Bid to bring Denver flights to SLO airport needs businesses' support

kleslie@thetribunenews.comOctober 8, 2013 

Travelers enter the terminal at the San Luis Obispo County Regional Airport.

JOE JOHNSTON — jjohnston@thetribunenews.com Buy Photo

For years, the San Luis Obispo County Regional Airport has been trying to recruit an airline to offer a flight to a major hub east of the Rocky Mountains that would allow business and leisure travelers a quicker path to more destinations.

Now, the Economic Vitality Corporation is trying to enlist local business support to persuade United Airlines and its feeder airline to add a daily flight to and from Denver.

A connection to Denver could open up 85 destinations in the Midwest and East Coast, 25 of which would be entirely new stops that can’t be accessed through SLO’s other connections. (Currently, local fliers heading east must go through Phoenix, Los Angeles or San Francisco.)

The flight would also have the potential to increase the number of passengers who use the local airport.

According to a consultant’s report, the SLO airport currently serves 42.8 percent of all San Luis Obispo area residents who fly — leaving 57.2 percent to look elsewhere for flights.

Many locals chose to instead use LAX (25.5 percent) or San Francisco International Airport (11.4 percent), because of the greater number of flights and destinations available.

For some, the cost of driving to and parking at those airports is also less expensive than the cost of connecting to them through the SLO airport, according to the report by Sixel Consulting Group Inc.

The rest of the local fliers use the smaller Santa Maria (5.4 percent), San Jose (5.1 percent), Oakland (4.6 percent), Burbank (3.6 percent), Santa Barbara (1.4 percent) and Monterey (0.3 percent) airports, Sixel’s report found.

Given the competition, however, small regional airports such as SLO’s have to prove that there will be adequate demand and profit for the airline before going through the multimillion dollar, and oftentimes risky, venture of adding a flight, EVC President Michael Manchak said.

One way to prove a community’s commitment to supporting the flight is through nonbinding pledges.

The pledges do not constitute actual dollars being given to the EVC — they are just a promise that a particular business will spend whatever amount it pledges on travel through the airline during the course of a year.

In return, these businesses will receive discount travel rates through the United Airlines rewards program: 20 percent off on first- and business-class tickets, as well as smaller savings in coach.

Pledging ensures that the airline will have enough business to cover costs, and the airline is then more encouraged to take the risk, Manchak said.

The SLO airport would need to promise about $1.5 million in revenue to the airline to offset the projected loss it would incur in the “start-up” phase of adding a new flight. It would cost an estimated $5.5 million a year to operate such a flight to Denver, Manchak said.

If local businesses fail to spend as much money as they pledge with the airline, a $500,000 Department of Transportation grant will act as a revenue guarantee — or sort of insurance — and the airline can be compensated through that. The airport received the grant three years ago for the purpose of attracting a new airline.

So far, the EVC has received close to $1 million in nonbinding pledges, but it is still seeking more before Friday’s deadline. Its goal is to have the new service in place next spring.

Anyone who is interested in submitting a nonbinding pledge is encouraged to view the application at http://www.sloevc.org/slo-county-business/airport-survey.php.

Santa Maria Public Airport is also trying to recruit an airline — with United Airlines as the main target — with passenger service to a Midwestern hub such as Denver, according to the Santa Maria Times.

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