Port staff: Bellingham airport traffic likely to continue to decrease

For the first time in at least a decade, fewer people flew out of Bellingham International Airport than the year before, a change Port of Bellingham staff had not anticipated.

By the end of 2014, 537,961 people had flown out of the airport. That’s a 9.6 percent drop over 2013 and fewer people than flew out in 2012, according to data compiled by the port.

The unexpected decrease translated into the port getting $825,000 less revenue than it planned from the airport, which ended the year in the hole $1.98 million, according to a fourth quarter financial report given to the Port Commission Feb. 3.

“We did anticipate that our growth rate that we’ve experienced over the last 10 years was going to plateau at some point, maybe dip,” said Dan Zenk, director of aviation at the airport. “We just didn’t expect it to dip 10 percent in 2014.”

The airport is dependent on the success of the airlines that serve it, Zenk said, and Bellingham saw some of the impacts of nationwide mergers and reallocation of planes to other markets.

Bellingham lost four routes last year, including flights to Maui, Honolulu, San Diego, and Reno, Nev.

Staff members expect the number of passengers hopping flights from Bellingham will continue to decrease by as much as 10 to 12 percent this year.

One factor in the staff estimate: Frontier airlines has decided not to offer any flights out of Bellingham this year.

Frontier started offering seasonal nonstop service to Denver from May through September in 2012, and did so again in 2013 and 2014. But this year the airline decided its aircraft would be better served in a market on the East Coast, Zenk said.

Last year Frontier passengers accounted for 7,491 of the 537,961 people who flew out of Bellingham, or about 1.4 percent of the year’s departing passengers.

Another factor in the estimate has to do with the airport’s customers. Between about 52 and 55 percent of those flying from Bellingham are Canadian, and the rest are mostly from Whatcom, Skagit, and Snohomish counties.

“We believe the decline in the Canadian dollar has a direct impact on the number of people traveling through the airport,” Zenk said.

The loonie was sitting at about 80 cents compared to the U.S. dollar Friday, Feb. 13.

The airport charges a passenger facility fee for every person flying out . For every passenger, the port gets $4.39, which is helping pay back the airport’s nearly $32.5 million portion of revenue bonds the port issued in 2010 so the airport terminal could be expanded.

So far, the decline in the number of people flying out of the airport hasn’t prevented the port from being able to pay back the 20-year bonds.

“We’re still able to meet the debt service even though the (passengers) are lower, because we used some very conservative numbers for that issuance,” Zenk said.

Before issuing the bonds, an independent consultant helped the port predict how many passengers would fly out each year, Zenk wrote in an email to The Bellingham Herald. Their estimate for 2014 was 545,900 passengers.

“The port’s ability to pay back the bonds is not exclusively dependent upon the annual number of ... passengers,” Zenk wrote. “The overall net revenues from the airport is helping to pay off the entire airport’s portion of the revenue bond used for the Airport Terminal Expansion project.”

The airport’s net revenue for last year was $2.25 million, and does not include the money collected from the passenger fees, Zenk wrote.

Aside from closely managing revenue, expenses and capital projects at the airport, the port will continue to work with a marketing group that has helped bring flights to the airport in the past.

In August, the Port Commission approved a three-year contract with Forecast, Inc., a marketing group that brought airlines such as Allegiant and Frontier to the airport over the last decade.

“Some of the markets the airlines have decided to not serve are still in high demand,” Zenk said. “Plus, there’s the markets we have not served in the past that have high demand — for example, the East Coast. Forecast continues to work on the port’s behalf to try and market those routes to the airlines.”

Related stories from Bellingham Herald