April 23, 2011
By: David Castellon
After nearly a decade of declining passengers flying to and from Visalia Municipal, city officials are hoping those numbers will grow significantly. Great Lakes Airline begins flying new routes May 15 to and from Los Angeles International Airport and Las Vegas’ McCarran International Airport.
And more people flying could be vital to maintaining passenger service here, as federal lawmakers haggle over a bill that could eliminate most federal subsidies for airlines serving rural areas – including the $1.74 million Great Lakes is contracted to receive this year to provide Visalia’s passenger service.
If that funding is lost, city officials said they don’t believe Great Lakes would go away, even though the fees it collects for passengers and freight cover less than half its operating costs here.
Even if the city were to lose the service, they say it wouldn’t mean the end of the Visalia airport.
“The airport has been there for decades. Sometimes it had commercial [passenger] service, and sometimes it didn’t,” said Visalia City Manager Steve Salomon.
But historically, it has made money either way, he said.
The U.S. Department of Transportation’s Essential Air Service program subsidizes passenger flights to 153 small airports across the country, Visalia Municipal among them, at a current annual cost of more than $181.6 million.
With federal lawmakers driven to cut costs because of the massive budget deficit, Congress on April 1 passed House Bill 658, a funding reauthorization for the Federal Aviation Administration that would include eliminating by October 2013 EAS money for 110 of those airports. Only rural air services in Alaska and Hawaii would be subsidized.
The Senate passed its own FAA reauthorization bill, preserving EAS funding in the continental U.S. Representatives from both sides will try to hash out a compromise bill that may or may not include EAS funding, said Justin Harclerode, a spokesman for the House Transportation and Infrastructure Committee.
Right now, Great Lakes needs that money.
The Wyoming-based airline flies 19-passenger jets through Visalia Municipal. But each flight carries only five to six passengers, on average, Charles Howell IV, CEO, said last month.
Great Lakes officials estimated it would take in only about $1.03 million from ticket sales and cargo fees for the Visalia service this year. Its costs were expected to exceed $2.64 million – which is why the company requested the federal subsidy.
But the revenue estimates were based on flying 10,500 passengers a year between Visalia and L.A./Ontario International Airport. Last year, only about 4,800 passengers flew the airline along that route, Howell said.
Without the subsidy, it would seem that Great Lakes couldn’t afford to continue operating here.
But Howell and city officials have said the new routes to LAX and Las Vegas could dramatically increase passenger numbers here.
Many travelers here currently drive to airports in Bakersfield, Fresno, San Jose, San Francisco and Southern California to find cheaper flights and easier connections to other flights than they could flying out of Visalia.
Both LAX and Las Vegas are prime destination spots in their own rights that could draw more passengers. Adding to their appeal is that each offers more connecting flights than are available at the Ontario airport, Salomon said.
Visalia’s airport manager, Mario Cifuentez, said that before the Sept. 11, 2001, terrorist attacks, the airport here offered flights to Los Angeles, with no federal subsidies, and was on track to have served up to 30,000 passengers.
The attack, followed by resultant changes in airport security, reductions in commercial flights and the current bad economy have considerably reduced air travel numbers across the country.
Great Lakes did not comment, but Salomon said he believes the Las Vegas and LAX destinations could be strong draws to get more people flying to and from Visalia.
The current bad economy still could stifle travel for a while, Salomon said.
“At some point, it’s going to come back,” he said. And having an airport is a good thing from an economic perspective.
“We’re going to try to work with the community and market this, to make this a success,” he said.
“But if it doesn’t, we’ll go on,” he said – even if Great Lakes loses federal funding and pulls out.
It wouldn’t be as devastating to Visalia’s airport operations as some may think, he added.
“I think most people, when they think about an airport, they relate to it as a passenger on a commercial flight, but that’s not the only thing it can be used for,” Salomon said.
Cifuentez agreed, noting that only a small percentage of the estimated $1.61 million he anticipates Visalia Municipal will get in revenue this fiscal year would come from Great Lakes’ operation.
He estimated the airline will pay about $32,600 this year to rent the airport passenger terminal. About $4,500 of the $14,600 the airport is expected to get in landing fees will come from Great Lakes.
Most of those fees will be paid by FedEx and Ameriflight LLC, which flies cargo to and from Visalia for UPS.
And while the airport doesn’t charge landing fees for private planes and other general aviation aircraft – which most airfields also don’t charge – it does make money in other ways.
The biggest money maker is aviation fuel and oil sales, expected to total $954,000 this year.
Then there’s income from airport real estate.
Rental fees for hangars at Visalia Municipal are expected to total more than $282,000 this fiscal year.
And lease fees for land and buildings belonging to the airport – including the Valley Oaks Golf Course, a small office park, the site of the Comfort Suites hotel and about 300 acres of farmland – are expected to total more than $153,000.
This fiscal year, city officials project that the airport will incur more than $1.53 million in costs – $180,489 of which is slated to be paid to the city to cover its legal, administrative and other costs in helping run the airport – while operating revenue should total about $1.61 million.
That would leave an operating surplus – or profit – of more than $89,500 for the year. The city doesn’t directly provide funds for airport operations, and any surplus for the airport goes into a fund used only to cover airport operations, improvements and to provide matching funds for grants, city officials said.
Ken Stake, a private pilot who rents an airport hangar, said there are enough commercial and private aviation operations going on at Visalia Municipal that he has no doubt flight operations would continue there if a large passenger carrier wasn’t there.
Source: VISALIA TIMES-DELTA