State offers Asian airline $1M incentive to stay

Sep 11, 2009 (Alaska Journal of Commerce - McClatchy-Tribune Information Services via COMTEX) -- CHAWF | Quote | Chart | News | PowerRating -- The state airport system has given China Airlines a $1 million "incentive" to keep flying passengers to the state.

Alaska International Airport System officials said the move would bring new tourists to the state and most likely keep vendors from pulling out of Ted Stevens Anchorage International Airport's North Terminal.

"China Airlines applied, was accepted, and has begun participating and providing additional flights under the AIAS-Asia passenger incentive program this summer," said Christine Klein, deputy commissioner of aviation with the Alaska Department of Transportation.

The program's purpose is to boost passenger traffic between Alaska and Asia, as well as to enhance economic opportunities and strengthen commercial and cultural ties between the regions.

Taipei-based China Air accepted the offer to add one flight weekly to its three weekly winter flight schedule only days after the incentive was announced for the carrier. This comes after China Air indicated last fall that it would stop flying to the Anchorage airport.

Messages to China Airlines for comment were not returned.

Under the program, a participating airline pays the normal rates and fees to use the airport until it has completed providing the new or expanded service in the agreement.

The state then reimburses the airline. If the service wasn't provided, the state keeps the fees.

Major construction along the main terminal should be completed this fall. When it's done, domestic carriers will move out of the North Terminal and back to the main section. Add that to the loss of China Airlines, airport officials worried Duty Free Shop and food concessions in the North Terminal wouldn't have the business they needed to stay afloat.

The program, effective Aug. 26, can offer economic benefits to qualifying carriers that provide new or expanded service, Klein said.

"The goal is to bring new or increased international passenger service from Asia to Alaska," Klein said in a written release. "This incentive can provide up to $1 million of value for air carriers who can provide year-round scheduled new or increased service between Alaska and Asia. It's fairly common for airports to offer incentives, but this is the first time for AIAS."

The state airport system, under the Knowles administration, offered $1 million paid from the state's general fund to any carrier that would provide year-round service from Tokyo to Anchorage. No one, including Northwest Airlines, which at the time offered seasonal direct service from Anchorage to Narita airport near Toyko, ever applied to receive the funding.

Charlene's Express Travel, an Anchorage agency that specializes in Asian travel, said the China Airlines flights offered between Taipei, Anchorage and New York are important to those who seek connections to the Orient.

"This is a very important connection to those who need to travel to Asia and Southeast Asia," said Charlene Russey, owner of Charlene's Travel.

Russey also said that China Air offers the four weekly flights from Taipei to New York, with stops in Anchorage, during the summer months, and three flights in the winter. Each flight generally has up to 40 passengers who debark in Alaska for tours.

Russey had heard that the airline was planning to leave. Meanwhile, cruise ship companies said they are cutting back on Alaska cruises next year.

"This is the only passenger airline connection between Taiwan, Shanghai, Hong Kong, Malasia and Thailand," said Russey. "Without this service many travelers would be forced to fly to Seattle or another West Coast city."

Kathy Smith, chairman of the Airline Airport Affairs Committee and the director of airport affairs for Seattle-based Alaska Airlines, said her company is in favor of the program.

"We think the airport is doing a fine job by offering this incentive, which is an excellent program that adds one flight a week for year-round service and waives all of the participating airline's fees," said Smith.

Rob Stapleton can be reached at rob.stapleton.@alaskajournal.com.

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