Brett Smith (right), CEO of Propeller Airports, shares a scene from the March 4, 2019 opening of the commercial airline terminal at Paine Field during a Lynnwood Chamber of Commerce virtual gathering on March 17, 2021.

Brett Smith (right), CEO of Propeller Airports, shares a scene from the March 4, 2019 opening of the commercial airline terminal at Paine Field during a Lynnwood Chamber of Commerce virtual gathering on March 17, 2021.

Passenger service at Paine Field is gradually bouncing back

Terminal operator Propeller Airports foresees a possible upswing by June as air travel rebounds.

EVERETT — Brett Smith, CEO of Propeller Airports, hopes the past year was a case of the terrible twos that’s over and done with.

March 4 marked the second anniversary of the new passenger terminal at Paine Field in Everett. The date passed quietly for Propeller, the privately owned company that built and operates the two-gate terminal. In a tweet that day, the company chose to again highlight the facility’s first anniversary, not the second. That first year, before the pandemic, more than one million passengers were served and there were 24 daily round-trip flights on the schedule.

A few weeks later, COVID-19 brought the airline and travel industry to its knees. Paine Field was no exception. The schedule dwindled to only four flights per day.

“I feel like, 2020, we kind of lost a whole year,” Smith told the Lynnwood Chamber of Commerce during an online gathering recently.

On the upside, there are positive signs that air travel is on the rebound, he told participants.

Alaska Airlines has, so far, resumed a total of six daily round trips, serving six destinations: Los Angeles, Las Vegas, Palm Springs, Phoenix, San Diego and Santa Ana. The Seattle-based carrier said last month it plans to begin round trip service from Everett to Boise, Idaho, in September.

United Airlines, which shares the terminal with Alaska, continues to offer one daily round trip to its Denver hub.

”Hopefully by the end of the year, we’ll be back up to 24 daily departures to 12 destinations — assuming nothing else changes with COVID,” Smith said.

In the meantime, there are some favorable signs that point to a quicker-than-expected recovery, Smith said, raising the possibility that many routes could return to Everett by June.

Amit Singh, president of Edmonds College, asked what those indicators are.

The Transportation Security Administration’s daily passenger tallies and load factor rates for Alaska and United — the percentage of occupied seats across their networks — are two metrics Smith is watching.

Both numbers are climbing, said Smith. Alaska is reporting 50% load factor; normal is 80% or more.

The number of travelers who pass daily through TSA checkpoints has been averaging about one million in recent weeks. Although that’s 50% of 2019 daily averages, it’s way up from the 100,000 and 200,00 daily figures seen a year ago.

The airline and travel industry is also monitoring vaccination rates, with more people expected to travel as the figure climbs.

At a U.S. Chamber of Commerce virtual aviation summit March 31, Boeing CEO David Calhoun said he expects that “when the vaccines hit 50% to 70% distribution, we will come back to normal.”

At the same summit, Alaska Air Group’s new CEO, Ben Minicucci, said March will be the first month in 12 that the airline has had positive cash flow, “after billions of dollars of losses.”

Brett Smith, CEO of Propeller Airports, gives an online presentation about airline travel during a Lynnwood Chamber of Commerce gathering. Propeller built and operates the two-gate airline passenger terminal at Paine Field in Everett.

Brett Smith, CEO of Propeller Airports, gives an online presentation about airline travel during a Lynnwood Chamber of Commerce gathering. Propeller built and operates the two-gate airline passenger terminal at Paine Field in Everett.

One positive indicator that Smith can see from his Paine Field office is the growing number of Boeing 737 Max passenger jets that are leaving the airfield after being parked for more than a year.

“Alaska Airlines’ 737s are gone, which means they’re out there flying,” Smith said. The Puget Sound Business Journal recently reported that Alaska has recalled about 400 pilots, a figure Smith also cited.

Still, should the economic crisis continue, the terminal is ”well-positioned to weather the storm — however long it takes,” Smith told the Lynnwood Chamber of Commerce gathering.

“Our shareholders also own Gatwick Airport,” 30 miles south of central London, “and Edinburgh Airport in Scotland,” said Smith, referring to Global Infrastructure Partners, which owns a major stake in both airports.

In 2019, Global, a New York-based infrastructure investment fund, took a stake in the Paine Field passenger terminal with a “significant investment,” according to Reiter Law, which represented Propeller in the deal. The amount was not disclosed. Global’s investment was made on behalf of the Washington State Investment Board, which manages retirement funds for firefighters, teachers, police and other public employees.

Paine Field’s is one of a few privately owned terminals in the U.S. By contrast, half of Europe’s airports are privately owned and operated, Smith noted.

“We’re still losing a massive amount of money, but we’re properly funded,” said Smith. “We are here for the long haul, so not to worry, the airport is going to continue and be strong.”

Another participant asked about when corporate travel might return. Airlines and airports are eagerly awaiting the return of the business set, whose premium seats yield the highest profit margins.

“It’s a question I get asked a lot from the people I report to,” said Smith. “I don’t know. Personally, I don’t think it’s going to take until 2024 to come back.”

Before the pandemic, business travelers were about 70% of the terminal’s clientele, Smith said.

Vacation travelers have been the first to return because, said Smith, “everyone is itching to get away.”

Smith hinted that there may be airlines waiting in the wings for space at the terminal.

“We’ve gotten interest from other carriers,” Smith said. “We haven’t moved forward with that because there’s not a lot of expansion going on.”

Regional competition could heat up this year.

In March, Southwest Airlines announced that it would begin service from Bellingham International Airport. The airline hasn’t said which destinations it will serve, only that it expects to start service from the Bellingham airport before the end of the year. Currently, Allegiant, Horizon and San Juan airlines operate scheduled routes from Bellingham.

A return to normalcy — and the need to compete — is expected to revive the question of Everett terminal expansion, Smith said.

“There is room to grow … and there’s definitely demand for it.” said Smith. “That’s something that we would look at with the community and make sure it’s in line with what people want us to do.”

Other factors, including the loss of production of the Everett-built Boeing 787, which has moved entirely to South Carolina, could elevate the role of commercial aviation at Paine Field, Smith said.

“Paine Field is responsible for over 65,000 jobs, directly and indirectly,” Smith said. “It’s very important that we keep going here and diversify our economy, especially considering that we’re losing the 787. We have to fill the gap, and commercial aviation is just one piece of that.”

Janice Podsada; jpodsada@heraldnet.com; 425-339-3097; Twitter: JanicePods

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