Empty seats at Salem Municipal Airport. (Troy Brynelson/Salem Reporter)
While the pandemic has upended the airline industry, it’s put Salem in a stronger position to attract commercial air service, which could be available as soon as next year.
Those are the central takeaways from an update from the Fly Salem Steering Committee, on its efforts to attract commercial air service to Oregon’s second-largest city.
The last commercial airliner to operate out of Salem’s Municipal Airport, also known as McNary Field, was Delta Air Lines. The company began flights out of Salem in 2007 and left 17 months later because of economic conditions. Since then, Fly Salem was formed by the Salem Area Chamber of Commerce, the Strategic Economic Development Corp, Travel Salem and others to bring commercial flights back.
“We believe the stars are aligning for us to secure commercial air service,” said Angie Onyewuchi, president and CEO of Travel Salem, said during the Zoom call on Thursday. “And believe it or not, our chances have greatly improved because of the pandemic.”
Jack Penning, managing partner at consulting company Volaire Aviation, said airlines have shuffled their networks as travel has dropped because of the pandemic. With some airlines now positioned to expand and capture rebounding travel demand, Salem could be poised to lure commercial air service, he said.
Last fall, air travel was at about 35% of peak demand in 2019, he said. But air travel rose to around 46% just before President’s Day, he said.
Flights are increasingly being booked in places where people are being vaccinated against Covid, and airlines have begun moving to places where there’s business, he explained. While airlines have cut over 730 routes geared toward business travel, they've added 194 new routes to accommodate leisure travel since the pandemic began, he said.
“What we're seeing is there's a massive pent-up demand,” he said. “And what airlines are doing is pulling down business markets to add service in leisure markets.”
While airlines have seen historic losses caused by the pandemic, Penning said two smaller airlines, SkyWest Airlines and Allegiant Air, nearly broke even. Those two are in an excellent position to grow as the pandemic subsides and squeeze out competitors, which could involve setting up shop in Salem, he said.
He said network airlines have been in retreat from the Portland airport, which lost 21 nonstop flights. Normally, airlines would be expected to sell 20 to 30 million seats on flights in Oregon in 2021, he said. But that forecast is now 15 million, he said.
A commercial service to Salem would replace 100 seats per day that would be lost anyway, he said.
“So we aren't trying to necessarily change habits,” Penning said. “We're not trying to pull people away from seats that would be in other airports. We're just trying to replace those seats in a more convenient place for a large proportion of the population.”
He said the small demand being generated right now is in markets with either outbound or inbound leisure travel. Domestic markets will recover faster than international travel, and Salem’s proximity to the coast, hiking and wine could attract visitors, he said.
Fly Salem’s targets for air service haven’t changed through the pandemic and include San Francisco, Denver and Seattle, said Penning. He said Fly Salem has been in talks with SkyWest and Allegiant pointing out to them the relatively low costs of operating in Salem.
Other cities in Oregon already have commercial air service, including Eugene, Medford, Redmond, Bend, Pendleton and North Bend.
But securing a commercial airline will cost money.
Commercial airlines require an upfront guarantee of over $1 million to cover losses that could occur during its initial years of operation in Salem. So far, Fly Salem has raised $700,000 from businesses and individuals, said Onyewuchi.
The city of Salem has submitted an application for a grant from the federal Small Community Air Service Grant Development Program, which Penning said could raise another $850,000.
While an airline could burn through the money quickly if there is weak demand, even generating up to10 flights per day would make the service viable, he said.
“I have no doubt our market can support the service,” he said.
The city will find out about the grant in the summer, and if other funds are successfully raised, service could begin spring or summer of 2022 to accommodate peak travel, he said.
Brent DeHart, owner of Salem Aviation Fueling, said Salem’s lack of a commercial airline carrier puts it at an economic disadvantage and some companies won’t locate to cities without the service. He said the project would advance if it was championed by a local political leader.
Onyewuchi said that Salem is the largest capital city in the U.S. without commercial air service. Securing the connection would be “like dropping a Fortune 500 company in the middle” of the region that could also boost tourism spending.
She pointed out that the money raised for the guarantee has come from businesses and individuals and not governments.
“It's going to take a village to make this happen,” she said.
CORRECTION: An earlier version of this article misstated the amount being applied for under the federal Small Community Air Service Grant Development Program.
Contact reporter Jake Thomas at 503-575-1251 or [email protected] or @jakethomas2009.
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