March 04--SAN BERNARDINO -- The newly completed $20.5 million international terminal at San Bernardino International Airport faces an uphill battle to lure carriers away from more established air transport centers, two airline analysts say.
"What market niche are they (SBIA) trying to fill?" said John J. Keady, president of Playa del Ray-based Keady Transportation Consulting, noting that from his perspective, there is no "unseen latent groundswell of demand" that the new terminal will serve.
This trend transcends Southern California.
"Airports in Minneapolis and Detroit are worried about losing business to Chicago," said John D. Kasarda, director of the Kenan Institute's Center for Air Commerce at the University of North Carolina.
Local officials acknowledge the challenges, but after years of a shattered economy in the Inland Empire, it's time to build with a vision and hope they will come, they said.
"That is the challenge coming out of the woodwork," said San Bernardino Mayor Pat Morris. "What we have to offer is a new articulation...with a state-of -the-art, high-tech terminal. This has to be attractive to international carriers as an end destination," he said.
And that means playing off the busy-ness of the major metropolitan hubs.
"LAX is congested to the extreme," Morris said. "Passengers there stand in line waiting for hours to get through customs. We present the opportunity to quickly move them through the customs process."
SBIA's move into the international passenger flight market comes at a time when Ontario officials are trying to wrestle control of LA/Ontario International Airport from the Los Angeles World Airports (LAWA) to the locally controlled Ontario International Airport Authority, a joint-powers agreement between Ontario and San Bernardino County.
Ontario's airport has lost about 40 percent of its passenger traffic since 2008.
"The history of the Ontario Airport has always been one of an international airport," said Jim Bowman, an Ontario councilman and OIAA board member.
When -- and if -- Ontario is broken off from LAWA, Bowman said land around the airport can be developed and part of those revenues can be used "to underwrite landing fees" at Ontario.
"With fees driven down, we can drive those carriers back in droves," he said.
"It is a big region. We wish them the best," Bowman said of San Bernardino's efforts.
Morris also spoke of using low landing fees and other price discounts as key to the SBIA marketing strategy.
However, Keady and Kasarda both say that airline operators and freight forwarders look at more than price comparisons when making location decisions.
"There is something else at work," Kasarda said. "That is the economies of scale and scope that the hubs have. There are also subtle advantages."
Kasarda has done some consulting work for Hillwood, the Dallas-based company that is the master developer for Inland Valley Development Agency property, which comprises the former Norton Air Force Base land surrounding SBIA. Freight forwarders like to operate in large hubs, Kasarda said, because they know if their anticipated cargo arrives late and misses its scheduled flight, they can quickly find another carrier.
The hubs provide the same flexibility to the passenger side of the business, the two airline experts said.
Additionally, airlines like the possibility of getting business from others if passengers miss their flights or when equipment problems force cancellations, the two experts said.
"Airlines see the models and the math of the savings (with smaller airports), but they don't bite because of the subtle advantages in the large ones," Kassarda said.
Morris said that SBIA lost out on an opportunity with an international carrier to John Wayne International Airport, because there was no place ready in San Bernardino.
Morris said that the San Bernardino area has the "largest amalgamation" of hispanic residents in Southern California, outside of Los Angeles.
Lucy Dunn, president and CEO of the Orange County Business Council, said that while John Wayne airport is "her favorite", it has short runways and a cap on capacity.
"It is not likely to have flights from Paris or Dubai," she said, but ONT could handle them with two runways, one 12,200 feet long, the other 10,200 feet.
She said she is not very familiar with SBIA, which has one runway, 10,000 feet long.
Dunn is Orange County's representative on the OIAA board.
Keady said the limitation of one runway is only an issue at very busy airports. A larger problem for SBIA is that commercial planes approaching it would have to "tread their way through the Ontario and LAX air traffic control maze."
Keady, who has an MBA from Harvard, was a former manager of marketing development for American Airlines.
Currently ONT has international flight service to Guadalajara with Aeromexico and in April, Volaris will initiate service to Guadalajara as well.
SBIA has no regularly scheduled commercial flights.
Staff writer Ryan Hagen contributed to this report.
Copyright 2014 - San Bernardino County Sun, Calif.
