Pirtland May Get Japan Service Back!

Sun Apr 29, 2001 10:19 am

WASHINGTON -- Now that Delta Air Lines has ended its two nonstop flights between Portland and Japan, Rep. David Wu and Gov. John Kitzhaber are trying to add more "international" to Portland International Airport.

Since April 1, the only flights leaving the airport to foreign destinations travel just 250 miles north to Vancouver, British Columbia.

"We lost prestige," said Richard Gritta, University of Portland finance professor and airline expert. "It's a blow to say we are an international airport, and all we can say is we fly to Vancouver."

Democrats Wu and Kitzhaber independently have been working to lure an Asian airline to pick up where Delta left off. In recent trade missions to the Far East, they haven't gotten any firm agreements, but a few promises to give the Portland market a good look.

Officials from EVA Air and China Airlines, both based in Taiwan, told Wu on his trade mission earlier this month that they would start studies into Portland's passenger and cargo potential.

Wu also met with Hong Kong-based Cathay Pacific Airways, but said he "wouldn't pin too much hope on them."

As for Kitzhaber, during a four-day trip to Japan and Korea last month, he met with officials at All Nippon Airways, Japan Airlines and Korean Air.

Katy Coba, international policy adviser to the governor, said the effort is a long-term dialogue, which could take three to five years to get any results. Part of the delay could come from dealing with some countries, including Japan, that have not deregulated their airline industries.

Wu's and Kitzhaber's staffs are working with the Port of Portland, which owns the airport, to come up with incentives for airlines that would offer flights to Asia, Coba said. That could include tax credits if the legislature will go along, revenue-sharing deals with the airport's duty-free store or commitments from the business community to guarantee use of any prospective flights.

Darryl Jenkins, director of George Washington University's Aviation Institute, said losing flights can be a "hysterical event" for communities and some will devise economic packages to entice airlines to their cities.

"Whether it is worth the money or not is a different question," he said.

What's at stake? Wu believes Portland's vitality in the next 100 years depends on maintaining international ties.

It comes down "to whether Portland is an international city or not," Wu said. "I have no intention of letting Portland slip."

Delta's decision to end the Japan-Portland route followed months of allegations that Asian travelers who arrived at Portland International Airport were subjected to harassment by federal immigration authorities.

The complaints earned this city the nickname "Deportland" among some Asian travelers, and resulted in the retirement of the local chief of the Immigration and Naturalization Service as well as new training for local INS inspectors.

Delta insisted Portland's bad image in Asia had nothing to do with its decision to end the flights between Portland and Japan. Toyojiro Soejima, consul-general of the Japanese Consulate in Portland, said the airport's reputation has improved.

No matter, the move could be costly for Portland and the surrounding region.

Delta fueled international expansion in Oregon after the airline's first passenger and cargo service to Japan took off in the 1980s.

Some experts estimate that communities lose $150 million to $250 million annually for each international route, said Suzanne Miller, general manager of marketing and customer service for the airport.

Last year, the airline carried 7,366 tons of cargo between Portland and Asia, more than a third of all international air cargo at the airport.

Over 1,100 visitor industry jobs are related to the Asian gateway, according to a study performed for the Port.

Delta said by moving its Portland flights to Tokyo and Nagoya, Japan, to New York and Los Angeles, respectively, the company can increase revenue by as much as $40 million a year. In the 12 months ending in September, the airline said it lost $10 million on its flights between Portland and Japan.

To find a company to fill that gap, the Port of Portland and business leaders have formed an international steering committee to help the community that Portland International serves put its best foot forward.

"It's the solid business case, how much traffic, how much cargo is moving," Miller said. "What are the trade ties? What are the cultural ties? What are the business ties?"

But University of Portland's Gritta said he wouldn't get too hopeful because the economics of the situation are working against the region.

Portland, he said, is a "smaller big" city situated too close to Seattle and San Francisco, two major hubs for international flights. If a route from Portland was cost-effective for the penny-pinching airline industry, Delta would have hung on.

"The fact is if they can't make money doing it, they are not going to fly it," Gritta said. "I wonder how any carrier could project a profit when Delta couldn't."

Economically, Wu is convinced the city has plenty to offer. And any carrier will get "a very warm welcome and our deep appreciation," Wu said.

(Copyright 2001 by The Associated Press. All Rights Reserved.)

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