AIR SERVICE SOUGHT FOR A.V. TRAVEL BANK MAY BE ANSWER FOR PALMDALE.

Byline: Jim Skeen Staff Writer

PALMDALE - Civic leaders trying to bring airline service to the Antelope Valley are considering whether putting some money on the table is a necessity to attract an airline.

The idea is called a travel bank, a relatively new concept that has worked for medium-size cities like Eugene, Ore., and Wichita, Kan.: Businesses deposit money into an account to draw against for tickets on the airline that agrees to come into town.

``I think it's vital. I think we have to do it,'' said David Myers, Greater Antelope Valley Economic Alliance executive director and former Palmdale councilman. ``It's the difference between success and failure. It's one thing to say we need an airline in Palmdale. It's another thing to step up and pay for it.''

Antelope Valley lost its last airline five years ago, and civic leaders - with help from Los Angeles airport officials - have been trying to get a new one.

Commuter airlines United Express, America West and SkyWest operated out of the Palmdale Regional Airport terminal at U.S. Air Force Plant 42 in the 1990s - sometimes two airlines at a time. United Express, the last commercial carrier at the terminal, pulled out of Palmdale in February 1998.

At times, efforts to develop Antelope Valley's airline service seemed snake-bitten. Within months of service starting in 1990, the Persian Gulf War sent fuel costs soaring. In 1991, 12 passengers and crew were killed when a Palmdale-bound aircraft was hit on an LAX runway by a Boeing 737.

Then recession and defense downsizing cut local travel.

Now small and mid-size cities, like Palmdale, face huge difficulties in attracting air service or expanding existing service. Since the 9-11 terrorist attacks, that task has become even more difficult.

Passenger volume at small and mid-size city airports has dropped between 5 percent and 10 percent since Sept. 11, 2001, the U.S. General Accounting Office reported.

``The job is even tougher,'' said Palmdale Mayor Jim Ledford. ``Most major airlines are in financial dire straits. That limits their desire to enter new markets.''

Palmdale's best bet, Ledford said, might be in trying to attract one of the recent start-up airlines, such as JetBlue. Calls to JetBlue for comment were not returned.

Meanwhile, Los Angeles' airport department - which has an agreement with the Air Force to use Plant 42 runways and which operated Palmdale Regional Airport in the 1990s - is paying for a marketing study to provide evidence to airlines that the Antelope Valley is worth serving.

SH&E - a consultant for the Los Angeles World Airports, the name for the city of Los Angeles' airports department - is surveying Antelope Valley businesses to see how much air travel their employees and their clients do each year. The survey, which is looking at 50 key Antelope Valley businesses, is expected to be completed in late February.

``We're going to the carriers and we're making the case into why they should come back into the market with commercial service,'' SH&E representative Sonjia Murray said. ``What we're trying to do is get a compelling story.''

Officials are focusing on regional airlines or major airlines with regional affiliates, such as America West, American Eagle, Delta Express or United Express, operating 50- to 70-passenger jets - smaller than 737 jetliners but bigger than the turboprop planes that served Palmdale in the 1990s.

``The carriers are really interested in business travelers,'' Murray said.

The only airline with which officials have met so far is America West.

``It was a good meeting but as we all know these are particularly tough times for my industry,'' Murray said. ``The airport is very much poised to be very much part of the regional solution over the next 10, 15 years.''

The travel-bank idea goes beyond the marketing survey in providing evidence a community can support an airline, supporters say.

Under the concept, businesses deposit money in an account administered by a entity such as a chamber of commerce. The businesses then draw against the account for travel on the designated airline.

Eugene, Ore., created a $450,000 travel bank with 65 companies to bring in Air Horizon. A $7.4 million bank involving nearly 400 companies helped bring AirTran to Wichita.

A travel bank is an idea worth considering, said Los Angeles World Airports spokesman Dennis Watson.

``I think that's a very effective way to convince an airline you have a market that would support service,'' Watson said. ``Still, that's no guarantee. Since 9-11, the airlines are not in an entrepreneurial mode.''

SH&E, based in Cambridge, Mass., is under contract with LAWA to provide marketing and strategic development support for the Palmdale Regional Airport. The company is one of five companies awarded LAWA contracts in 2001, a total of $6.9 million for three years of support to the department's airports.

Under Los Angeles World Airports's agreement with the Air Force, Plant 42 can be used by civilian airlines offering as many as 50 flights a day, and there are provisions to expand to 400 flights a day.

Passenger volume out of Palmdale was highest in 1990, the year both America West and SkyWest started service after a five-year lapse. Passengers traveling through the Palmdale terminal numbered more than 48,500 in 1990, but dwindled to fewer than 19,400 by 1997.

The difficulties in attracting air service that face communities like Palmdale were highlighted in a January report by the U.S. General Accounting Office, Congress' auditing arm. The report focused on ``small'' communities, ranging from Ruidoso, N.M., population 19,531, to Mobile, Ala., population 400,063.

Palmdale and Lancaster, by comparison, each have more than 120,000 inhabitants, and the valley overall has more than 400,000.

Small communities often lack the population base to either support an airline or, for those that already have air service, enough population to attract other airlines to provide passengers other travel options.

Palmdale airport supporters believe the Antelope Valley does have the population base, and the business travel base, to support air service.

``The SH&E survey may help see if it (the airport) is viable,'' Ledford said. ``We need to analyze who our market is.''

A major hurdle for small communities, the GAO report said, is passenger ``leakage,'' where potential customers bypass the local airport and drive to larger airports offering more flights or direct flights to their destinations or cheaper fares.

In Maryland, an aviation official told the GAO that passengers are willing to bypass the airport in Hagerstown to make the 75-mile drive to the Baltimore-Washington International Airport.

Aviation officials in Tallahassee, Florida, said it was not uncommon to see passengers drive 160 miles to the airport in Jacksonville rather than use the local airport.

Palmdale air travelers have a variety of airport options within relatively easy drives, including Los Angeles International, Long Beach, Burbank, Ontario, and Meadows Field in Bakersfield.

As Los Angeles County's highways become clogged, however, many air travelers might find Palmdale more appealing.

``Does gridlock make us more attractive?'' Ledford said. ``I think so. As time goes by we'll be more attractive.''