News - Local News - Growth

POSTED: Friday, Jun. 20, 2008

Plans to expand airport raise worries

Present terminal is too small, but future is uncertain

BELLINGHAM — A multimillion- dollar decision on an expanded terminal for Bellingham International Airport may be made in the next few months, despite looming uncertainties about oil prices and the economic future of the airline industry.

On Thursday, Port of Bellingham commissioners got an overview of their airport options from John Yarnish, aviation planning manager for URS Corp. of Seattle. URS is studying options for airport expansion here under a $225,000 contract.

Planners say the existing terminal is too small for today’s loads of about 350,000 outbound passengers per year, and will be increasingly cramped if growth continues.

As recently as 2003, before Allegiant Air began operations here, the airport was serving about 65,000 outbound passengers per year.

By the close of the two-hour session, commissioners appeared to be leaning toward an option that would roughly double the existing terminal’s 26,000-square-foot area. That could cost upwards of $20 million, although cost estimates are very rough at this stage. The money could come from a combination of Federal Aviation Administration grants, bonds backed by per-passenger airport fees or other port revenue.

But commissioners were clearly worried about investing in an industry beset by storm clouds of uncertainty.

“We don’t want to lead the curve in investing the public capital to do this,” Commissioner Doug Smith said.

Commissioner Scott Walker asked Yarnish about his level of confidence in predictions of an average 3 percent annual passenger growth for Bellingham in the decades ahead, at a time when fuel costs are at unheardof levels, ticket prices are soaring and airlines are slashing their flight schedules.

“That’s the big question in the marketplace right now,” Yarnish said. “There’s a lot more teleconferencing going on today. People are getting used to not traveling. … We still believe that people in this country want to fly. We don’t really know. I don’t think anybody knows.”

He also observed that Bellingham’s two air carriers, Allegiant Air and Horizon Air, are among the industry’s healthiest. Horizon is owned by Alaska Air Group, parent company of Alaska Airlines.

But Bellingham’s reliance on two airlines for all of its business was also a concern for commissioners. Two-thirds of passengers now using the airport are flying on Allegiant.

“Does it concern you that two-thirds of the traffic is one airline?” Walker asked Yarnish. “Yes,” the consultant replied.

He added that Allegiant has proven the viability of airline service from Bellingham to destinations in California, Nevada and Arizona. If the still-profitable recreation-based airline ran into problems, other airlines would likely consider operations here. But again, he admitted to uncertainty.

Allegiant has recently begun to explore the possibility of offering flights from Everett’s Paine Field. Airline spokesmen have said that would not affect Bellingham, but Yarnish acknowledged it was one more source of uncertainty in Bellingham’s future. He also noted that Paine Field has no facilities to serve commercial aviation, and getting those facilities built in the face of hot political opposition would likely take many years.

Port Aviation Director Art Choat also noted that close to half of Bellingham’s outbound passengers are coming from Canada, and Everett would not be a likely competitor for that market.

Choat added that Allegiant’s new flights to California cities have been filling up, and airline executives are delighted.

“They’re in love with Bellingham,” Choat said. “Their statement to me was, they do not know where the top is in Bellingham.”

Reliance on Canadian business, however, is one more source of uncertainty. Yarnish noted that changes in exchange rates, today’s heavy Canadian taxes on air travel and bordercrossing issues were still more unpredictable factors that could affect usage of Bellingham’s airport.

Expanding the terminal would be a three-year process, with a year of design and engineering work followed by two years of construction. Choat said construction would be prolonged, because contractors would have to work around ongoing airport operations.

While commissioners expressed uncertainty about the terminal expansion option, they showed close to zero interest in an even more ambitious option that would build an allnew terminal to the west of the existing runway. Yarnish said such a move would be even more costly, but would enable the airport to expand to serve a much wider region, including many travelers now relying on Sea-Tac International Airport.

“The whole idea of attracting Seattle travelers to Bellingham to use our airport, I think that would be totally unacceptable to the community,” Smith said.