Hello from bizjournals.com! David Mueller (kawika42@mac.com) thought you might like the following article from the Sacramento Business Journal: http://www.bizjournals.com/industries/travel/airlines_airports/2002/06/10/sacramento_focus1.html Up in the air After 9 tries in 15 years, South Lake Tahoe airport still seeks a scheduled commercial airline service Story Barbara Marquand ------------------------------------------------------------ The success or failure of Tahoe Airport's effort to attract a commercial airline to provide scheduled flights is up in the air. But while officials with the city of South Lake Tahoe remain optimistic, they aren't counting on just commercial service to keep the airport aloft. Scheduled flight service at Tahoe Airport has been an up-and-down proposition for the last 15 years. Nine airlines have come and gone, the latest departure by Allegiant Air, which exited in 2000 after declaring bankruptcy. Tahoe Airport Commissioner Carl Ribaudo says he thinks there will be opportunity for commercial flights at Tahoe once the airline industry shakes out and carriers are looking for niche markets. Meanwhile, though, airport officials aren't just sitting around and waiting for it to happen, he says. Instead, the city is in the midst of adapting a strategic marketing plan for the airport, and it's focusing on other aspects of airport business, such as private flights for tourism and executive flights. The airport has a new restaurant and visitor information center and a significant air ambulance service, he adds. Maintaining scheduled flights at Tahoe wasn't always such a bumpy ride. In the late 1970s and early 1980s, before the airline industry was deregulated, the Tahoe Airport had excellent commercial flight service, says Mike Dikun, the city of South Lake Tahoe's airport and public transit manager. Airlines such as Pacific Southwest and Air Cal served the airport, and at their peak, about 300,000 passengers a year flew in and out of Tahoe. "Those were the golden years of air transport within California," Dikun says. After deregulation, though, bigger players bought out the independent regional airlines. American Airlines bought Air Cal, and USAir purchased Pacific Southwest, and service to smaller markets shrunk. In 1982, meanwhile, the city was hit with a lawsuit that would impact airport operations. The California attorney general's office, the Tahoe Regional Planning Agency and The League to Save Lake Tahoe sued the city over noise and air pollution at the airport. After 10 years of litigation, the 1992 settlement put the airport under restrictions to limit pollution, including tight operating curfews and a limit on the number of certain types of planes, such as 737s, that can fly in and out of the airport. Tahoe officials have worked hard to lure commercial airlines to provide service in the last decade, but have had mixed success. Allegiant Air offered service for about six months two years ago, then hit financial turbulence after a hike in fuel prices. The Fresno-based carrier filed for Chapter 11 bankruptcy in late 2000 and reorganized. Maury Gallagher, former president and chief executive of West/Air United Express and a founder of Value Jet Airlines, is now majority owner. The airline offers scheduled commercial flights from Fresno to Las Vegas, Colorado Springs, Colo., to Las Vegas and Fresno to Reno, and provides charter flights at multiple airports. Although the airline is on solid financial footing now, Allegiant sales and marketing vice president Mark Peterson says he thinks the company will not offer scheduled service in Tahoe in the near future. He says it was a thin market to begin with and still doesn't have the volume of traffic the company is seeking. "Tahoe isn't on our radar screen." Dikun says city officials are in discussions with established regional airlines interested in serving the Tahoe airport. "There's a good chance that within one year, we'll have something formalized," he says. He sees the greatest potential in scheduled flight service between Tahoe and the Bay Area and Los Angeles -- the home of 70 percent of Tahoe's weekend visitors. He also sees potential in connections to the Pacific Northwest, Salt Lake City and Phoenix. As traffic congestion to Tahoe worsens, air travel becomes an ever more attractive alternative. Dikun says air travel could be tied to the rest of the public transportation system at Tahoe, including shuttle buses and boat shuttles between the north and south shores, especially as South Lake Tahoe focuses on bringing more people there. The city is considering a proposal for a convention center, and already has been undergoing a face-lift in the last year with development of the $250 million Park Avenue Project. The 35-acre development along Highway 50 includes restaurants, condominiums, stores, restaurants and a transportation hub. Dikun says he hopes that as regulatory agencies place more emphasis on a planned regional transportation system, they will include the airport as a player in helping to reduce pollution from cars. At the same time, Dikun is well aware of the challenges in luring an airline to provide scheduled service. The fact that nine airlines have been in and out of the Tahoe Airport in the last 15 years makes potential newcomers tentative about jumping into the market. The airline industry is also in a state of flux, and the environmental restrictions at Tahoe are "less than optimum" for attracting new carriers, Dikun says. Copyright(c) American City Business Journals Inc. All rights reserved. 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