PORT ANGELES — Kenmore Air may leave Port Angeles if the company doesn’t break even in 2009, said the firm’s marketing director.
The Port Angeles City Council will consider on Tuesday how the city can help keep passenger-flight service at William R. Fairchild International Airport on the west side of town.
Craig O’Neil, Kenmore Air marketing director, said that the Kenmore-based company has lost hundreds of thousands of dollars since June 2004 when it began flying between Port Angeles and Boeing Field in Seattle — providing free shuttle service between there and to Seattle-Tacoma International Airport.
“The problem is, last year we ended up in the red” in Port Angeles, he said.
The company hasn’t made money on flights to Port Angeles in any year since 2004, O’Neil said.
O’Neil said that Kenmore Air is not considering a raise in airfare.
$10,000 question
The City Council will consider allocating $10,000 in city lodging tax revenue to be used on a yet-to-be-determined plan to attract more passengers to fly with Kenmore Air, the sole provider of non-chartered air service to and from Port Angeles.
Karen Rogers, chairwoman of the city’s lodging tax advisory committee and Port Angeles City Council member, said that, although a plan on how to use the money hasn’t been determined, it could go toward a marketing grant that Kenmore Air would be eligible to receive.
It would not go directly to the company, she said, adding that the city’s intent is to maintain air service to Port Angeles.
“This is not about an incumbent air carrier that happens to be Kenmore, it’s about maintaining passenger service for the general area of Port Angeles and Sequim and Forks, frankly,” Rogers said on Saturday.
Kenmore took over the role of providing flight service in and out of Port Angeles after Horizon Air, citing low ridership and annual losses of $1.5 million, ended its Port Angeles service in January 2004.
O’Neil said the company wants to maintain its service because it believes flights to the airport will become profitable in the long run.
But O’Neil said that Kenmore Air isn’t making as much money on its other flights as it once did because of the national economic downturn, and that company officials don’t think the firm can continue to subsidize its flights between Port Angeles and Seattle after this year.
The company as a whole is not in danger of collapsing, he said.
No deadline for decision
O’Neil said the company has no deadline for making a decision about pulling out.
“If we end up a little shy, I’m not saying absolutely we will fold it up and go home,” he said.
“If we don’t see some progress, with possibility in reach, as in every business, we have to start making decisions that make sense for us.”
Despite an expected bump in passengers during a planned six-week closure of the Hood Canal bridge that will begin May 1, the company expects to have about the same number of passengers on its Port Angeles route in 2009 as it did in 2008, O’Neil said.
In 2008, 23,500 passengers flew the route. The company needs 27,500 passengers annually to maintain service in the long-term, according to a city staff memo to the City Council.
Kenmore’s woes were aired at a stakehold meeting hosted by the Port of Port Angeles in December, the memo said.
The City Council’s community and economic development sub-committee decided on Jan. 28 to recommend to the lodging tax advisory committee that $10,000 be allocated to help Kenmore.
The advisory committee decided at a meeting on Wednesday to recommend the allocation to the City Council.
The hope is that the airline needs help for only 2009, according to the memo.
O’Neil said Kenmore Air is hoping that an agreement with Alaska Airlines will put its Port Angeles operation into the black.
The agreement will allow passengers to book transfer flights on Kenmore Air with Alaska Airlines.
O’Neil said that service should be available by May.
The agreement also involves Alaska Airlines advertising transfer flights with Kenmore Air to other regions, he said.
Lodging tax money
The city’s lodging tax revenue comes from a 4 percent room tax on hotels, motels, and bed and breakfast establishments.
According to state law, the money can be spent only on tourism infrastructure or to promote events and projects with the goal of attracting people to Port Angeles from outside Clallam County to visit and, preferably, stay overnight.
The city’s Lodging Tax committee has already awarded $75,000 to the chamber to award in grants to festivals and other events.
Rogers said that she envisioned the $10,000 grant that the council willdiscuss on Tuesday being administered through the Port Angeles Regional Chamber of Commerce.
Kenmore Air could apply for the grant, with a written plan on how it would use the money to attract people to travel to Port Angeles.
O’Neil said Kenmore Air has spent tens of thousands of dollars a year on marketing its flights to Port Angeles.
He said Kenmore Air did not ask for any money from the city.
Bob McChesney, Port of Port Angeles executive director, said the port waived landing fees for Kenmore Air, which it will continue to do, to try to lower their costs.
The fees add up to about $20,000 a year, he said.
Since December, the port has been asking Port Angeles and Clallam County governments for additional support for Kenmore Air.
“Kenmore is a critically important carrier that services the whole community,” McChesney said.
“We’ve been out there trying to help them any way we can.
“We [the port] can help to a certain extent on the cost side. Really the issue has to be development on the revenue side.”
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Reporter Tom Callis can be reached at 360-417-3532 or at tom.callis@peninsuladailynews.com.
