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Rent, fuel prices contributed to decision
Tuesday, July 1, 2008 12:50 PM PDT
Soaring fuel prices. Bigger planes. A weak winter market. Competition. Airport terminal rent costs. Increasing fees.
That’s the check-off list of problems at the Southwest Oregon Regional Airport that prompted Horizon Air to announce it will stop all flights between North Bend and Portland as of Oct. 11.
Coos County Airport District Board Chairman Mike Lehman said fees for Horizon could be doubling or tripling, but not increasing tenfold as rumors have been indicating. His best rough estimate today is that rent on the baggage claim and holding rooms would go from $1,500 per month to $2,500 or $3,000, depending on the number of passengers. Since SkyWest Airlines and Horizon are sharing the cost of the facilities, Horizon’s share could go up or down.
“If in fact, SkyWest had no passengers, their cost would jump dramatically,” Lehman said.
From inside the new airport terminal all the way across to the old terminal, voices still are resonating with everything from words of hope to disbelief. The blue-colored steel tiles on the outside of the new terminal Monday reflected the dampened spirits inside, where people were readying for a terminal grand-opening gala tonight. The first Horizon flights from the new terminal are to leave for Portland on Thursday. Next Monday, SkyWest Airlines’ new service to San Francisco begins.
What could have been a festive time has become bittersweet for airport officials, including Airport Executive Director Gary LeTellier. He and Coos County Airport District commissioners have an enormous problem to solve.
“The bigger issue is the viability of the route and converting to larger airplanes,” Horizon’s vice president of marketing and communication, Dan Russo, said Monday.
Horizon is replacing an entire line of smaller aircraft used at airports throughout the nation. The company will replace Q200s, that hold 37 passengers, with Q400s that seat 76. Horizon managers feel the fuel-efficient larger airplanes would be difficult to fill with passengers at both the North Bend and Klamath Falls airports, he said. The Klamath Falls airport fell victim, too.
“There are airport rents and fees — not only there, but on the other end in Portland, too,” Russo said.
With the new airport, the airline also would have to add more staff, he said.
“Increased terminal costs do not help the situation,” he said. “Another carrier coming in with flights to San Francisco does not help the situation.”
LeTellier said the airport will charge a new annual $6 per-square-foot user fee for the baggage-claim and hold rooms at the new terminal. SkyWest is required to pay for half the space with an additional $6 per square foot per year, totaling $12 per square foot.
“We agreed a long time ago that would change when we moved here,” LeTellier said.
“That was not an issue ever discussed,” he said. “They knew what the price was. In this industry, user fees never dictate this sort of thing. It’s always the marketing.” |