Aviation Poised to Soar in Denver

The Denver area already is known as a hub for energy, aerospace, data storage and software companies.

Aviation might be next.

Local economic development officials say they are considering actively recruiting aviation companies to foster what could become a red-hot industry in Denver.

Such a move would elevate aviation into a pantheon of potentially high-growth industries that economic development officials target to bring new jobs to the region.

Future growth areas could include aircraft production, maintenance, airport support and commercial air service.

"The aviation industry is maturing now and may be nearing a critical mass" of jobs, said Tom Clark, president of the Metro Denver Economic Development Corp., a private-public nonprofit organization that works to bring companies to the area.

"We haven't been actively recruiting this industry, but it might be time to start."

Clark's office focuses its recruiting efforts on five industries: aerospace, biotech/medical devices, energy, financial services and information technology/software.

It works to retain, rather than recruit, jobs in four others - aviation, information technology/hardware, beverage production and broadcast/telecommunications. Those industries have a strong base here but aren't projected to grow much.

The local aviation industry, though, has evolved in the past few years.

After dropping off sharply in the years following the Sept. 11, 2001, terrorist attacks, aviation jobs are rebounding.

The industry now employs 14,200 workers in the metro area, down from 15,500 in 2000 but up 9.2 percent in the past year, according to Development Research Partners, a local economic development research company.

Denver also ranks ninth among the 50 largest metro areas in terms of aviation employment.

Denver International Airport is fueling some of that growth amid a blowout year that has put it on pace to crush its previous passenger record.

That's creating more opportunities for airlines and related businesses, creating local jobs.

"In Denver International Airport we have an important competitive advantage that gets more valuable every year," said John Huggins, Denver's economic development director.

"It will shortly pass a tipping point where other major airports, as they expand, will have higher total debt yet still won't be as efficient as our airport. DIA then becomes a more attractive magnet for aviation business."

Commercial airlines have been growing, led by Denver-based Frontier Airlines and, more recently, United Airlines. Frontier has been adding flights, routes and workers as it captures more market share in Denver.

United Airlines, which fought through bankruptcy for 38 months, is expanding its presence here again after years of cutbacks.

And Southwest Airlines, a new entrant in Denver, has tripled its service since starting here.

"With the success of Southwest, the growth of Frontier and United's balance sheet solidifying, we're feeling better about commercial carriers," said Patty Silverstein, an economist at Development Research Partners, which conducted a study for the metro economic development office detailing the city's economic "clusters."

"We're almost at the point where we will really feel like this is a growth industry," Silverstein said.

"There could perhaps be some additional bumps in the road, but it's on the cusp right now."

A new segment of the aviation industry has sprouted as well, creating opportunities for the metro area's three general aviation airports.

Two locally based companies - Adam Aircraft Industries Inc. and Aviation Technology Group - are building lightweight, low-cost jets.

The upstarts are nearing mass production and could be at the forefront of a new era in air travel.

"It's not a regurgitation of existing aircraft but a whole new way of manufacturing airplanes at a much lower entry cost than what was traditionally the case," said Robert Olislagers, executive director of Centennial Airport, which is where Adam Aircraft is based. "That's what makes it exciting."

Colorado has had mixed success in luring - and keeping - aviation businesses here. Adam Aircraft recently decided to locate its manufacturing and assembly plants in Ogden, Utah, saying Colorado just wasn't competitive in terms of economic incentives.

But state lawmakers last year approved legislation allowing airports to offer up to $2 million in annual tax breaks to aircraft-manufacturing companies. That helped sway ATG to open its manufacturing facility in the Denver area.

The state still lags other areas in what it can offer.

Two small upstart aviation companies recently decided to relocate from the Colorado Springs area to Laramie, reportedly because it was offered a much better incentive package.

INFOBOX

Taking flight: The metro area's aviation industry growing steadily

* Denver International Airport: Passenger traffic up 10.4 percent this year, on pace to smash record set in 2005. Building a new regional jet facility on Concourse B; considering adding up to eight more gates on C concourse.

* United Airlines: After shrinking presence in Denver as it fought through bankruptcy, carrier is now adding routes and flights.

* Frontier Airlines: Denver-based carrier has increased capacity by 60 percent in past three years while more than doubling its work force, with further expansion in the pipeline.

* Southwest Airlines: Nearly tripled service here since launching flights at DIA in January. Has indicated more growth in near future.

* Adam Aircraft: Arapahoe County-based company set to ramp up production of its A500 propeller plane and finish development of its new A700 lightweight aircraft. Doubled staff in the past 18 months; recently received $93 million in venture capital.

* Aviation Technology Group: Arapahoe County-based company will produce two-seat jets at Front Range Airport, creating 150 high-paying jobs and possibly up to 500 in the future.



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