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7.30.2010

Sea Port Airlines Numbers Descend

Company’s specials, schedule changes don’t seem to help airline’s passenger count grow

By CASSANDRA PROFITA
The Daily Astorian

So far, Astoria's second year of passenger air service to Portland is not looking any better than the first.

In fact, it's looking quite a bit worse.

This June's passenger counts on SeaPort Airlines' 25-minute flight between Astoria and Portland were half what they were last June. The last full week of June saw the lowest weekly count since the service started: 29 passengers.

SeaPort has tried changing flight times, offering promotional rates and many other advertising strategies to make the service work. But so far - three-quarters of the way through a two-year subsidy plan - the planes are still averaging less than two passengers per flight. Last month, the company dropped Astoria's third round-trip daily flight to Portland and added a third flight between Portland and Newport.

Newport's counts have been more encouraging, ranging from 49 to 127 passengers per week in the past few months compared with Astoria's range of 29 to 54 passengers.

Many point to the shorter distance between Astoria and Portland - on top of the faltering economy - as the reason for the low numbers.

"I'd be much happier if they were going up," said SeaPort Airlines President Rob McKinney. "We're still on track to make it through the end of the two years, like we originally planned. But the goal is to use subsidy money until it's sustainable on its own. If nothing improves it's going to be thin to make that leap."

SeaPort is once again offering a $49 one-way fare for first-time fliers and preparing to swap out its Pilatus airplanes with cheaper Cessna models by September.

The airline charges between $49 and $149 for one-way flights between Portland and the coast. It keeps income from ticket sales and receives a subsidy payment that guarantees revenue up to a preset cap. The cap will continue to drop to conserve the grant money until at least March. The subsidies come from $4 million in state and federal grants secured jointly by the Port of Astoria and the city of Newport.

McKinney said to make the service sustainable after the subsidies run out, Astoria's nine-passenger flights need to be two-thirds full on average. Since the service started, the planes have been 16 percent full on average.

"It looks way grim," said Port of Astoria Airport Manager John Overholser, who crunches the weekly passenger numbers and lays them out in spreadsheets.

Overholser said flight schedule changes have not helped matters and may have alienated some of SeaPort's customers.

Because passenger counts haven't reached the targets set last year, he said, SeaPort is not receiving the full subsidy amount.

SeaPort recently secured an interline agreement with USAir that will make it easier for passengers to book connecting flights effective at the end of next month. The agreement, together with e-ticketing on Expedia.com, could be a boon to business.

"We're hoping those are the things that are going to turn the tide," Mc-Kinney said. "Until those items have a chance to plan out, it's premature to make judgments."

But SeaPort was supposed to have an interline agreement in place a year ago under the company's contract with the Port, the city of Newport and the state of Oregon.

A passenger demand analysis completed by Mead & Hunt of Eugene last month looked at nearly 4,000 bookings and concluded that Astoria's air service has struggled because of the high cost of SeaPort's Pilatus aircraft, low ridership and lack of interline ticketing and baggage agreements that have limited Internet reservation options.

"The decrease of passengers from March through May is a concerning trend and one that needs to be reversed if the community is to maintain air service," the study found.

The study also found that although Astoria's population base and commercial activity are small, the area's tourism base combined with U.S. Coast Guard activity and the fishing industry create a need for air service - just not a large demand.

The community needs to promote using the local air service, the analysis says, and work with SeaPort to make the service more convenient. It also noted that service to Seattle would be helpful because of Astoria's connection with the Alaska fishing industry.

Port of Astoria Commissioner Jack Bland said the sluggish economy has made marketing more challenging, but he believes the area needs air service.

"It is important for the community to have the connection, for people to be able to come and go from our community through Portland and Seattle," he said.

Air service would be key to promoting the North Coast to entrepreneurs who want to bring their businesses here, said Bland. He has advocated for adding an air service leg between Seattle, Astoria and Newport.

He said he's hoping SeaPort's plan to replace the Pilatus PC 12 planes with Cessna Caravans will save enough money per flight to extend the life of the subsidies until the service can sustain itself.

McKinney said that is the plan.

"I want to make sure people don't lose heart," he said. "We're getting there. We're making progress."

If ticket sales don't improve by the time the subsidy money runs out, McKinney said, "We will - if we can break even - keep going to keep the service up. But we can't fly the route at a loss."

Port of Astoria Executive Director Jack Crider said the community will have some decisions to make when the subsidies run out. If the service still isn't self-sustaining, he said, there might be other ways to keep the service running. Once Astoria is on its own, as opposed to being part of the airport consortium with Newport and the state of Oregon, Crider suggested local leaders can consider ways to tailor the service to the community's needs - possibly by tweaking flight schedules and ticket prices.

"We're still competing with cars," said Crider. "We'll have to look at the numbers and the bottom line of what it will cost to continue. If we pull together the right combination, maybe the community will support it."

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