Cheap carriers pay off at SFO

The number of passengers and the revenue they bring to San Francisco International Airport has increased dramatically since low-cost airlines such as Virgin America, JetBlue Airways and Southwest Airlines began service out of SFO less than a year ago.

SFO’s passenger base of 33.5 million grew by 6.5 percent from June to November, a big increase from the usual 2 percent annual growth, according to SFO’s finance director, Ben Kutnick. The airport expects an additional 3.5 million passengers by the summer, a significant 9 percent growth that will add $31.8 million to SFO’s budget, Kutnick said.

Earlier this week, the airport commission approved next year’s $658 million budget, which increased by 5 percent from last year’s. SFO spokesman Mike McCarron attributed the growth to the options offered by low-cost airlines.

“People are more likely to buy Virgin than United tickets because prices are more competitive,” he said. JetBlue Airways started flying out of SFO in May, followed by Virgin America and Southwest Airlines in August.

McCarron also said more people are taking advantage of the airport’s 340 weekly flights to Los Angeles, some of which cost less than $100 roundtrip.

“With $4 a gallon, it can be more cost-effective to fly than to drive,” he said. SFO is reconstructing its old international terminal, which has been vacant since 2000, to accommodate the expanding service by the three low-cost airlines. Domestic JetBlue and Virgin Airlines flights depart from the new international terminal because of a lack of available gates at the domestic terminal.

SFO hopes to convert the old international terminal into a new part of the domestic terminal by August 2010, adding 14 gates for domestic flights. Demolition of the old terminal is scheduled to begin in the next two months, McCarron said.

As the number of passengers grows at SFO, stores and restaurants are making more money, according to a report submitted this week to the airport commission.

SFO expects profits from concession sales to increase by 5 percent this year, Kutnick said.

svasilyuk@examiner.com

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