope everyone will be supportive of this new service as it is a wonderful opportunity for our community. They believe in the "Family First" motto unlike other places in town.


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