Sunnier skies ahead for Horizon Air?

<p>U.S. airlines faced strong economic headwinds last year, with business and leisure travel down about 6 percent, according to industry analysts.</p><p>Horizon Air's Santa Rosa flights were no exception, carrying 9 percent fewer passengers in 2009.</p><p>But there were signs of a turnaround at the end of the year, and Horizon is looking for friendlier skies in 2010.</p><p>"We're cautiously optimistic," said Dan Russo, the airline's marketing director.</p><p>Horizon's Santa Rosa service saw a 4 percent increase in passengers in December, the most growth in nearly a year.</p><p>"We're seeing good demand going into the first quarter," Russo said.</p><p>Seattle-based Horizon operates five daily nonstops from Santa Rosa to Los Angeles, Seattle, Portland and Las Vegas. It carried just over 186,000 passengers to or from Santa Rosa last year, down from almost 205,000 in 2008, according to officials at Charles M. Schulz-Sonoma County Airport.</p><p>Horizon flights averaged 71 percent full in 2009, compared with 73 percent the year before.</p><p>Horizon's performance last year reflected the forces that have buffeted the U.S. air travel business for much of the decade.</p><p>Airlines lost $60 billion and shed 160,000 jobs over the past nine years, said John Heimlich, economist for Air Transport Association. Besides the recession, they faced soaring fuel costs, terror threats and increased regulation.</p><p>"It's hard to imagine the fundamentals getting much worse than they have been," he said.</p><p>As demand dropped, airlines were forced to cut fares to fill empty seats. They also trimmed flight schedules and dropped underperforming routes.</p><p>Still, an improving economy could mean growth in 2010, Heimlich said.</p><p>"Many airlines are reporting a steady upward trend in bookings going into the new year," Heimlich said.</p><p>Horizon Air isn't planning to add or drop destinations for its Santa Rosa flights in 2010, Russo said. But the carrier still is talking with airport officials about adding a daily flight from Santa Rosa to San Diego sometime in the future.</p><p>San Diego flights depend on the airport getting $900,000 from the U.S. Department of Transportation to subsidize Horizon's startup costs, said airport manager Jon Stout.</p><p>The county-owned airport is waiting for the federal agency to rule on its grant application, he said.</p><p>Meanwhile, the airport is in the middle of a $2 million expansion of its cramped passenger terminal. It will add 5,000 square feet of space, with more seating, extra room for security screening, an automated baggage system and digital displays of flight and security information.</p><p>The federal government is paying for most of the project, which will be finished in May. In addition, the airport will get an X-ray screening system for checked bags later this year, eliminating the need for hand inspection, Stout said.</p><p>The airport also is installing a vending machine for hats, T-shirts and other gifts featuring the airport's Snoopy mascot.</p><p>It's too soon to tell whether Horizon's December growth means a strong rebound in 2010, Stout said.</p><p>"It's a very good sign, but it's not enough to see a trend," he said.</p><p>Car rentals also were up at the end of 2009, although airport parking revenue remains soft, Stout said.</p><p>The Sonoma County Tourism Bureau is stepping up its campaign to promote Horizon in 2010, said Ken Fischang, the bureau's CEO. It has named a national sales manager to market Sonoma County's conference and meeting business in Los Angeles, Las Vegas and other southwest locations, he said.</p><p>"It's time to seize market share and promote Horizon in those key markets," Fischang said.</p><p>The bureau will spend about $1.5 million on Sonoma County destination advertising this year, with much of it aimed at Horizon's customer base, he said.</p><p>It's hard to predict how Horizon's Santa Rosa fares will shake out in 2010, Russo said. The airline cut some fares and offered vacation deals for leisure travelers last year to make up for the loss of business customers, he said.</p><p>"We had to work a little harder in 2009 because of the business downturn," he said. "We're looking for more of our business customers to come back."</p><p>Despite the drop in travel, the airline posted a $19 million profit last quarter, due largely to cost-cutting. Horizon, part of publicly held Alaska Air Group, lost $25 million during the same period in 2008.</p><p>You can reach Staff Writer Steve Hart at 521-5205 or steve.hart@pressdemocrat.com.</p>