Port of Port Angeles: ‘We will search for another air carrier’

By Paul Gottlieb, November 1, 2014, Peninsula Daily News

Kenmore Air Express will stop providing the only scheduled commercial air passenger service on the North Olympic Peninsula on Nov. 15.

 

Kenmore flies small planes, usually the Cessna Grand Caravan holding up to nine passengers, between William R. Fairchild International Airport in Port Angeles and Boeing Field in Seattle, and shuttles riders to and from Seattle-Tacoma International Airport.

 

Years of declining ridership and increasing costs have taken their toll, company President Todd Banks said Friday.

 

“We are stopping,” Banks said in an interview Friday. “We are not going to operate a scheduled service out there.’

 

Banks said in a news release that “the decision was reached with great difficulty.

 

“We have worked very hard for more than 10 years to establish an economically viable route between Seattle and Port Angeles.

 

“But despite our best efforts, we have been unable to sustain sufficient passenger volumes at sufficient fares to adequately cover our costs in the market.”

 

The last flight listed on Kenmore’s schedule on its website at www.kenmoreair.com is Flight 5141, leaving Port Angeles on Nov. 14 at 1:30 p.m. and reaching Boeing Field at 2:25 p.m.

 

Kenmore will give full refunds to passengers with reservations to fly after that date and passengers with unused QuickTix discount flight coupons, it said in the news release.

 

Questions can be addressed by calling 866-435-9524.

 

No replacement service is in the works, although Port of Port Angeles commissioners — the port owns the airport — will seek one.

 

“We will search for another carrier,” said John Calhoun, port commission vice president, on Friday.

 

“We definitely want to keep a scheduled airline at the airport.

 

“We want to provide the environment and opportunity for economic development, and a full-service airport is certainly a key element in that economic environment, just like schools are.

 

“When we lose a key element, like scheduled airline service, we’re diminished.

 

“It’s a blow to the community’s infrastructure of services.”

 

Calhoun said the airport is in no danger of closing, as a charter service, Rite Bros. Aviation, and private pilots operate out of the facility.

 

Kenmore’s departure will be discussed at the port commission’s next regular meeting at 9 a.m. Nov. 13.

 

Port Executive Director Ken O’Hollaren said he was not aware of any other carriers who want to take Kenmore’s place.

 

Calhoun and O’Hollaren said port officials also will try to induce Kenmore to continue to provide service.

 

One idea that’s been floated: the community subsidizing the company by buying a guaranteed number of tickets.

 

But Banks doesn’t see the company resuming Peninsula service anytime soon.

 

The company also serves Victoria and the San Juan Islands, along with Nanaimo and inside-passage islands in British Columbia.

 

“We are not able to achieve sufficient passenger volume at the fares we need to get to make the business work,” Banks said.

 

“The business conditions are just not there right now.”

 

Ridership has declined every month compared with the same month the previous year since 2009, according to port records.

 

Emplanements — the combination of passengers getting off and getting on flights — totaled 673 in September.

 

In September 2013, they were 831.

 

In September 2009, when Kenmore offered more flights, they totaled 1,982 — three times more than this September.

 

Rising fuel prices increased expenses.

 

Jerry Ludke, the port’s airport and marina manager, said that in 2004, fuel was $1.90 a gallon.

 

Now it’s more than $4 a gallon.

 

As fuel prices have increased, the company has raised its rates, Banks said — a tactic that seemed to have backfired.

 

“Every time we’ve raised our rates, it seems like passenger traffic steps back also,” he said.

 

The company began serving the Peninsula in 2004 after taking over from Horizon Air, which stopped service after concluding, like Kenmore, that the route was not profitable.

 

At the time, Horizon cited annual losses of $1.5 million.

 

Kenmore, which pays $724-a-month rent at the airport, has been losing money since at least 2008, Banks said, though he would not say how much.

 

At one time, Kenmore, headquartered north of Seattle on Lake Washington, operated six round trips daily.

 

That was cut to five and then — on June 1, 2011 — to three.

 

Service was cut to two round trips a day this summer, and Banks told the Peninsula Daily News on Aug. 4 that the company planned to re-evaluate its operations in the fall.

 

In an effort to keep Kenmore in Port Angeles, the port has waived landing fees since 2008, costing the port — and saving Kenmore — about $105,000 since then, Ludke said.

 

The port also obtained a $400,000 federal Small Community Air Service Development Grant in 2010 to pay for advertising and promotion of commercial passenger service targeted to help Kenmore, Ludke said.

 

It was 90 percent funded by the Federal Aviation Administration, with the remaining 10 percent funded by the port, Port Angeles, Sequim and Clallam County.

 

“It didn’t really help move the needle up as far as enplanements,” Ludke said.

 

“Maybe it helped them stay a year longer than they have.

 

“I’m not certain what we can do.”

 

Kenmore’s decision seemed to be in the works for a while, said Russ Veenema, Port Angeles Regional Chamber of Commerce executive director.

 

“I would say it’s not a big surprise to the people here,” he said.

 

“This has been happening in a slow motion over the past probably six or seven years, and we as a community have been working very hard to try to help Kenmore stay viable, but it was just getting more and more difficult, and we could all see that.”

 

The lack of commercial, scheduled airline passenger service will make it harder for real estate agents to sell the area to new residents, he added.

 

Port and Kenmore officials met at the company’s corporate offices Sept. 22, Ludke said.

 

O’Hollaren said company officials made port officials aware of the most recent economic challenges Kenmore was facing.

 

The change in rates over the years helps illustrate those challenges.

 

Ludke recalled several years ago when some tickets cost $49 on Kenmore and prices were reduced by co-pay arrangements with a passenger’s connecting airline.

 

A round-trip flight leaving Fairchild this Friday and returning Nov. 10 will cost between $175.10 and $233.20.

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