Departures fail to dim Oakland airport outlook
2 carriers leave, but East Bay boom ensures success
Oakland International Airport has hit some bumps.
There are no more cheap flights to Rome. JetBlue, which flew to Boston, New York and Long Beach, will leave in April. Southwest, which accounts for a majority of the airport’s traffic and has been hurt by the grounding of Boeing’s 737 Max aircraft, is operating fewer flights. After the airport invested $45 million in a new international arrivals area, Norwegian Air, which accounted for close to half of its crossborder flights, left for San Francisco International Airport. And the coronavirus cast a pall on overseas travel.
Oakland has to hustle to compete with San Francisco’s name recognition and San Jose’s Silicon Valley dominance. But the airport, which has grown by more than 41% in the past five years except for a dip in 2019, has better weather than foggy San Francisco, and its home county of Alameda is tied with Contra Costa for the fastestgrowing county in the Bay Area.
Experts say the recent blows are part of a boom and bust cycle that’s inevitable for an airport that attracts lowcost carriers. This year, Southwest has expanded its flights from Oakland to Hawaii, and Spirit added a route to Fort Lauderdale, Fla.
“As the East Bay grows further in population and jobs and infrastructure development, all of those things contribute to growing demand for air travel,” said Bryant Francis, aviation director of the Port of Oakland, which oversees the airport. “We think we’re well positioned geographically to respond to that growth.”
As roadways become more congested, Francis predicted that travelers will prioritize time and convenience when choosing airports.
Oakland City Councilman Larry Reid, whose district includes the airport, shrugged off the notion that losing two of 16 airlines in a few months spelled trouble.
“There are airlines that come and go, and certainly we’d like to retain them all, but it’s the marketplace that dictates whether or not they continue to grow or expand,” Reid said.
“There are other carriers that are looking at the market that Oakland serves, and hopefully we’ll see those carriers moving in and replacing some of the carriers that we’ve lost,” Reid added.
The Oakland airport says it serves 13.4 million passengers annually. Last year, by contrast, San Jose’s airport had 14.9 million and SFO had 57.5 million. East Bay passengers pick Oakland because it’s more convenient and often cheaper.
“We choose it because it’s closer,” said Benicia resident Dann Arcandia, returning from Seattle with his fiancee, Gaby Reyes, on a recent afternoon. The couple like Oakland because it’s fast to get in and out of, with frequent West Coast flights, although Arcandia said his parents fly out of SFO when they go to the Philippines.
Since the coronavirus struck, Oakland International Airport has seen no “noticeable changes” in the number of passengers, spokeswoman Keonnis Taylor said by email. No quarantines, cancellations or additional screenings have yet been needed, although “there is no way to predict impacts to future travel,” she said.
Oakland airport is advertising locally, with pictures of Hawaiian paradises luring beleaguered BART commuters at Powell Street and Walnut Creek stations. It’s also hoping to use technology to boost the visibility of Oakland airport in online search results, according to John Albrecht, aviation marketing manager.
The challenge is getting outoftown travelers, who may not think of Oakland first, if at all, when coming to San Francisco. JetBlue announced it will discontinue “unprofitable service” to Oakland on April 29, although it didn’t specify why it was unprofitable. It will still fly from SFO and San Jose.
Norwegian saw more profits across the bay.
“While we have been very pleased with Oakland International Airport and their tremendous help to put Norwegian on the map in the Bay Area, we do see bigger returns operating out of San Francisco International Airport, especially on more businessdriven routes like London, Paris and Barcelona,” Norwegian spokesman Anders Lindström said in an email. “With SFO, our flights appear more visibly in search engines, and are more appealing to business travelers who enjoy our Premium cabin, providing higher yield from a business perspective.”
Last year, airports across the country were hit with the grounding of the Boeing Max 737 after two fatal overseas crashes. Oakland airport saw a 1.5% decrease in passenger numbers, airport data show. SFO also saw a drop in traffic last year, although it was less than 1%. San Jose witnessed more than 10% growth, but a spokeswoman said that without the grounded aircraft, it could have been one to two percentage points higher. The Federal Aviation Administration, which is responsible for certifying Boeing’s aircraft for safety, has said the Max may get back in the air by summer.
The Max grounding is particularly problematic for Oakland because Southwest, the country’s largest carrier and user of the aircraft, accounts for 70% of Oakland airport’s traffic. With 10% of Southwest’s fleet grounded, the airline reduced the number of daily nonstops to certain destinations.
Southwest came to Oakland in 1989 (after SFO but before San Jose) because of its focus on secondary airports with available space and underserved markets, spokesman Brad Hawkins said. The target is local traffic: 8 out of 10 Southwest passengers in Oakland are starting or ending their travel.
Experts said Southwest’s monopoly is Oakland’s asset and a liability.
“That is really a doubleedged sword,” Ben Mutzabaugh, senior aviation editor for the Points Guy, an online travel news and data source, said, adding: “In any airport where one airline has a hugely dominant position, it is a barrier to entry for new airlines or existing airlines to add more service.”
“What Oakland needs to try to do is attract airlines other than Southwest to focus on supply,” said Henry Harteveldt, president and travel industry analyst at Atmosphere Research Group. “That would be a huge win for the airport and East Bay community because they feel it’s a very convenient flight option.”
Oakland airport’s Francis said that “in terms of whether other carriers can be successful in a market that is dominated by Southwest, there are multiple examples across the country where that is the case.”
Oakland has also sought more international travel. The airport was one of the first destinations for lowcost European carrier Norwegian in 2014, the airline said. The number of international passengers arriving in Oakland soared from just over 387,000 in 2017, when the airport invested $45 million in a new terminal, to 477,730 in 2018. In 2019, international arrivals dropped down to fewer than 370,300. And that was before Norwegian pulled out.
The remaining international flights are six yearround routes to Mexico and one route to the Azores once or twice weekly from June to September. Mexican carrier Volaris expanded its Oakland service 55% last year, ironically after shifting part of its operation to SFO and then back again to Oakland, Albrecht said.
Despite Norwegian’s pullout, the multimilliondollar international terminal “was money well spent,” Francis said. Several international carriers don’t have a presence in the Bay Area, which they would naturally want to serve, he added.
“You never know when there will be the next discount airline looking to make a splash in the Bay Area,” Mutzabaugh said.
For now, Oakland airport projects 10% growth over the next five years and is focusing on reinventing its food and dining program and improving customer experiences.
“There’s a lot to be optimistic about,” Francis said.