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Taking Flight: El Paso International Airport’s booming business

El Pasoans will have a new airline option beginning next week.

El Paso International Airport (EPIA) welcomes Alaska Airlines on Tuesday, which will offer daily non-stop service to and from Seattle and San Diego. The addition of Alaska Airlines makes the seventh commercial airline to offer service out of El Paso. Seattle marks the 15 th city the airport offers non-stop service to, up from 10 in 2015.

“It isn’t something we just start negotiations or start discussions one month and they’re here the next,” Monica Lombraña, Managing Director for Aviation and International Bridges, said. “It takes a very, very long time for an airport to prove their business case to an airline.”

In the case of Alaska Airlines, Lombraña says it took seven years.

“[I’m] pretty excited about it,” El Paso resident Trent Anderson, who’s from Seattle, said. “It’ll be good trying to get back there once or twice a year to visit family. It’ll be nice to have a [direct] flight.”

It is part of a rapid growth EPIA has seen in recent years with no end in sight. Since 2015, 19 announcements have been made about new or expanding service.

“It’s a catalyst,” Lombraña said. “When you have an airline go into a new market and it proves that the market is sustainable, then that’s where you see growth.”

EPIA surpassed 3.2 million passengers in 2018, the first time eclipsing the 3 million mark since 2010 and an 18 percent increase since 2015.

“[It’s] a good sign, not just for the Airport but for the region as a whole since it is a sign of a growing economy.”

EPIA’s Incentive Program

EPIA offers new airlines an enticing incentive plan to offer service to El Paso.

The incentive program includes the following during the first year of service:

Landing fees waived
EPIA match on marketing dollars spent

“When an airline wants to come in they want to make sure that that particular route is viable and sustainable in the future,” Lombraña said. “We want that, too. Part of that is getting the word out there.

EPIA Eyes Future Destinations

Lombraña says the Airport is never complacent with the service currently offered.

EPIA is currently eyeing four top destinations it would like to add non-stop service to:

San Francisco
Greater New York Area
Washington, D.C.

“You take, for example, Washington, D.C. Every time we meet with them, I remind them that we’re home to Fort Bliss, one of the largest military installations. We’re home to every major law enforcement agency. The demand is there, and not only is it there, it’s going to grow.”

Lombraña added EPIA is always looking to offer destinations to Mexico, but she says the Airport faces a challenge in its competition with Ciudad Juárez International Airport .

EPIA’s Revenue Sources

Business is strong at EPIA. The Airport projects it will make $42 million in operating revenue and $5 million in net revenue this fiscal year.

Lombraña says what’s unique is where that revenue is coming from.

“Seventy-two percent of that comes from non-aviation sources, which includes everything that doesn’t have to do with the airlines themselves.”

Compare that to a 2018 study done by Airports Council International which found the average non-aviation operating revenue for airports across the world was 39 percent.

One quarter of the non-aviation revenue at EPIA comes from commercial development.

“We’re very fortunate that we are situated on nearly 7,000 acres of land. El Paso, in terms of when it came to industrial development, they were really on the forefront. That’s what has helped us when it comes to keeping the costs down low for the airlines.”

That land includes the Southern Industrial Park, which is home to seven hotels and two restaurants and the Butterfield Industrial Park, designed for the manufacturing industry. EPIA also owns the award-winning Butterfield Trail Golf Course and has a land lease with Lone Star Golf Course.

EPIA has land leases with the manufacturing businesses situated in Butterfield Industrial Park. The Airport also takes revenue in from seven on-site hotels and two restaurants in the Southern Industrial Park.

The Airport currently has approximately $22 million in its unrestricted fund, which are used for airport operating costs. That’s enough to provide service for approximately 260 days.

Revenue Cannot Be Used for City’s General Fund

EPIA is a department of the City of El Paso, but that doesn’t mean it operates under the same budget.

“We operate outside the general fund,” Lombraña said. “We are an enterprise fund. We raise all our own revenue. We do not operate on any property taxes.”

The U.S. Congress established the use of airport revenues, which are regulated by the Federal Aviation Administration (FAA). Therefore, the use of airport revenue for purposes other than airport capital or operating costs, such as contributing to the city’s general fund, is prohibited by law. However, EPIA does reimburse the general fund for support services, such as legal, purchasing and accounting.

KVIA 2019

Article Topic Follows: El Paso

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