Lufthansa will end Portland-Frankfurt flight
Posted by goliver
July 06, 2009 14:29PM
Stephanie Yao Long/The Oregonian
Port of Portland maintenance employee Heinrich Gerke and his four-year-old son Samuel, both German citizens, had their picture taken by Suzanne Miller, right, of the Port of Portland, during the arrival of Lufthansa's inaugural flight into Portland International Airport in March 2003.
Portland International Airport managers, dismayed that Lufthansa is suspending PDX-Frankfurt service in September, plan to pay Delta Air Lines to keep flying to Tokyo.
A Deutsche Lufthansa spokesman confirmed Monday that the German airline would halt its flights to Frankfurt after Sept.12, saying the nonstop service was losing money. The 6-year-old route, the airline's only PDX flight, fell victim to the global recession, Lufthansa's financial woes and competition from Delta's Portland-Amsterdam service.
Managers of the Port of Portland, which operates the airport, confirmed Port commissioners would vote Wednesday on a proposed $3.5 million payment to Delta. Under the agreement, which involves no tax revenues, Delta would promise to keep daily flights through May between PDX and Japan's Narita International Airport.
Port officials' eagerness for the unprecedented cash deal shows the high priority they place on international service. Delta's Tokyo flights pump more than $60 million a year into the regional economy, according to the Port, keeping Portland on the world map for business and leisure travel.
"It's unique, but this is a time to be aggressive," Bill Wyatt, Port of Portland executive director, said of the emerging Delta deal. "There is reason for optimism that this will bridge us to a time when the economy improves."
JAMIE FRANCIS/THE OREGONIAN
Lufthansa will end nonstop flights between Portland International Airport and Frankfurt, Germany, as the airline slashes costs worldwide amid slumping demand. The final flights will be Sept. 12.
Port managers want to avoid a return to the days early this decade when PDX -- once an Asian gateway for Delta -- kept the "international" in its name only by virtue of short hops to Vancouver, B.C.
Port and business leaders scrambled to recruit international carriers in 2002, landing Lufthansa, which launched the next year. The Port offered risk-mitigation and marketing-support packages to any airline that would restore nonstop service to Asia.
Northwest Airlines responded, launching Tokyo service in 2004. Last year, Northwest started its Amsterdam flights. Delta inherited those routes when it acquired Northwest last October.
However, PDX is handicapped by its relatively small market.
Portland is the smallest U.S. nonhub market with transoceanic service to both Europe and Asia, according to David Zielke, the Port's general manager for air-service development.
The nine-member Port commission will vote on the Delta deal during its monthly public meeting, which will begin at 9a.m. Wednesday at the agency's headquarters, 121 N.W. Everett St. Port managers will offer a similar deal to any other carrier willing to start daily nonstop service between Portland and Asia.
Managers figure that by investing in Delta's Tokyo flights, they also will encourage the Atlanta-based airline to keep its Amsterdam service. Planes can hop from the Pacific route to the Atlantic one and back.
"It's a good business decision on the Port's part and on behalf of the community," said Portland travel executive Sho Dozono, who co-chairs the International Air Service Committee. The panel, headed by Dozono, Wyatt and Ted Cullen, Nike Inc.'s global travel and events director, helps attract and retain international carriers.
Dozono, Azumano Travel president and chief executive, said fears of swine flu have compounded travel-industry troubles this year. Those fears caused a dozen Japanese tour groups to cancel on Azumano this summer.
The recession has forced Delta to suspend international service between U.S. airports and Frankfurt. Seoul, Shanghai, London and Edinburgh.
"Delta also recently informed the Port of Portland that its international gateway flights were at risk," the air-service committee co-chairs wrote in a memo circulated Monday.
Separately, Lufthansa notified the Port last weekend that it would suspend Frankfurt service after final flights Sept. 12. "It was really not an easy decision for us," said Martin Riecken, Lufthansa corporate communications director.
The airline will consider reinstating the service next year, but for now the flights lose money, Riecken said. The Port had already waived landing fees for nonstop planes arriving from overseas. Lufthansa and Port managers did not discuss potential additional incentives, Riecken said.
"Our flights were never empty," Riecken said. "But the question is really how profitable the revenue is from those passengers."
Larry Maile, of the Portland agency Travel Cuts, said Lufthansa's departure will hurt.
"People really loved that flight," Maile said. "It's nice to be able to take that 10-hour flight right to the heart of Europe, and then get a short little hop to your final destination."
Travelers already booked on Lufthansa flights after Sept. 12 will probably be rerouted through Seattle, he said, where the airline also offers Frankfurt service. Alternatives are Delta's Amsterdam route or a five-hour flight to the East Coast followed by a seven-hour flight to Europe.
Airline analysts expect Lufthansa to cut costs by as much as $1.4 billion when it announces measures July 30 to address collapsing demand.
Germany's largest airline also is trying to acquire ailing Austrian Airlines, subject to European antitrust clearance.
U.S. airline managers had hoped that deep cuts in flying this year would increase revenues. Carriers have managed to keep their planes about as full this year as last, but revenues per seat flown have dropped.
-- Richard Read; email@example.com
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