How San Diego International Went From ‘little airport’ to Global Stop
Speaking last month at a downtown luncheon celebrating San Diego’s first nonstop flight to Switzerland, the outgoing airport CEO took the opportunity to applaud her soon-to-be-former employer — “the little airport that could,” she called it.
A decade ago, when the San Diego International Airport did not have a single overseas nonstop, Thella Bowens might not have made the same boast.
Starting this summer, the number of overseas cities with nonstop flights will climb to four — London, Tokyo, Frankfurt and Zurich, with aspirations for still more in the near term.
Domestically, the airport has also made significant inroads, landing more than 30 nonstop flights over the last five years, as carriers have looked to San Diego to raise their profile in California.
While San Diego is not — and never will be — on a par with West Coast hubs like San Francisco and Los Angeles, that hasn’t deterred local airport and tourism officials from doggedly courting air carriers in hopes of significantly widening options for both leisure and business travelers.
“San Diego is not just a growing market but a growing upscale market,” observed Henry Harveldt, an airline industry analyst with Atmosphere Research Group. “It’s a great year-round destination, and it also has an increasingly diversified business environment, with a growing technology sector, manufacturing, military, healthcare and other services.
“So the city has become that much more desirable, and the introduction of new-generation, fuel-efficient airplanes is perfect for an airport like San Diego’s.”
So is its timing. Air travel remains on an upward trajectory, with a record 823 million passengers flying on U.S. airlines in 2016, up 3 percent from the previous record high of 798.2 million in 2015. San Diego’s Lindbergh Field also is seeing record numbers, with more than 20.6 million passengers flying into and out of the airport last year.
Globally, the airport has high ambitions for more direct flights — Latin America, China, more European destinations — but the expansion will likely come more slowly as airlines weigh competing routes and evaluate whether they even have enough aircraft to support added service.
Recent growth in domestic nonstops has been much more fast-paced, especially as Alaska Airlines has moved aggressively to gain a stronger foothold in California. While it’s not likely to dislodge Southwest Airlines as Lindbergh Field’s dominant airline, Alaska has added some 20 nonstop flights over the last five years, both to new destinations and under-served cities.
It’s also planning to debut later this year San Diego’s only nonstop flight to Mexico City.
“Southwest saw Alaska’s acquisition of Virgin America, so they’re seeing they have to expand their repertoire to make sure they’re not out of the game in San Diego,” said Hampton Brown, who oversees air service development for the airport. “So they’re adding new routes and bolstering existing routes.”
San Diego has proven to be an important market in leisure and business travel for Alaska, and that’s not likely to change, said Ben Brookman, the airline’s director of network planning.
“We know, for example, a lot of people in San Diego like to do their vacations in Puerto Vallarta, and Cabo, and historically that had been our niche,”Brookman said. “Starting in 2011 and 2012 we broadened our market to include more business-oriented destinations like Boston where we have seen a really good response, and that drove our more recent decisions to go to and from the Midwest.
“It’s about being a more complete airline for those people. People who do business in Omaha also want to take their family on vacation in Hawaii.”
In the hyper competitive air service arena, nabbing overseas flights can be a lot more challenging — and costly. For example, British Airways and Japan Airlines received $1.5 million in marketing support from the airport for nonstop flights to London and Tokyo, in addition to waived and discounted landing fees valued at more than $840,000.
Similarly, Condor Airlines’ soon-to-debut nonstop between San Diego and Frankfurt, cost the San Diego airport $112,500 in marketing incentives, plus a 50 percent rebate of landing fees. Edelweiss, which will be flying twice weekly round trips to Zurich starting June 9, received the same landing fee rebate, plus $85,000 to help promote the flight.
“Getting air service is not typically a case of where airports sit back and airlines show up at their door with new service,” said Angela Payne, interim Airport Authority CEO and vice president of operations. “So we will put together presentations to share with the air carriers saying, for example, we have a large business sector that is doing travel to a particular region and we will share that data with the carriers.
“Getting international flights may have been more of a challenge years ago, but this industry has evolved dramatically. As an example, I’m sure Edelweiss looked at how strong the British Airways numbers were to London before they made the decision to come into San Diego.”
The small Swiss leisure airline, which is gradually expanding its operations to the U.S. (it currently flies only to Las Vegas and Tampa), is already planning to lengthen the duration of its seasonal San Diego flight. Where this year the nonstop route will start in June and end in September, in 2018 the flights will be available between April and November, airline CEO Bernd Bauer said last month.
One airline that will be paying close attention to the performance of the Frankfurt and Zurich flights is Lufthansa, parent company of Edelweiss.
“San Diego has always been attractive enough of a destination to be of interest to the Lufthansa Group, and it is still being monitored,” said Martina Hupach, the company’s regional sales manager. “The challenge is whether there is aircraft availability and is there enough business out of this area to make a flight profitable. Do you want to risk it or go to other destinations that have less risk?”
While international flights still represent a very small fraction of total passenger volume in and out of Lindbergh Field, international passenger traffic has soared 184 percent since 2010 — a year before the debut of the London flight and almost three years before the Tokyo nonstop.
San Diego’s biotech community, for one, has come to embrace the Japan Airlines flight and even credits it, in part, with helping raise the region’s profile as a major biotech hub.
“Between the time the flight initiated and today, we have brought 50 companies from Japan into our membership and opened an office in Tokyo,” said Joe Panetta, president of Biocom, a life science trade group based in San Diego. “We’ve made a big effort to create more visibility about what’s happening in biotech but that’s been facilitated by the fact we have nonstop flights that make it easier for Japanese business people to come here to San Diego.”
David Enloe CEO of biotech drug manufacturer Althea in San Diego, said the Tokyo flight has been invaluable for the executives coming here from the Japan-based company that purchased Althea four years ago. He said he was pleased to hear about the Edelweiss flight, given that so many major pharmaceutical companies are located near Zurich.
Still, San Diego’s connectivity across the U.S. and globe could be better, Enlowe admits.
“I moved here three years ago from Houston, which is an airport hub, and the single most difficult transition I have had to make living here is the fact that I don’t have the same level of access to nonstop flights to either Asia or Europe or even smaller cities in the U.S.,” Enlowe said.
He’s quick to add, though, that the Airport Authority’s sizable investment in upgrading the airport terminals and a new parking structure, in addition to its progress in expanding domestic and international routes, has “made it easier to do my job.”
A continued strong economy, especially in the travel sector, means there are likely many more nonstop flights in San Diego’s future, even for a single-runway airport like Lindbergh Field.
Recent additions like seasonal nonstops to Indianapolis and Spokane could eventually become year-round, says Hampton Brown, who also has set his sights on Norfolk, Virginia; Tampa and Raleigh-Durham.
Brown’s top priority, though, is Reagan National, the airfield closest to the nation’s capital. But for now that’s in a holding pattern, because the federal government controls how many limited slots are allowed for daily flights.
More ambitious are the airport’s efforts to secure additional flights outside the U.S. — destinations like Panama and San Salvador in Central America; more Western European cities such as Paris, Amsterdam, Frankfurt and Munich; and New Zealand and Australia.
California is China’s top overseas market for visiting and spending and for San Diego it’s the second largest overseas market, just behind the United Kingdom.
“The growth forecast for Chinese visitation will blow your mind,” said Brown. “They’re very lucrative, so it’s prudent to invest in that market.”
With 124 weekly nonstop flights to China currently operating out of San Francisco, Los Angeles and San Jose, San Diego is clearly at a disadvantage, says San Diego Tourism Authority CEO Joe Terzi.
He is so convinced of the bonanza a Beijing or Shanghai nonstop would bring the region that he recently asked the hotelier-run Tourism Marketing District for $1 million to help market San Diego in China as a must-see destination, beyond just a side trip from L.A.
“To get a flight we’ll have to pay, but before that we have to have more of a presence in China,” said Terzi, “so they understand why San Diego is different from L.A. or San Francisco.”
A China nonstop, though, could still be several years off because the treaty between San Diego and China governing the frequency of flights would need to be renegotiated, Brown said. More airport capacity out of Beijing also is needed, although a second airport is under construction.
“San Diego may want a nonstop to China but I wanted a puppy for Christmas and never got it,” said travel analyst Harveldt. “San Diego’s desire for China will take a long time to get fulfilled. There already is a lot of service from L.A., which already has a large native Chinese population.
“You’ve got to be very patient. It takes years for an airline to make a decision to start serving an area. They’re not risk-taking businesses.”