Economic woes affect Oakland airport

June 2, 2008 7:17:03 PM PDT
The sluggish economy is taking its toll on the Oakland airport. It's number two on the list of large U.S. airports with big losses, second only to Honolulu. It's owned and operated by the port of Oakland which says staff cuts are a certainty.

Earlier this year, Oakland international lost three airlines to bankruptcy all in one week -- ATA, Aloha and Skybus.

Hawaiian Air has moved in, but now American Airlines is pulling out of Oakland beginning in September.

"It's hugely symbolic for us. American has been with us since 1947 and it's been a great airline and we're very sad to see them go," said Rosemary Barnes from Oakland International Airport.

The official airline guide says with projected passenger traffic losses through October, Oakland is down 20 percent since last year, putting it at number two among the hardest hit large U.S. airports, after Honolulu and ahead of Kansas City.

"We are going through some tough times now," said Barnes.

The losses at the airport are contributing to a budget crisis for the Port of Oakland, which owns and operates the airport, the port and commercial real estate at Jack London Square.

A projected $18.6 million shortfall will mean 60 to 70 jobs cut from its staff of 600.

"We've done a lot of different things already to reduce our expenses, but unfortunately its not enough to avoid layoffs so even though it's not something we want to do it's something that we're going to have to do," said Port of Oakland spokeswoman Marilyn Sandifur.

Sandifur says a decline in imports, heavy debt and new environmental rules are also raising expenses that are growing faster than revenue.

"Tuesday the Board of Port Commissioners will be looking at an agenda item related to the Warren Act and this is an act that notifies if you have a certain number of layoffs coming that you let your employees know that's coming," said Sandifur.

The airport is adjusting by scaling back on the schedule for renovation and retrofitting of terminal number two, and has shelved plans for a third terminal.

"A few years ago forecasts clearly showed Oakland Airport would continue to grow and that we needed to continue to grow capacity. Those forecasts have changed," said Barnes.

The port's final budget decisions will be made in mid-July.


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