Brad Goskowicz knows all about experiments. He runs a 90-person St. Cloud company that takes pure bacteria strains such as salmonella and ships them around the world for food- and water-safety testing.
When he heads to a meeting in Vietnam this week, he’ll drive 80 miles to the Twin Cities, fly to Chicago and then — some six hours later, if he’s lucky — he’ll fly to Asia. Come May, the Microbiologics CEO can bypass the Twin Cities altogether on similar trips when he takes part in a different kind of experiment, according to airline industry analysts.
St. Cloud has pledged $1 million in revenue guarantees, convincing SkyWest Airlines there will be enough fliers to bring daily out-of-state flights for the first time to an airport that sat dormant for three years. SkyWest will start its St. Cloud service May 6 with two daily flights to Chicago.
Bill Swelbar, an airline industry analyst at Massachusetts Institute of Technology, sees an emerging trend in under-served communities making financial promises to woo carriers.
“I see more experiments like this one coming — and I call it an experiment because nothing is guaranteed,” Swelbar said. “But for smaller communities like St. Cloud that have suffered a loss of some or all of its service, this resumption is so good for them.”
Five years after Delta acquired Northwest Airlines and pulled the plug on service to airports such as St. Cloud’s, the state’s smaller airports might be poised for a comeback.
Duluth will add a fourth Chicago flight in June at an airport that opened a new $78 million terminal last year.
In Rochester, after five consecutive years of passenger declines amounting to a nearly 33 percent drop-off between 2007 to 2012, the number of total passengers inched up 4 percent last year.
Rochester owns its airport, but the Mayo Clinic has operated the facility for 80 years. A recent study revealed that only 12 percent of the 2,400 southern Minnesotans who fly daily use Rochester’s airport instead of driving up to the Twin Cities. But Rochester’s new airport manager, Marty Lenss, insists those numbers “show tremendous potential” for increasing what now stands at nine flights a day.
Even the state’s fourth and smallest international airport, up on the Canadian border in International Falls, landed $2 million in the governor’s bonding bill for a new terminal and customs clearing area. The current one, Mayor Bob Anderson said, is “the size of four telephone booths.”
He said celebrities such as Demi Moore like to clear customs in International Falls after over-the-pole flights to avoid attention. But when a Rolling Stones’ charter learned the terminal couldn’t accommodate their 50-member entourage, they landed elsewhere.
Minneapolis-St. Paul International Airport still dominates with 33 million travelers a year, more than 100 times the passenger count of the state’s No 2 airport, in Duluth.
“But airports are invaluable, significant economic drivers for the communities they serve,” said Tom Werner, executive director of the Duluth airport. “If you want to attract or retain jobs in your region, whether you’re in Duluth, Rochester or St. Cloud, those companies want the ability to connect via affordable, reliable air service, so airports are a huge piece of the attract strategy.”
Change in philosophies
St. Cloud Mayor Dave Kleis remembers the day in 2009 when Delta sent a representative up with grim news. They were done dealing with St. Cloud. For years, Northwest, or later Mesaba, would run six flights a day, puddle-jumpers that would stop in Thief River Falls, Bemidji, Brainerd, St. Cloud and then MSP.
“The philosophy was different,” Kleis said. “Northwest’s philosophy was to bring people to its hubs. Delta’s philosophy, I believe, was: ‘You’ll get to the hub because you have no choice.’ ”
For executives such as Goskowicz, who does nearly half his business overseas, that change became a costly inconvenience.
“I have to pay mileage both ways for my executives and salespeople,” he said. “Take that 160 miles and add $22 a day to park.”
Throw in a 90-minute drive, often exacerbated with traffic snarls, and another 90 minutes to get through airport security lines. And top that off with airfare to Chicago.
When SkyWest and United team up on $186 round-trip flights on 50-seat jets to O’Hare, Goskowicz and his workers can forget the driving, parking and waiting.
“Mileage will be 10 miles instead of 160, parking here is free and if you’re last in line, you’ll have 49 people ahead of you,” he said. “That’s the worst it will ever be, so you won’t need to be there an hour-and-a-half early.”
To lure SkyWest, St. Cloud had to offer $1 million in revenue guarantees that includes a $750,000 federal grant aimed at small airports trying to revive service.
“We were the poster child for extremely under-served airports,” said Bill Towle, the St. Cloud airport director.
When Delta pulled out Jan. 1, 2010, the airport had no regular flights for nearly three years until late 2012, when Allegiant Air started what is now three flights a week to Mesa, Ariz., and one to Florida.
St. Cloud, local businesses and surrounding counties have raised $100,000 of a pledged $250,000 toward the $1 million guarantee, including a bunch of waived fees that will keep SkyWest from paying terminal rent, landing charges and fuel tariffs.
“We hope we’ll never have to tap into that guarantee,” Kleis said. “But it helps the airline get past the apprehension of new service.”
But even he admits changing people’s travel patterns might take some time before this becomes profitable. “We might not be able to operate without a loss at the start until the word gets,” the mayor said.
Regional authority next?
Kleis said he’ll start pushing this spring for Sherburne, Benton and Stearns counties to enter into a cost-sharing regional authority with St. Cloud to maintain the airport. He says it’s a matter of fairness.
“We’ll consider it, but I’d make no assumptions what the outcome will be,” said Sherburne County Commissioner Felix Schmiesing, whose district includes the airport.
Stearns County Commissioner Leigh Lenzmeier, who leads a Northstar corridor oversight panel, dreams of a day when people along the rail line in Fridley, Coon Rapids, Anoka or Elk River could become part of a reverse commute.
First, the Northstar line would have to be extended to St. Cloud — a big if.
“Business travelers from Fridley … wouldn’t have to drive themselves nuts getting across the metro and paying astronomic parking fees,” he said. “They could hop on the train and fly out of here much cheaper.”
That scenario is a long way from becoming a reality. But Bob White, a retired St. Cloud finance executive, flew to his Arizona winter home recently on the Allegiant jet out of St. Cloud.
“I talk to the people on the plane and none are from St. Cloud,” he said. “They’re from Sauk Centre, Brainerd, Alexandria. Anyone coming through St. Cloud to get to the airport in the Twin Cities will start to realize want a boon this is.”