How Seattle Won Air France

When Sea-Tac Airport and Air France last week announced the coming debut of a nonstop air route between the Puget Sound area and Paris, the agreement was the fruit of more than a decade of the airport's lobbying and sales efforts.

The opening of a foreign route is a big decision for an airline and a major coup for the airport. Successfully developing that route can require the expenditure of millions of dollars in marketing and operational funds. But a well-traveled route can be a major income source for an airline and a plus for the region that depends on good connections with the rest of the world to attract and keep businesses.

The News Tribune talked with Mark Reis, Sea-Tac's aviation director, about what's involved in winning such a route and the airport's ambitions for other overseas connections.

What does the Air France announcement mean to Sea-Tac and the Puget Sound area?

You can talk to people who do quantitative analyses and they recite some very, very large numbers. But in a more practical way, it means much better connections for travelers from this area. I remember coming back from a marketing trip to Paris and connecting in Detroit to get back here. I left Paris about 1:20 p.m. and got back here sometime about 8 or 9. This flight will leave at 1:20 and get here about 2:30. So that's about a six-hour or so difference.

What kinds of incentives did you offer to get Air France to commit?

We have two primary kinds of incentives, the costs of our landing fees and what we call FIS, the charges we impose on the airlines whose passengers use the part of the airport that houses the customs and inspection operations. For the first year, we forgive the carrier flying to a trans-Pacific or trans-Atlantic destination not currently being served nonstop from here 100 percent of the landing fees and 75 percent of the landing fees the second year. We forgive 75 percent of our FIS charges in both the first and second years. It's important to recognize that there's still a net gain for us because we're still charging them other fees we don't currently get. They will still pay ticket counter costs, gate costs and ramp tower costs and other things. In addition we provide a marketing assistance fund. I think it's about $250,000 the first year and less the second and it drops over time.

But aren't you undercutting the business of the other three carriers (British Airways to London, SAS to Copenhagen and Northwest to Amsterdam) that provide nonstop service from here to Europe and pay the full fees?

We look at this very seriously because we consider the success of our existing customers. If we thought that we would make one of our existing carriers unprofitable by pursuing Air France aggressively, we wouldn't have been pushing it. We formerly didn't offer incentives. The fact of the matter is that we're fairly late to the game. Our competitors have been doing this for years. But potential new carriers told us this was important, so we adopted incentives. The last time we attracted a new carrier to Europe was in 1998 when Northwest began flying from here to Amsterdam. At the time we had British Airways with one flight a day and SAS with one flight a day to Copenhagen. There was a one-year dip in SAS travel out of Seattle as a result of the new Northwest flight. But the next year it went right back up almost at the same growth rate as before.

If not from the existing nonstop carriers, where will Air France customers come from?

I don't think that over time you'll see a huge effect on those other carriers directly from here to Europe. What you will see is fewer people connecting at hubs here in the United States. A business traveler nowadays going to Paris from here has two choices: take one of the nonstops from here to a hub in Europe or connect through one of the other hubs in the United States, JFK, Dallas, Detroit or Atlanta, et cetera. More than half of the people traveling to Europe from here now connect in another U.S. hub. Air France has a route network in Europe that is different from the networks offered by the other carriers flying to Europe from here, especially in southern Europe or Eastern Europe. That will provide people with better connections than they have now.

Over the last decades a number of foreign carriers such as Finnair, Thai Airways, Aeroflot, Mexicana, JAL and China Eastern have come and gone from Sea-Tac. Why did they leave? Why will new carriers come here and stay?

There are a couple of things that are in play here. Some of that has to do with the technology. If you were crossing the Pacific, you'd have to land in someplace like Seattle, Los Angeles, Vancouver or San Francisco. If you were going to Chicago from Bangkok, you couldn't get there from there. The aircraft didn't have the range. So you had to go to the U.S. West Coast and pick up a domestic carrier from there. That's no longer true. Seattle benefited for a while, but now, with longer-range planes, if there is enough traffic from a city in the interior, an airline will route a plane there directly, bypassing the coastal cities. But with the coming of such planes as the new Boeing 787, a middle-sized plane with the range to reach anywhere in the world, airlines are looking at flying more point-to-point nonstop flights, and Seattle will benefit from that new technology.

What new routes are on Sea-Tac's want list?

We look at this from the perspective of what cities have a great deal of traffic that are not served nonstop out of Seattle. That's how we evaluate our targets. High on that list in Asia are Bejing in China, Hong Kong and Singapore. In the Philippines, Manila is high on the list. So we're in conversations with several airlines about each of those cities. I would not be surprised if there were some additional trans-Pacific service within the year.



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