Transportation

Sacramento airport smooths over turbulence with Southwest

The airport has seen passenger levels rise for the second straight year and is on its way to its busiest year since the recession hit in 2008.
The airport has seen passenger levels rise for the second straight year and is on its way to its busiest year since the recession hit in 2008. pkitagaki@sacbee.com

Sacramento International Airport officials got a surprise – and pleasant – call from Southwest Airlines representatives recently. Instead of holding the annual business meeting between the two entities at the airline’s Dallas headquarters as usual, Southwest executives wanted to visit the capital city to look around.

Sacramento’s air service development manager, Mark Haneke, seized the moment. He rode with the Southwest team on a downtown brew bike ride, minus the alcohol, introduced them to tourism officials from Napa and Lake Tahoe, fed them a “farm to fork” dinner at the Citizen Hotel, gave them a view of the new downtown arena construction site, and took them to the Sacramento Kings opening-night game.

“It was a great chance for them to get a flavor of the downtown revitalization,” Haneke said. “They were very impressed with the new Kings arena site. That is something tangible for them too, because that can result in additional inbound tourism for them to Kings games.”

Notably, the meeting offered a clear sign that the once-sour relationship between Southwest, the dominant local carrier, and Sacramento County is on the mend. The relationship between airline and airport had degenerated into animosity a half-dozen years ago when the county unilaterally raised airline rents and fees to help Sacramento pay for what the airlines complained was an overpriced and overbuilt new terminal.

Sacramento airport officials say they hope a more cooperative business partnership could prompt Southwest to consider adding flights and routes to new cities.

Southwest officials declined this week to say whether they intend to add flights or routes anytime soon – other than a previously announced flight to Boise next spring. But, in an email to The Sacramento Bee, Southwest spokesman Brad Hawkins called Sacramento an important market and said the recent visit gave the airline a better understanding of the capital’s air-service needs.

“These meetings were intended to … validate and inform our decision making process for any future route decisions,” Hawkins wrote.

The meeting was the latest of several positive signs for the local airport, which has struggled financially since the 2011 opening of the new Terminal B and concourse buildings during the height of the recession. The expansion saddled the airport with a billion-dollar debt.

After six years of dropping passenger levels and airline cutbacks, the Sacramento airport is seeing a surge in demand. Passenger levels were up 3 percent last year and are expected to be up nearly 7 percent this year, bringing passenger levels to nearly 10 million, a figure not seen since 2008.

7%Expected increase in passenger levels at Sacramento International Airport this year

Airport executive John Wheat said early signs suggest ridership could be up at least 3 percent next year, pushed jointly by an improving economy and by the airline industry’s cautious efforts to add flights and seats in response to growing demand nationally.

Wheat took over the airport in 2013 with marching orders to improve finances. He said he also has worked to improve the relationships with Southwest and other airlines by slowly lowering their cost of doing business here.

Coming out of the recession, the airport needs to focus its efforts more than ever on competing with Bay Area airports to coax airlines to offer more flights, Wheat said.

“It is major component of growing and competing in our industry,” Wheat said. “All major airports are actively searching and competing for additional air service. That is just the nature of our business, competing for a smaller pie sometimes.”

This summer he hired Haneke, an aviation consultant, to work more closely with airlines on potential new routes as air service development manager. Haneke got his unofficial start in the industry as a 15-year-old who sent American Airlines ideas on how to improve its routing. Now, he said his job is to convince cautious airlines that Sacramento’s growing economy, business community and leisure travelers can fill added flights.

He recently flew to South Africa for an international aviation conference, in part, he said, because competing California airports were there, and Sacramento needs to announce it’s “in the game” internationally, not just nationally.

Haneke said that visit likely won’t pay immediate dividends, but his job is to position Sacramento to expand in the long term as well as in the next few years. He recently pitched several airlines on adding Mexican beach cities to their mix. He also hopes to land flights to Vancouver, British Columbia.

One of his goals is to sell Sacramento as the easy-entry gateway to Northern California, including the popular Napa Valley. Sacramento can do that by offering flights to cities the Oakland and San Jose airports don’t, such as Charlotte, N.C.

Haneke said he is trying as well to persuade Southwest to add nonstop flights to cities in the middle of the country and to the East Coast.

His efforts come at an opportune time. Domestic airlines have been in post-recession recovery mode since 2011, ordering new jets and slowly expanding business. Jet fuel costs have dropped dramatically, from $112 a barrel in 2012 to $54 a barrel in 2015, according to the Airlines for America industry group, which includes Southwest and other major Sacramento carriers. The reduced operating expenses have allowed airlines to ease fares this year.

The industry expansion is a cautious one, though. Nationally, seats in the sky are fewer than in 2008, the last good year before the recession, and considerably fewer than in 2007.

Barry Broome, president of the Greater Sacramento Area Economic Council, the region’s business development entity, is pleased with the direction new airport managers are taking and said his fledgling organization intends to work more with the airport in the coming year.

You want to find a way in which your airport can overperform and lift the market.

Barry Broome, president of the Greater Sacramento Area Economic Council

“There is no question the airport is a critical economic driver” for the Sacramento region, Broome said. “You want to find a way in which your airport can overperform and lift the market.”

That includes pulling more fliers in from the outer Bay Area, by selling them on the local airport’s ease of use compared to Bay Area airports. “How can we capture more of that trade area, so we have more direct flights?”

He said he’d like to see more direct flights to Chicago, New York and Washington, D.C., and he even talked this week about the value of a direct flight to Asian business markets such as Shanghai or Tokyo.

Broome noted that business costs are much higher in the Bay Area than in Sacramento, a fact that Sacramento could leverage if business travelers could get here easily.

“If we were able to get direct flights into those markets our entire commercial and foreign trade relationships will change with those markets,” Broome said. “You can’t do business anywhere in the U.S. if you can’t get there easily by air.”

“It is a little chicken-and-egg,” he said. “We have to be ambitious and determined.”

Haneke said the recent Southwest visit bodes well.

“They definitely (left) with a positive impression of the upside potential we have in terms of new markets,” he said. “I’m hopeful as they continue to make new service decisions that we will be front of mind based on their positive experience of our local market.”

Tony Bizjak: 916-321-1059, @TonyBizjak

SMF’s leading airlines

Ranking the airlines that serve Sacramento International Airport by enplaned passengers in 2015:

Airline

Passengers

Change

Southwest

1.9 million

+6.0%

United

265,000

-2.8%

American

229,000

+26.8%

Alaska

227,000

+18.9%

Delta

223,000

+3.2%

U.S. Airways

187,000

-6.6%

Data for first nine months of year

Source: Sacramento International Airport

Route changes

Recent changes for airlines at SMF:

Map of destinations started or stopped 

Service ended

Airline

Destination

Date

Frequency

1. Alaska

Palm Springs*

May 2014

1/day

2. United Express

Eureka/Arcata

Dec. 2014

2/day

New service

3. SeaPort

Visalia

March 2015

2/day

4. AeroMexico

Mexico City

April 2015

3/week

5. Southwest

Dallas Love

April 2015

1/day

6. Delta

Seattle

May 2015

4/day

7. JetBlue

Boston*

June 2015

4/week

8. Southwest

Boise

Jan. 2016

1/day

*Seasonal service

Source: Sacramento International Airport

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