Four years ago, Spokane International Airport was as good a public facility as you would ever want to find for taking a nap.
Just grab a seat anywhere - in one of the concourses, or the rotunda, or out by the baggage carrousel - put your feet up and drift off.
But no more.
Now, the first thing you’d have to do is find a place to park.
Then you’d have to hike from one of the new overflow lots out beyond the parking garage to the terminal, fight the crowds in the building, and pick your way through the hammering and sawing at the various construction projects.
Quite a change from 1991, when you almost expected a librarian to jump out from behind one of the gate desks and shush you if were talking too loudly.
But then four years ago, it cost $200 just to fly to Seattle.
“My goodness,” says John Morrison, Spokane Airports executive director and chief executive officer, “today you can fly to Seattle for $59 ($118 round-trip). And if you can go on 14 days notice, you can do it for $29.
“Air travel today is not like it was 10 years ago,” Morrison adds. “Today, we’re just part of the mass transportation system. We’ve got people walking around out there with their clothes packed in a grocery sack.”
Shades of the Greyhound Bus Depot. Is the rabble taking to the air?
Well, sort of.
The Spokane International Airport, with all its modernizing, updating and security enhancements, is a far cry from an outpost for transients.
But the competition among airlines there has, during the past three years, made air travel attractive and affordable to an entire new economic strata. People who simply couldn’t afford to get on an airplane in Spokane four years ago can now, and they are doing so with greater and greater frequency.
And, Morrison says, the airport’s board of directors is determined to see that the growth trend continues.
Spokane in exclusive company
Spokane International is one of a handful of airports in the United States that, since 1992, has undergone explosive growth that dwarfs what has happened in the rest of industry.
Morrison lists these high-growth facilities as Birmingham, Ala.; Tallahassee, Fla.; Colorado Springs, Colo.; Boise and Spokane.
And each, he says, shares a common denominator.
“What really was the key to our growth,” says Morrison, “was this low-cost carrier (Morris Air) that came to town in 1992.”
Joy Ruple, a travel consultant with The Travel Place, concurs that the low-fare phenomenon has created a whole new kind of air traveler.
“It’s just a completely different class of people,” she says. “People who used to take the bus now travel by air.”
They limit themselves to the low-fare carriers, or wait for a fare war to bring down prices on Delta, United, Horizon, Alaska or Northwest.
While that’s good for Spokane International and tourists, it’s not necessarily a plus for everyone in the tourism industry.
The margins on the low-fare tickets are so low that travel agents don’t make any profit by booking those transactions, Ruple said.
“We just hope that doing the ticket will generate good will and the customer will remember us if they do book a full-fare ticket.”
Some travel agents, in fact, have begun to charge customers for making travel arrangements involving a low-fare carrier.
That trend could continue, since low-fare carriers are the fastest-growing segment of the air-travel market.
Low-fare carriers are at the root of the growth in each of the other cities listed by Morrison.
In most of those cases, a low-fare carrier saw great growth potential in markets that had been stereotyped by full-fare carriers as low-growth, high-cost outposts.
Some of them, like Spokane, were even listed as candidates for abandonment when the economics of the airlines industry took a big plunge during the first years of this decade.
Within a year of Morris’s arrival in Spokane, both Alaska Airlines and Continental Airlines left the market, renewing fears among local business travelers and travel agents that Spokane International Airport’s destiny was to be a commuter hub.
But not long after Alaska’s departure in June of 1993, the profundity of Morris’s effect on the Spokane air travel market began to emerge.
Morris came to Spokane on June 1, 1992, and offered Spokane-Seattle fares at less than half the prevailing rate. The established carriers had no choice but to match the offer, and hope that Morris would fail to draw enough passengers to stay in business here.
Instead, Morris pushed the fares even lower. The trick was, Morris was able to hang on long enough to capitalize on the new market of fliers the airline’s continually declining fares had created.
In the five years before Morris’s entry into the market, Spokane International’s growth in passenger traffic was negligible.
But in 1992, it jumped from 1.6 million to 1.85 million. In 1993, it jumped to 2.3 million. And in 1994, almost 2.7 million passengers got on and off airplanes at the airport. Morrison says that figure will increase about 14 percent this year.
All this during a time period when the Federal Aviation Administration pegs the average growth at U.S. airports at 3.4 percent annually.
“We don’t think this growth rate will go on forever,” says Morrison. “But the airport board does feel we’ll continue to experience double-digit growth for probably the next three years, and at that time it will level off.”
Southwest leads growth
Any concern that low fares would be a temporary thing vanished in early 1994 when Southwest Airlines announced it had purchased Morris and would begin service in Spokane and other Northwest markets. Southwest - the pioneer in low-fare service - rarely leaves markets once it enters them.
Morrison points out that when Southwest initiated service here in the summer of 1994, Morris was operating six flights daily out of Spokane International. Southwest officials said they needed to build that up to 11 flights a day to make it worth their while to be here.
“Southwest, at the end of the year, will have 19 flights a day,” Morrison points out.
But the passenger boom has not been limited to Southwest.
“What’s really neat is that when you look at our (full-fare) airlines, their market share has really grown also,” Morrison says.
Horizon Air, owned by the same company that operates Alaska Airlines, expects to board almost 570,000 passengers in Spokane this year. That’s up from 390,000 in 1993, and tops the 425,000 boardings that Southwest expects for 1995.
Delta and Northwest have both experienced steady rates of growth here since 1993. Only United Airlines has suffered a decline. It boarded about 290,000 passengers in 1993, and will board 258,000 this year.
And late last year, Alaska returned to the market with five flights a day.
“What’s interesting,” Morrison adds, “is that our enplanements are up 80 percent (since 1992), but our operations - the number of planes that come and go - are constant right now.
“What that means is that load factors are increasing, and that is where the carriers make their money. Now, the load factors are growing to the point where they have to add more equipment here, and more flights.”
Low fees attract airlines
Regardless of how high the passenger loads are, though, airlines will not expand services in a market unless they can make a profit.
“Certainly, in today’s market, with the limited amount of resources these carriers have to buy equipment, if we’re not able to keep our costs down for them, and they are not able to make a profit in Spokane, they are going to take that equipment and put it a market where they can,” Morrison says.
“Particularly the low-cost carriers.”
Morrison explains that airlines look at something they call “segment cost.”
“That’s how much it costs to run a passenger through the terminal,” Morrison says. “It includes you landing fee, your rates and charges, your fuel costs, everything.”
At Denver’s new airport, he says, the segment cost is $21. At Portland and Sea-Tac, he estimates, it’s about $7.
The segment cost in Spokane is a little more than $3.
“You’re not going to find any low-fare carriers flying through Denver,” Morrison says.
The Denver segment cost, in fact, is what’s driving the growth at Colorado Springs, which Morrison says has probably experienced more growth than anybody else.
So the puzzle facing the high-growth airports is how to expand to cope with the growth, and yet not incur expenses that will drive up costs and force the low-fare carriers to look elsewhere.
“We run this operation like a business,” Morrison explains. “If we put $100,000 into an improvement, we expect a return on that. The return we shoot for is 12 percent. Sometimes we are able to do better than that, and sometimes we don’t quite make it.”
But that approach allows Spokane International to operate and grow without incurring taxpayer expense, and without scaring off the airlines.
So far, the approach has worked very well. Five years ago, before the boom began, the carriers operating at Spokane International accounted for 59 percent of the airport’s revenue stream, Morrison says. Today, they account for 38 percent.
That’s because things like parking, concessions and advertising have become bigger and bigger revenue producers as the airport has been forced to expand. The rental car business is another money maker, and the airport will add a seventh rental company and expand rental car facilities in the coming year.
And, Morrison says, the airlines costs have gone down here because the airport board has been careful in how it has gone about expansion.
“We could build a Taj Mahal out here, and some airports are doing that,” Morrison says. “But we aren’t doing that. That’s not Spokane.
“You don’t see us building a new terminal right now. We think we can manage the gates we have better, without having to go out and build new concourses. That would be very expensive.”
Instead, the plan has been to update the 30-year-old terminal in a series of projects that will keep the hammers and saws going for another three years, Morrison says. About $14 million will be spent this year. Another $10 million is scheduled next year, including rebuilding the roadways and entrance to the airport, and adding a self-serve gas station there.
And in the meantime, the growth will continue.
America West Express, a second low-fare carrier that entered the market with a non-stop flight to Phoenix this summer, is delighted with the response here, Morrison says, “and the winter travel season hasn’t even started yet.”
And airport officials are conducting talks with regional low-fare Canadian carriers to initiate routes to Calgary and Edmonton.
“So we think there are probably going to be some new players in the market,” Morrison says.
, DataTimes ILLUSTRATION: Photo Graphic: All aboard
MEMO: This sidebar appeared with the story: Flying low Low-fare carriers like Southwest Airlines have spurred growth at several airports, Spokane’s included.
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