For the past 11 months, Canadian airline Air Canada has carried passengers from Sacramento International Airport non-stop to Vancouver, British Columbia. On Oct. 25, the flights will end and Sacramento International Airport will be a little less “international.”
Still, that is not a wet blanket for staff at the airport—in a time when the airline industry is showing signs of hemorrhaging, Sacramento International Airport is soaring, expanding even.
While it might seem that the loss of Air Canada would cause alarm, airport staff report about a four percent decline in passenger activity. This is due to an increase in the passenger load on each flight—as airlines reduce their frequency of incoming and departing flights, the flights available become packed, offsetting loss.
According to Hardy Acree, director of the Sacramento County Airport System, planes leaving Sacramento International Airport have historically experienced load percentages in the “mid-70s.” That number has now jumped to around 80 percent full.
Acree believes that the airport’s proximity to the state Capitol and the diversity of the California economy saved the airport from the fate of many other airports.
“It has its own, distinct, independent market that is different from the Bay Area market,” he said.
Acree says other airports, such as the Oakland Metropolitan Airport, have fallen on tougher times.
For the month of April, the Oakland airport reported a 21 percent reduction in passenger emplacements from March, and missed its 2007 mark by 2.5 percent.
According to Acree, part of the problem Oakland is having is competition in the market. The Bay Area is served by two other airports, and airlines feel they can cut service to Oakland and still serve their clientele.
Acree also said that Oakland reported a large spike in passenger activity before December, which has since fallen off. Sacramento International airport did not suffer the same problem.
“We saw just steady, constant growth; we didn’t see the spikes,” Acree said.
Around 40 percent of Sacramento International Airport’s revenue comes from parking fees. Thirty percent comes from user fees paid by the airlines to use the airport’s facilities. Sacramento County owns all of the facilities in the airport, and airlines who wish to use the facilities must pay a use fee.
“They [the airlines] pay fees based on services that they use,” Acree said. “They use gates, they use ticket counters, they use hold rooms.”
Oh, Air Canada
While Sacramento International Airport seems immune to the problems facing the air travel industry at large, Air Canada was feeling the turbulence and had to bail.
In a press release dated June 30, Air Canada said the flights were being cut because of rising fuel costs.
Air Canada did not return requests for an interview.
Air Canada began the service in June of 2007 and flew twice daily from Sacramento to Vancouver during the summer, once daily during the winter.
“It’s a pity, but you can still get to Vancouver, you just have to stop now,” said Lorna Hannon, a Sacramento resident on her way to see her brother in Vancouver.
Hannon said her brother visits “all the time,” and he will now have to take an Alaska Airlines flight that connects to Portland, Ore. in order to reach Sacramento.
According to the most recent numbers released by Sacramento International Airport, 957 passengers took the Air Canada flights in April.
“It’s a great airline and a great product,” said Acree. “They’re the national flag carrier for Canada… I look forward to having them back.”
Air Canada contracts all of its ground services in Sacramento to US Airways. The reduction in flights will not cause any job loss in Sacramento.
Acree said the financial effect on the airport would be “almost negligible.”
Air Canada is not the only airline to encounter hard times. In recent months, both Southwest and American Airlines have announced cuts to their service in Sacramento.
Since the economic downturn in December, and the jump in the price of oil, airlines have been cutting back flights.
The airport has been able to weather the financial storm, according to Acree, for two main reasons: increased load factors on airplanes and the airport’s geographic location.
Clear for Takeoff
When airlines cut one or two flights, the airport can largely ignore the cost, because all airlines pay a flat rate to fly around 10 flights a day. Similarly, it sees no great revenue increase when one or two flights are added.
This allows the airport to move ahead with its master plan for construction, despite slight reduction in the number of flights. The current focus of the plan is the $1.27 billion construction of a new terminal B.
The new building is being funded mostly through bonds sold mostly to financial institutions and Wall Street bankers, but parking and use fees are also being upped to help pay for the new construction.
Acree expects the building to open at the end of 2011 or the beginning of 2012. Once the new terminal opens, the master plan calls for the construction of a new parking garage to serve the terminal, which will open in 2014.
The airport intends to continue its building project in the face of any economic hardship.
“I guess the world coming to an end tomorrow [would stop construction],” Acree said. “If the apocalypse is on the horizon that would cause us to abandon our plan.”
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