BOISE -- Airlines leaving, passengers declining, and fewer and more expensive flights have all impacted the local business community. Now, some business groups are looking at ways to stop losing service and perhaps gain more.
Flights, passengers, seats all decreasing
Around five years ago, the Boise Airport hit a peak. That is when the airport had the most passengers, the most seats available, and the most planes coming in and going out.
Since then, the most recent complete year of data (2011) shows almost all of those numbers are the lowest in more than 10 years, and airfares have increased. Recently, Southwest has dropped Reno, Seattle, and Salt Lake City flights and announced its pulling of Portland flights. American Airlines stopped flying to Los Angeles, and Frontier stopped flying to Denver.
Passenger counts and the number of available seats have also decreased. In 10 years, the seats available have decreased by more than 400,000 each year.
I see it as a critical, critical issue that Idaho and Boise need to start talking about because it is tough out there, Clark Krause, Boise Valley Economic Partnership Executive Director, said.
Fewer flights than 10 years ago.
The number of flight arrivals peaked in 2006 and 2007, with 29,210 and 28,230 passenger planes arriving in Boise, respectively. In 2011, that number had dropped to 20,611. That number is even lower than 2002 numbers, which saw 27,440 passenger planes come into Boise's airport.
According to a recent grant application by the airport, capacity has declined at the airport and was likely to drop by 20% in the second half of 2012 versus the same time period of 2011'. The airport went in with the Sun Valley airport to request money for service between, and add a nonstop flight to the south. The airport called a lack of service to the South an economic detriment , and noted a 17.4% passenger decrease in Boise.
To see examples of flights and airlines in 2007 and 2011, see the related items on the right side of this story.
Local companies impacted by airport trends
The local business community has been talking about Idaho air travel issues, and now they are looking at ways to tackle what has become a challenge for current and potential Idaho executives.
I mean, when we talk about flights, [business leaders] shake their heads and say yeah, we need to be paying attention to the flight bands in and out of here, flying to major cities, making sure we make that as convenient as possible, Krause said.
MWI Veterinary Supply is a Boise-based company with an annual $2 billion in revenue from animal medical supplies. The company has around 1,700 employees working across the United States and United Kingdom, making travel essential.
Air travel is really important for us to meet face to face with our customers, our suppliers, and our employees, Jim Cleary, President and CEO, MWI Veterinary Supply.
MWI executives say the Treasure Valley workforce and the airport facilities are top notch, but air travel is comparatively more difficult than in other cities.
The cost has gone up. The available seats have gone down, Mary Pat Thompson, MWI Veterinary Supply CFO, said. Typically we will fly Boise to Denver or else Boise to Chicago. So those are pretty popular routes and do fill up very quickly.
Chamber of Commerce calls air travel a top priority for 2013
Boise Metro Chamber of Commerce President and CEO Bill Connors is also on the airport commission and closely watches business and aviation, and the tie between.
Yes, it's an issue we are very, very concerned about. Matter of fact I'd say it's one of the number one, number two issues the Chamber is looking at in 2013, Connors said.
Connors says airport accessibility and usability are big selling factors when Boise is trying to attract a new company, and therefore new jobs, to the area.
We are not as competitive as other [cities] if they have direct flights to important cities that their customers are doing business in, Connors said.
He says Boise still remains reasonably competitive and accessible, but the area can't afford to lose any more flights.
You can still get from Boise to Beijing. You can get from Boise to New York without a whole lot of hassle. But obviously we're worried about losing those non-stops to major hubs, Connors said.
Why flights leave: The 80% rule
In April, Rebecca Hupp took over as airport director. She says like all airports, Boise's air service is directly tied to the economy and how many people are flying.
The more people that are flying, the more flights that an airline will put into a market. So really what drives air service is the amount of utilization of existing flights, Hupp said.
Hupp says airports realistically need routes to be at least 80% full to keep them. That number is significantly higher than what airlines could previously operate under (closer to 65% according to airport officials).
Boise's not alone in this phenomenon of decreasing flights, increasing pressure because of fuel costs, and the high cost of doing business, Hupp said. I think that eventually it will turn around, and we'll be well positioned for when that happens, and we'll continue to aggressively market the airport and the region to the airlines to make sure they're aware of the opportunities available here in Boise.
Hupp says airport officials meet with airlines a couple of times each year to talk about routes, but they say it is not simple, and the airlines ultimately are in control.
We're really a landlord for the airline and have very little say in where airlines fly. We do offer suggestions and insight into the market, but they make their decision based on the market, Hupp said.
Business groups consider buying seats, subsidizing air travel
Business groups, like the Boise Valley Economic Partnership, know about the airlines looking for certain load factors and what decreasing flights mean for the area.
There is a threat there that if we lost more, it's going to affect commerce, Krause said.
To keep flights, Krause is looking along with some business leaders at ways to guarantee Boise's flights stay above 80% capacity by subsidizing.
We may have to buy some seats at some point, guarantee some minimum revenues for some of the flights that we either want to grow or keep, Krause said. Sometimes cities will actually guarantee a certain amount of seats are filled. And if they're not filled, they'll actually pay for those, or there will be some subsidy that either the community or state will provide to that airline to keep that flight going.
Mayor, airport officials optimistic for a turn-around
The airport, business community, and city all say they're committed to working on grants, coming up with ideas. and working on building the community and airport back up to pre-recession numbers.
We don't expect to see much more [negative] happen. The question is can we expand on this and grow some more destinations and flights? Mayor Dave Bieter said. It's among our highest priorities, and we feel really good with our success in securing not just what's going on now but leading to a bright future that gives us the kind of service and the kind of airport that we need.
I think we'd better start having those conversations, and when needed we're going to need to stretch out of maybe some of the old ways we looked at airplanes and how they served our community, Krause said.
Airport continuing to expand despite current lows
Even with lower flight and passenger numbers, the airport is still expanding and making infrastructure improvements, like a recent $8 million runway reconstruction and a parking garage expansion that's up next.
Airport officials say now is the time to do these projects because of competitive bids and good interest rates and that they're confident of a bounce-back. The airport is not funded by taxpayers, so projects like these are paid for solely through grants and airport revenue, like parking fees.
Roundtable discussion scheduled for Tuesday
On Tuesday morning, air industry experts will discuss ways to encourage more service in Boise and address the possibility of guaranteeing seats to airlines. The free roundtable is put on by the Idaho Business Review and begins at 8:00 a.m. at Concordia Law School.