A $38M annual boost forecast: Economist predicts hangar will have a big ripple effect

Nov. 3--It wasn't exactly a return to the era of Western Pacific Airlines, but Frontier Airlines' announcement Friday that it will build a maintenance hangar, hire hundreds and eventually start passenger service in Colorado Springs had civic leaders talking in tones they haven't used in a long time.

"One of the biggest economic development improvements in the last 10 years," is how Mike Kazmierski, president of the Colorado Springs Economic Development Corp., put it, addressing widespread con- cerns among business leaders about airline service.

It's a $38 million-a-year boost to the economy, said Fred Crowley of the Southern Colorado Economic Forum. Spending by the hangar's workers, he said, would create more than 500 jobs at retailers, car repair shops, hair salons and other businesses.

Mayor Lionel Rivera said it was "a great day for Colorado Springs, a day to celebrate."

Frontier said Friday it will build a maintenance hangar employing 225 at the Colorado Springs Airport and begin flights to Denver by late spring.

The Denver-based carrier likely will start serving the Springs with four or five daily flights on 78-seat regional jets and probably will expand to larger Airbus jets once the maintenance hangar opens by late 2009, Frontier President Sean Menke said after the announcement.

Frontier could eventually expand its Colorado Springs service to include nonstop flights to other cities, depending on local travel demand and opportunities available elsewhere to the carrier, Menke said during a news conference announcing the plans.

Kazmierski said he hopes Frontier eventually will serve cities from the Springs that have significant economic ties to the city but no nonstop service, such as New York, Washington, D.C., and San Jose, Calif.

Colorado Springs' options for air travel were sharply reduced in 1997, when Western Pacific moved to Denver, then shut down eight months later. For a couple of years, the carrier turned the Springs airport into the nation's fastest-growing.

Born and headquartered in the Springs, WestPac earned an enthusiastic following with its discount fares, direct service that bypassed Denver, its informal style and wacky "mystery fares" promotions. But mounting losses led to a boardroom revolt, bankruptcy protection, the move to Denver and a shutdown in 1998.

On Friday, Rivera said Frontier's arrival in the Springs fulfills his January 2003 campaign pledge to bring a low-fare airline to the city.

"Today is the day I feel that the promise has been kept," Rivera said after the news conference. "People assumed I meant Southwest (Airlines), but this is a better win for the community because Frontier is a Colorado company and is making a long-term commitment."

Frontier's expansion to the Springs should force local air fares lower by increasing competition for Springs passengers, said Andrew Goetz, a Denver University geography professor who also works with the school's Intermodal Transportation Institute.

The airline selected the Springs over Denver International Airport for the hangar because it offered "the best combination of incentives, financial support and proximity to our Denver hub," Menke said. "The Colorado Springs opportunity was a better financial fit for our needs."

The city will rebate its business personal property taxes on equipment in the hangar and will exempt aircraft parts bought by Frontier from its sales tax, saving Frontier an estimated $300,000 a year. The city will also issue tax-exempt bonds to finance the hangar it will lease to Frontier for 30 years.

"The economic impact of this announcement far exceeds the (cost of the) incentive package," Kazmierski said.

Utah-based SkyWest Airlines accepted similar, but less generous, incentives to build a maintenance hangar at the airport that opened in August and employs 90. Sky-West will get the same terms as Frontier once Frontier's hangar opens, said Mark Earle, the city's aviation director.

The incentives used to attract both the Frontier and SkyWest maintenance operations also are available to other carriers and offer "a great opportunity for airlines to do this type of activity in Colorado Springs," Rivera said. "I don't think that DIA can match us."

Frontier's hangar is scheduled to be built on 11 acres near the south end of the airport's west runway near hangars owned by JHW Investment Co., Earle said.

The carrier now leases a hangar at DIA from Continental Airlines on a month-tomonth basis for its maintenance facility.

Employees at that facility will be given the chance to move to Colorado Springs, and Frontier will pay relocation costs, Menke said.

Although Frontier began looking at building its own maintenance hangar in 2000, the airline shelved those plans after the Sept. 11, 2001, attacks, Menke said.

The carrier resumed the search about a year ago and sought bids from the Springs, DIA and five other airports.

Frontier narrowed its choices to Denver and the Springs last month and Denver officials worked "aggressively to keep our maintenance base in Denver," including an offer to cap sales tax Frontier now pays to Denver on aircraft parts purchases, Menke said.

Denver Mayor John Hickenlooper said in a statement released Friday that he was "disappointed" Frontier's hangar won't remain at DIA.

He said the city put together "the most fair and competitive proposal we could but lost to another great Colorado city."

DIA Aviation Manager Turner West said the proposal was "both competitive and fair without compromising the airport's or the city's budget."

Mike Boyd, an Evergreenbased airline industry consultant, said Springs officials should "send a thank you note to Mayor Hickenlooper. This was Denver's to lose."

CONTACT THE WRITER: 636-0234 or wayneh@gazette.com

SO YOU WANT TO FLY ON FRONTIER FROM SPRINGS?

Question: I want to start flying Frontier Airlines from Colorado Springs. How soon can I do that?

Answer: Frontier plans to begin flights between the Springs and Denver in late spring. Details on fares, how many flights and what type of aircraft aren't yet available.

Q: What cities will Frontier serve from Colorado Springs?

A: Initially, the carrier will only fly to Denver, but CEO Sean Menke said Frontier would later consider nonstop flights to other cities.

Q: Will Frontier's presence in Colorado Springs make it less expensive to fly from here?

A: Andrew Goetz of Denver University's Intermodal Transportation Institute said Frontier will boost competition that will push down fares.

AISLE OR WINDOW?

Four or five daily flights on 78-seat jets should start by late spring. Bigger planes and other destinations could follow in years to come.

To see more of The Gazette, or to subscribe to the newspaper, go to http://www.gazette.com. Copyright (c) 2007, The Gazette, Colorado Springs, Colo. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.


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