Fwd: SFO saw 1.7 million holiday travelers; airlines unprofitable

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--- In BATN@xxxxxxxxxxxxxxx, "1/6 SF Examiner" <batn@xxxx> wrote:

Published Friday, January 6, 2006, in the San Francisco Examiner

SFO saw 1.7m holiday travelers

By Neil H. Dempsey

SFO hosted nearly 1.7 million travelers this holiday season, 
realizing
internal predictions that the airport would see a 9 percent jump in
holiday passenger numbers since the year before, spokesman Michael
McCarron said Thursday.

McCarron said the airport was "very pleased" with the count -- which
came directly from devices at TSA checkpoints -- of 1,687,939
travelers.  Though the tally includes employees who pass through
checkpoints, it does not include passengers who transferred planes
post-security or those who landed but didn't disembark -- even though
both groups will be included in final tallies, he said.

The count represents about a 9 percent increase over the 2004
holidays, when the airport saw roughly 1.55 million travelers over 
the
last two weeks of December.  The airport also saw a 4 percent 
increase
in passengers this Thanksgiving.

SFO's increased traffic is consistent with what Burlingame City
Manager James Nantell called a "dramatic change" -- the comeback of
the travel industry and, with it, financial sustenance to Peninsula
communities.

Nantell said Burlingame's 10 percent hotel tax -- which typically
accounts for about one-fourth of the city's general fund monies -- 
has
made a significant resurgence since a damaging 2001-02 fiscal year.

That year, the city expected $14 million in revenue from hotels, but
received less than $7 million -- and hotel occupancy rates averaged
between 40 percent and 50 percent.  This year, Nantell said the
occupancy rate is back above 70 percent, though the city's not
receiving as much hotel tax as it would like because conditions
haven't enabled the hotels to raise prices to pre-Sept. 11 levels.

"It's back to normal occupancy, not normal on dollars," he said.  "We
need the rates now to move up."

Though it's encouraging that travel numbers are up throughout the
country, John Heimlich, chief economist with the Air Transport
Association, said it's difficult to tell whether commercial airlines
are making any money.

Despite low prices designed to stimulate volume, the latest data
indicates planes are only averaging 76.3 percent capacity, when most
need to be at 82.4 percent just to break even, he said.

"We'd be having record profitability if we had year 2000 fuel 
prices,"
Heimlich said.  "We need even more volume when we have today's low
fares."

ATA spokesman David Castelveter cited recently closed Independence 
Air
as an example of how popularity doesn't necessarily translate into
success.  "They were putting people on their planes ... but their
costs were outpacing their ability to bring in revenue," he said.

--- End forwarded message ---

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