Rent, fuel prices contributed to decision

By Jo Rafferty, Staff Writer
Tuesday, July 01, 2008 | 18 comment(s)

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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.”
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Kay wrote on Jul 2, 2008 9:46 AM:

Ask Bandon Dunes what THEIR biggest market is. You got it, San Francisco. THAT is exactly what this is all about, plus our money guaranteed every seat for SkyWest for the summer. When Fall comes, and golfers don't, they'll pull out too.

But hey, Bandon Dunes will have another wonderful season. Those of us who were fleeced again? Not so good.

I hear the gala was just peachy last night, put lipstick on a pig, he'll share his wine with you.

Invitation only.

Resident wrote on Jul 2, 2008 9:41 AM:

To Out of Here--
You're so right. I have been here for 30 years, and I feel this area used to have the feeling of community going for it. Now no one in business will go out of their way for the customer--so that feeling of community is gone. There is nothing else here (except family for me). I can't wait until I can leave.

Rick wrote on Jul 2, 2008 9:39 AM:

Remember a few months back when the deal with Sky West about fell through?? Then the airport district made Sky West a sweet deal involving using tax payer money to help with fuel! Horizon wants subsidized fuel too! What happened to fair trade? Everyone knew at the time it was not a smart idea, now it is coming back to bite us!

Janice wrote on Jul 2, 2008 8:40 AM:

CONFUSED wrote on Jul 1, 2008 11:36 AM:
Why doesn't Horizon/Alaska just do the flights to SF? I've taken them to SF before and they were more than capable of a great ride..

We had flights to San Fran....we just had to go to Portland first on a great carrier Horizon. I NEVER had a problem getting to San Fran, Kansas City, Honolulu or anywhere else from Portland.
Tell Sky West NO THANKS ! and get Horizon back.

Out of Here wrote on Jul 2, 2008 8:37 AM:

I believe more people go to Pdx than Sfo for linking flights. Yes having a direct flight to California would be nice, but not at the expense of Portland. And why not somewhere like LA or San Diego? I've done a cost difference online for our next vacation and it costs less for a flight from NB to PDX to San Diego than it does for NB to SFO to San Diego. Hmmm???

Out of Here wrote on Jul 2, 2008 8:37 AM:

We fly up to Portland at least once a month. We have family and friends up there. My son's father lives up there. The perk to staying in Coos Bay, was an hour direct flight to Pdx. I know I am just one person in community, but this town will be losing my money, as we will be moving. We keep losing our "perks" in this town. Small family community has turned more into a retirement community. Classroom sizes are in the high 20's to 30's. No tourism, so small businesses are failing. These use to be the reasons I stayed here...but not anymore.
Horizon has been a loyal airline for our community.

Another one bites the dust wrote on Jul 1, 2008 11:11 PM:

wow... another business pulling out of the NB/Coos Bay area... when will the "powers that be" finally wake up, pull their head out of the dunes and realize that this town is DYING! Families are leaving in droves and what is there to stop them? No jobs, no industry, no entertainment... not even a plane to send them on their way! Wow..sad for such a pretty area.

RECALL wrote on Jul 1, 2008 4:11 PM:

TO STEVE P. In regards to the airport issues,one must also remember MR.LEHMAN is a attorney also.That may be why it appears he's talking out his tailend when his mouth knows better.

Frequent Flyer wrote on Jul 1, 2008 3:52 PM:

By the way, get rid of Letillier, send him to L.A. or Palm Springs, where the money is, he's got to big of ideas for this small town...

TAXPAYER wrote on Jul 1, 2008 3:50 PM:

Ok, now do something, anything, to get Horizon back. Lower the darn fee increases or put them back where they were before the stupid terminal was overbuilt. We need Horizon more than an overbuilt terminal. I fly a lot and the old terminal was just fine, never saw a problem, now we have an airplaneless terminal, how smart was that.????
Plus just give us one bigger Horizon plane a day, that would work fine.

Elaine wrote on Jul 1, 2008 3:23 PM:

Now with Horizon gone, who will share the cost of the facilties with Sky West? It better not be more taxpayer money.

Common Sense wrote on Jul 1, 2008 2:59 PM:

Bad business.....remodeling & expanding shouldn't mean increased rents/fees for LOYAL customers like Horizon was for this airport for MANY years! Another example of Oregon's failed attempt to succeed by doing business BACKWARDS...keep increasing fees until businesses leave & then say...I don't understand why it didn't work!

JOKE: What do you get when you put Coos County Airport District commissioners together with Coos Bay counsel members & Port commissioners?

ANSWER: BROKE

frustrated wrote on Jul 1, 2008 2:47 PM:

something is fishy in all this decision- united express comes in just when the new terminal comes in

instead of money why don't you think of the people

those planes are always full so expense of the plane running is not the reason for all of this

sometimes i got kicked off because of the room on the plane

we need this plane going to pdx more than going to k. falls or sfo

listen to the community not politics or money

Peggy wrote on Jul 1, 2008 2:38 PM:

To Confused and Flyer:
Why doesn't Horizon do the flights to SFO? Well, because our Port pushed them out by signing a contract with SkyWest!!! If I were Horizon, I would be humiliated at the treatment they received!

As far as cutting back to 1-2 flights per day,.... why would they do that. They were hardly making profits with the addtional flights.

The Port slapped them in the face, is what happened. I don't blame Horizon. I doubt they will ever want to do business in our community again. The Port has basically made a decision that will force locals to move out of the area, bring fewer people into the area, and have a huge new building that the taxpayers are forced to pay for whether we like it or not.

Just lovely.

flyer wrote on Jul 1, 2008 1:33 PM:

Instead of having four flight from North Bend to Portland a day, how about cutting it back to one or two a day?

Mike wrote on Jul 1, 2008 12:34 PM:

Maybe now you people who wanted this terminal will listen to your friendly neighborhood geek who has been explaining for years the availability of HD teleconferencing, laser speed communications and real time video feeds. Therefore the days of making a long trip to a major city on business is gone.

The real reason is to attract San Francos to Bandon Dunes, that is why the terminal was built.

Steve P. wrote on Jul 1, 2008 11:43 AM:

OK, with this news item we now have three reversals (or denials) in less then two weeks by Lehman and others. Who is telling the truth. Time for an independent investigation.

Confused wrote on Jul 1, 2008 11:36 AM:

Why doesn't Horizon/Alaska just do the flights to SF? I've taken them to SF before and they were more than capable of a great ride..


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