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For San Diego Businesses, the Sky Is What's Limiting

Eight years after voters rejected a new airport at Miramar, San Diego businesses are still clamoring for more international access.

It’s an argument that’s been made for decades: San Diego’s high-tech economy could soar with a larger airport with more international flights.

Nearly eight years ago, San Diego County voters rejected a proposal to move the region’s landlocked, single-runway airport to Miramar, forcing the San Diego County Regional Airport Authority to make due with its current perch between Point Loma and Banker’s Hill.

But that didn’t do much to stem the griping.

Lindbergh Field again emerged as a significant regional bottleneck in a survey of more than 350 companies and business leaders conducted to lay the groundwork for a regional global export plan released earlier this year.

Many San Diego companies that participated in the survey said they wanted to see more direct flights to international destinations to better connect the region to capital and customers around the world.

Their concerns speak to larger ones that still resonate with experts central to the 2006 debate over the airport’s future. At least some of them remain convinced that putting off the conversation about a new airport had costs for the local economy and business climate.

They say San Diego may be missing out on visitors and even businesses, particularly the high-tech and export-focused ones the region wants to boost.

Meanwhile, business leaders are focused on luring more international flights they say would help San Diego compete globally rather than on pushing for a new airport.

A 2012 Brookings Institution analysis found international travel more than doubled between 1990 and 2011 and high-tech companies are particularly eager to work with firms and investors around the globe.

“We need to make sure that other parts of the world where we want to do business are accessible to us and them,” Biocom CEO Joe Panetta told me. (Biocom is a group that represents the region’s life science industry.)

But some experts look back and see missed opportunities to make the region more accessible with a major international airport.

Michael Armstrong, former aviation program manager for the six-county planning agency Southern California Association of Governments, said some high-tech industry growth near Los Angeles and San Francisco is thanks to their thriving airports.

“High-tech companies like to locate around airports, particularly big airports with a lot of domestic and international flights,” Armstrong said. “Lindbergh Field, with its limited international profile, is going to have limited interest from high tech.”

Armstrong argues San Diego’s also missing out on tourism dollars from visitors flying into LAX for a business trip or pre-arranged tour who might spend more time and money in San Diego had they been able to fly direct.

“No one knew that the global economy was going to be as important as it is. You’re either prepared or you’re unprepared,” said Marney Cox, chief economist for the San Diego Association of Governments. “The region decided to be unprepared.”

But Airport Authority CEO Thella Bowens, who once supported the Miramar move, is now focused on making the most of what the San Diego already has with major upgrades such as additional gates, transportation infrastructure and more international flights.

“What we’re striving for at this airport is having adequate access for the companies that we have here and for the growth that we anticipate,” Bowens said.

She also said past predictions that San Diego’s airport capacity could reach capacity as early as 2015 are outdated. The Airport Authority now forecasts that the existing facilities, plus numerous upgrades, will keep Lindbergh Field viable until at least 2038.

Yet the drumbeat for more global access for San Diego continues.

San Diego offers fewer direct international flights than U.S. cities with similar populations or industries. It’s not a hub, a distinction that comes when an airline makes a city a destination point for flight transfers and flights.

Phoenix and Minneapolis, for example, each have 20 direct international flights, and Denver’s airport offers about two-dozen. San Diego offers nonstop flights to seven to eight foreign destinations, depending on the season. Most of those flights are to cities in Mexico.

 

The Brookings analysis revealed San Diego travelers were far less likely to catch a direct flight than other comparable regions.

 

The majority of San Diego-based passengers made a connection before jetting out of the U.S., which translates into lost productivity for business travelers.

Since the Brookings study, Lindbergh Field added a nonstop flight to London in June 2011 and a direct flight to Tokyo in late 2012.

Tokyo and London financiers are the top two sources of direct foreign investment in the region, according to Brookings.

Brown and the San Diego Regional Economic Development Corp. want to boost San Diego’s international flight offerings. Brown said he’s focused on luring a direct route to a Central or South American city because several San Diego companies are doing business there.

But many business travelers still drive to Los Angeles or Tijuana when they’re traveling out of the country.

The Airport Authority estimates about 752,000 potential San Diego-area passengers fly out of the much larger Los Angeles International Airport each year for international flights.

Sempra Energy travel administrator Jessica Davis, who leads the San Diego Business Travel Association, said LAX often offers lower-cost, more frequent direct flights that make the commute worth it.

Davis said many Sempra executives also fly out of Tijuana’s General Abelardo L. Rodríguez International Airport despite similar nonstop flights from Lindbergh Field to Mexican cities given the options and lower cost.

Photo by Sam Hodgson

Photo by Sam Hodgson

In one month alone, at least 15 Sempra executives used the Tijuana airport over San Diego International to fly to Mexico City, she said.

More San Diego-based business travelers could head south starting next year when the planned Cross Border Xpress bridge to Tijuana’s airport opens to travelers.

Davis said San Diego could stave off some of those losses by adding more direct international flights and aiming to better compete with hub airports such as Los Angeles or Denver.

Neither would be easy.

For one, nabbing more international flights is a chicken-and egg-conundrum.

Airlines add flights based on demand. They’re not eager to try one out and see if tickets sell.

They need to see success with the investments they’ve already made at an airport before they’ll consider additional ones, said Thella Bowens, president and CEO of the Airport Authority.

“The business community and everyone in San Diego needs to realize if we want to maintain the direct service that we have we must use it,” Bowens said. “The airlines are not going to be open to looking at service to additional markets until we can prove we can support the service we having. Supporting the service is using the service.”

San Diego’s single runway, the busiest in the nation, presents another challenge.

The runway is surrounded by two hills, which forces large, fuel-heavy aircraft used for international flights to quickly climb in order to safely make it out of the area.

“We are only looking to develop service here that San Diego can support. We’re not a hub market,” Bowens said. “We’re not sized for it. We have the cul-de-sac of the country.”

“You can’t expect to have long international flights if this is your airport of choice,” said San Marcos Mayor Jim Desmond, a Delta Airlines captain who sits on the Airport Authority board. “We’re really limited.”

New technologies have helped, though.

The Boeing 787 Dreamliner, for example, made the Japan Airlines flight to Tokyo viable after a decade of talks about adding a direct Tokyo flight to San Diego’s roster. The jet uses less fuel than similarly-sized aircraft, which allows it to climb more easily out of San Diego’s short runway and to the long flight.

That doesn’t erase questions about what might have been.

In November 2006, San Diego voters halted discussions about obtaining 3,000 acres at Marine Corps Air Station Miramar for a new airport with multiple runways amid opposition from military officials and nearby residents.

UC San Diego political science professor Steve Erie, who studied potential airport contingency plans a decade ago, is certain San Diego’s airport will one day reach its limit and force the region to make big decisions about global connectivity.

“We’re living on borrowed time with Lindbergh Field,” Erie said. “Now we’ll have a little Hamburger Helper in terms of access to Tijuana’s airport (but) this is absolutely a ceiling on our economic development possibilities.”

This is part of our quest  digging into the difficulties – real or perceived – of doing business in San Diego. Check out the previous story in our series, Business Backers to San Diego: California’s Dragging You Down, and the next, Why Some Companies Land in San Diego.

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