Horizon says it doesn’t have enough planes to fly to North Bend

By Jo Rafferty, Staff Writer
Tuesday, July 15, 2008 | 21 comment(s)

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Horizon Air’s President and CEO Jeffrey Pinneo says that even under different circumstances the airline won’t have enough aircraft to supply Southwest Oregon Regional Airport with Portland flights.

The airline went public in late June with its decision to leave the North Bend airport by Oct. 11. It was three days prior to a gala that celebrated the opening of a new $20 million terminal at the airport. At that time, Horizon stated due to high fuel costs combined with the introduction of larger planes it could no longer serve the North Bend and Klamath Falls airports.

South Coast business is seasonal. Since 1982, when the airline began offering service from North Bend, it has had a hard time making a profit here. That’s another reason for the airline’s decision.

Coos County Airport District Chairman Mike Lehman said, during a meeting with Pinneo at Horizon’s headquarters in Seattle on Friday, he even offered to guarantee filling Horizon’s larger aircraft, Q400s, so the airline could continue offering service at North Bend.

Pinneo said no.

He cited concerns over a volatile market created by competition with SkyWest Airlines and seasonal fluctuations in service. But over and above these factors there’s a lack of airplanes.

“He said, ‘Even if you can fill up the Q400s, it’s still not enough to guarantee flights, because of the risk,” Lehman said. “‘Even if we wanted to take the risk, we don’t have enough planes to do it.’”

Horizon spokeswoman Jen Boyer today reiterated Horizon’s stance that the airline doesn’t have enough of the larger aircraft to accommodate North Bend, but said it was not one factor alone that pushed Horizon to cut service.

“Everything contributed,” Boyer said. “The environment today is why. The fuel prices are really going through the roof.”

High fuel prices pushed Horizon Air to  buy more fuel-efficient aircraft that seat 76 passengers rather than the 37-seat airplanes that land at North Bend now. The smaller aircraft should be gone companywide by the end of October.

On Friday, Pinneo and executives with the Alaska Air Group, Inc., the holding company for Horizon Air and Alaska Airlines, met with Lehman, Airport Executive Director Gary LeTellier, Airport District Commissioner Helen Brunell-Mineau and two local businessmen, Dale Sause of Sause Bros. and Hank Hickox, general manager of Bandon Dunes Golf Resort. Their businesses would be affected by the loss of the Portland connection.

But their attempts to convince the airline to stay couldn’t sway Horizon’s president.

“In a nutshell, their first thing was that this market has always been marginal,” Lehman said. “The fuel was the nail in the coffin. When you add the fuel prices, that makes it virtually impossible.”

Pinneo told the North Bend officials the airline itself was struggling due to gas prices.

“He said, ‘We are in a survival mode,’” Lehman said.  “‘About 30 percent of our cost now is attributed to fuel.’”

Boyer confirmed that a significant portion of the airline’s expenses goes to fuel. For every $1 increase in the cost of a barrel of oil, it costs Horizon’s parent company, Alaska Air Group, an extra $10 million to operate, she said.

“We’re just digging in, trying to ensure Horizon will be around in the future,” Boyer said.

(Staff Writer Jo Rafferty covers business news for The World. She can be reached by calling 269-1222, ext. 236; or by e-mailing to jrafferty@theworldlink.com.)
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quit complaining and deal with it... wrote on Jul 24, 2008 2:02 AM:

just to let you know, it would not have mattered if the airport stayed the same or not, horizon cancelled ALL their flights from ALL airports... the airport had to be made bigger to accomodate larger planes in order to still operate because horizon merged with alaska airlines, and they are not going to be using any of the small planes for any "short" flights.... do your homework. beleive me, i have, i am in san jose and fly to north bend to see family all the time. my flights will be changing because of no more non stop flights from horizon.

Kay wrote on Jul 22, 2008 1:17 PM:

MM: Horizon would NOT have pulled out if the Airport Board had not opened up the "loophole" that kept them here.

Period.

And YOU must know that.

MM wrote on Jul 20, 2008 12:35 PM:

Moonpenny... you don't have a clue!! Horizon hasn't been making money on this place in years. They don't have a problem with Skywest they have a concern of saving their own airline. Do you think they want to fly into a place that cost them money? I wish people would stop pointing fingers and trying to find blame in eveyone associated with the airport. It has to do with the ecomony and price of fuel. If Horizon was making money on our area they wouldn't have pulled out!!

moonpenny wrote on Jul 17, 2008 7:17 PM:

Horizon took their ball and went home.

We changed the rules so that we could accomodate our community for the future and made a new friend, Skywest. Horizon is jealous, they liked the monopoly in this area, they liked being the only airline to accomodate the Bandon Dunes.

Welcome Skywest!

RECALL wrote on Jul 17, 2008 2:48 PM:

TO CURIOUS AGAIN::::::::Don't know where you sit on the ladder in this town, but the airport officals only want to cater to certain people at the upper part of the ladder.Us other people need air service also.They made many mistakes,and need to play with their own money and not the tax payers.RECALL and REPLACE is the only solution.

curious again wrote on Jul 17, 2008 2:34 AM:

I'd just like to add that I commend the airport for trying to make improvements and offer more choices, but in their zeal to attract a San Francisco flight, we've been put in a position that is far worse than where we were a month ago.

I sympathize with the public pressure and criticism that the board and staff are getting right now and I do not believe a recall is the answer; we need the board's experience if we are ever to survive this mess. I will say this to Mr. Letellier, the Airport board members, and our political leaders:

We are relying on you to fix this; we NEED you to fix this. I have faith that you have the intentions to better our area, now we all need you to turn those intentions into reality.

Steve P. wrote on Jul 16, 2008 12:56 PM:

That would be me, and I am waiting on information I requested to insure it is done right and not overturned.

Tear it up wrote on Jul 16, 2008 11:03 AM:

How about the fact that the rent for Horizon at the new terminal was going to be over 10 times as much as it was at the old terminal? Not positive about the numbers but I heard that they were paying $1,200/month at the old terminal and they would be paying $12,000/month in the new one. The only reason that the new airline (San Fran route) can operate out of here is because the citizens are subsidizing it for $50,000/year. A fact that I am sure angered Horizon since they have been a staple in our community and were not offered a similar deal. I mean $20 mil? I really think that this money could be more effectively utilized considering that roughly 16-20% of the county is below the poverty line.
http://quickfacts.census.gov/qfd/states/41/41011.html

Resident wrote on Jul 16, 2008 10:21 AM:

Where is the guy that said he was drafting recall petitions, and how do we sign these?

Steve P. wrote on Jul 16, 2008 8:27 AM:

Horizon has wanted out of Coos Bay for a long time. The board knew or should have known this. That is their job. Letellier should have known. This was his job. Horizon had and has, a dozen reasons for leaving, but they could not. That is until the board let them out. Greed and a desire to suck up to the golf course in the south county caused them to either ignore, or fail to be aware of, the clause keeping Horizon here. They should have known this was an Essential Air Service site. True, deregulation tying Horizon to North Bend occurred before the tax district was formed, but Lehmen was a minor politico at the time and he at least should have known. And Letellier is being paid to know.

If they knew and still forged ahead, then they failed at their jobs. If they didn’t know then they still failed. If they knew and went ahead with their disastrous plans, they may even be guilty of criminal misconduct. Time for a recall and Letellier must go immediately.

WHAT did he offer wrote on Jul 16, 2008 8:21 AM:

Wait, wait, wait...Mr. Leechman offered to GUARANTEE full flights??? How could he even make such an outlandish offer? Maybe I've got this all wrong, but it shouldn't be the airports job to promise anything, especialy full flights, to a free-enterprise airline. Let the market work...if the business justifies a flight to Portland, another airline will fill the void, if it dosen't...it dosen't.

coty wrote on Jul 16, 2008 3:48 AM:

didnt seem to be a problem for them before since 1982, what seems to be the problem now....

Marcia wrote on Jul 15, 2008 7:50 PM:

I'm amazed that they don't feel they can fill the planes. Every time I've flown in or out of NB - the plane is packed. Most are rather intoxicated golfers but the plane is full.

CBMAN wrote on Jul 15, 2008 4:45 PM:

How come Horizon keeps adding to their list of reasons why they are cutting service to our area, Fuel costs, competiton, not enough seats sold, now not enough aircraft what is next the salt air rusted thier aircraft, I think a huge lawsuit should be filed and the port needs to hire a new Airport Executive Director that can do the job. I still think the airport is a good idea, we would not have any flights if it were not for it.

OUTSIDE LOOKING IN wrote on Jul 15, 2008 4:16 PM:

For the $20 million spent on the airport redo,perhaps Lehman and crew should have considered buying a airplane to serve our customers with flights north.It's obvious they knew about troubles within ,before the redo started.Their visions at the taxpayers expence is not acceptable.This bunch needs to be replaced immediately,if not sooner.

Blue Eyes wrote on Jul 15, 2008 4:16 PM:

Why didn't the airport officials consider Horizons possible reaction to another airline in the same market? They kept bragging about having 2 airlines and how the new airport can serve 3. Now, we're back to one and who knows how long that will last.

fishy wrote on Jul 15, 2008 3:58 PM:

i don't understand why they don't make a profit when the planes are always full. every time i fly ( which is often ) the plane is always full and they ask for people to stay behind because it is full
it seems very fishy that they decide to quit service just as a bigger company comes in
would united buy horizon off so horizon will not offer flights to pdx any more

something just does not fly right

RECALL wrote on Jul 15, 2008 3:30 PM:

Hey,how about the Port of Coos Bay buying a airline business?They seem to buy other businesses for certain people or companies at the tax payers expense.What would we name this airline service if it happens?

just an idea wrote on Jul 15, 2008 3:30 PM:

I live here in Klamath Falls and we are losing Horizon as well. they are sayiong there is not enough planes or passengers. What if they flew a round trip from Coos Bay to Klamath Falls, then back up to Portland. I would imagine that between the two smaller markets, they would be able to fill the seating of the newer jets. I know it would add some time pending on who gets pickedf up first, but it's far better than losing our flights to Portland. Anyway, it's just an idea. Please don't jump all over my case if you don't agree.

Miller wrote on Jul 15, 2008 11:56 AM:

What now? I loved flying Horizon. I hope we can lure another airline in that gave the same service as Horizon. This is very sad for our area.

just me wrote on Jul 15, 2008 11:47 AM:

Yep. There went $20 mil down the drain.
Real bright people working for you people


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