=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/chronicle/archive/2004/07= /17/BUGVI7N3531.DTL --------------------------------------------------------------------- Saturday, July 17, 2004 (SF Chronicle) Flying high/International passenger traffic soars at SFO David Armstrong, Chronicle Staff Writer International passenger traffic, long the bread and butter of San Francisco International Airport, is returning, driven by a stronger economy, the apparent containment of SARS in Asia and pent-up demand for travel. The number of international passengers soared in May, the most recent month for which airport figures are available, by 42.9 percent over May 2003, to 637,192 from 446,025, according to statistics from the airport. The number of domestic passengers also rose strongly, though not at as dramatic a rate, to 2,195,287 from 1,773,299, an increase of 23.8 percent. The growth in overseas travel is due in large measure to the growing strength of the Asian economies, particularly China, the world's fastest- growing economy, and the need for business travelers to fly to cities like Beijing, Shanghai, Taipei, Taiwan and Singapore. These latest data are also strong because 2003 was a terrible year for international air traffic. A year ago, many fliers were grounded by their fears of SARS, worries about the Iraq war and the uncertainties of a weak economy. As those fears have abated, airlines have been adding flights and passengers are filling planes, especially on Asia-Pacific routes to SFO, which bills itself as a gateway to and from the Pacific Rim. On June 10, United Airlines, the dominant carrier at SFO with half of all passengers and flights, restarted its daily, nonstop service between San Francisco and Beijing that it had discontinued in 2001. On June 30, Air New Zealand started a new, three-times-a-week service between San Francisco and Auckland. This fall, Cathay Pacific Airways, Hong Kong's largest airline, will relocate its regional office from Los Angeles to San Francisco as a prelude to a still-undefined increase in service between SFO and Hong Kong. Cathay Pacific, which has a 15-person staff in San Francisco's Financial District, will increase its head count to 42 by bringing its 27-person staff from Los Angeles by November, said Terry Kanat, the airline's sales manager for the northwestern United States. The airline is looking for bigger offices in San Francisco's downtown, he said. Kanat attributed Cathay's decision to enlarge the San Francisco office to "the large Cantonese-speaking community of Chinese Americans in the Bay Area, many of whom are expatriates from Hong Kong and consider us their hometown airline. We decided we wanted to have more of a presence here. We plan to add more flights between Hong Kong and San Francisco, not in the near term, but in the medium term." Cathay Pacific presently flies once a day between SFO and Hong Kong, usi= ng a B-747-400, the biggest commercial passenger jet in the sky. Cathay's passenger traffic to North America leaped 116 percent in June of this year over June 2003, when air traffic was still recovering from the SARS scare. International travelers are especially prized by airports because they tend to stay longer at their destinations, pumping more money into the local economy and lingering at airport concession shops. Airports also harvest higher landing fees from the big, heavy jetliners used for long-haul international flights, because the fees are determined by the weight of the aircraft. SFO's cascade of good international news, along with nascent low-cost carrier Virgin America's decision to base its operational headquarters here when the airline gets airborne next year, has SFO officials feeling good. "There's been pent-up demand for a couple of years, and the economy seems to be improving," airport spokesman Michael McCarron said. "The carriers, especially on the international side, are ready to increase capacity. I think we're seeing all of it together." SFO spent nearly $1 billion building a gleaming new International Termin= al that opened in December 2000. The airport claims it is the largest international terminal by square footage in the United States. All told, SFO has 50 daily nonstop international departures a day, to 27 foreign cities. "We've got plenty of capacity with the International Terminal, which is nearly new," McCarron said. Jane Sullivan, the airport's marketing manager, also credited the International Terminal's common check-in area, which allows airlines to set up anywhere in the spacious building without paying heavy start-up costs. That, she said, helps reduce what would be "a huge capital investment for an airline like Air New Zealand to start doing business here." The airport, she said, is trying to accelerate its international traffic still more. "We've been working these people for a long time," she said. "We have very serious conversations going with five or six airlines at any one time." Summer is traditionally a time when airlines increase service to capture increased leisure travel, but resurgent business traffic has driven airlines to add service this year, too, airline officials say. United's month-old daily nonstop flight between SFO and Beijing has been booking in the high 80 percentile, nearly filling the planes. The brisk sales are accounted for in part by high-tech executives shuttling between Silicon Valley and the booming Chinese capital, United spokesman Stephan Roth said. Demand for service on Air New Zealand's 392-seat B-747-400 has also been strong in its first weeks, with the percentage of seats filled nearing 80 percent overall and 85 percent in economy class, according to Gus Gilmore, Air New Zealand's vice president for the Americas, United Kingdom and Europe. The resurgence in Asia-Pacific travel extends to Singapore Airlines, whi= ch is enjoying strong bookings on its San Francisco-Hong Kong route, according to airline spokesman James Boyd. Singapore Air does not break out statistics for individual routes, but Boyd said the carrier "is well into the pre-SARS figures" this summer. E-mail David Armstrong at davidarmstrong@xxxxxxxxxxxxxxxx --------------= -------------------------------------------------------- Copyright 2004 SF Chronicle