–In ten years, Sea-Tac has grown from the 16th busiest airport in the U.S. to the 8th busiest.
–Since 2009 Sea-Tac has had the nation’s fastest growth in domestic passenger volume
–Sea-Tac’s growth has been driven more by domestic growth than international growth
The federal corona virus relief bill provides tens of billions of dollars in grants and loans to airlines, as they deal with the collapse of their markets.
It also provides $10 billion to help the nation’s airports, which rely on operating revenue that is dropping fast as flights and passengers disappear. The funds are allocated according to a complex formula, but if Sea-Tac gets a share proportional to its passenger volume, it would receive about $255 million. Sea-Tac’s 2020 budget includes about $1.3 billion in cash requirements for operations and debt service, so it will be nail-biting time at the Port of Seattle.
Airports are a bigger economic deal than might be obvious, and activity at the airport will slow down as much or more than the airlines themselves. The Port of Seattle’s 2018 economic impact analysis found 17,100 direct jobs providing services at Seattle-Tacoma International Airport (Sea-Tac), and another 2,000 involved in construction projects.
While the relief will allow many more airline employees to keep their jobs and will go a long way toward protecting the Port from financial harm, it still misses a lot of the pain. Most people working at the airport do not work directly for airlines or the Port, but rather worker with on-site vendors, transportation services or contract services. Fewer passengers and planes means less need for food service, baggage handling or shuttle services. Nearby hotels will be empty. General federal relief will extend to these workers, but recovery for the airport could be much longer than the higher benefits will support.
Big Employer, Big Risk
Worries about Sea-Tac should be larger because it has grown so much: our hometown tarmac has been getting very busy. Understanding where this growth has come from might provide some hints about how long it will take for activity at Sea-Tac to bounce back.
By passenger volume, Sea-Tac is now the eighth busiest airport in the country, serving a metro area that is the fifteenth largest. Figure 1 shows the 25 busiest airports in the country by enplanements, in 2009 and 2019. Sea-Tac grew from the fifteenth busiest airport to the eighth busiest. (The U.S. Department of Transportation provides uniform data on “enplanements,” defined as one person boarding a plane. Each transfer counts as a unique enplanement. Some Port of Seattle data counts both enplanements and deplanements, so will show roughly twice the passenger count as the data in this story.)
This high ranking is curious, since Sea-Tac is busier than airports in other larger single-airport markets, like Boston and Phoenix, and airports in markets with huge tourist draws, like Las Vegas and Orlando. And being in the upper corner of the country, Sea-Tac will never be a domestic hub, like Denver or Atlanta.
Is international traffic driving growth? Sea-Tac is well positioned for trans-Pacific flights, being the closest West Coast airport to Asian cities. International traffic has expanded, but is not producing the bulk of Sea-Tac’s growth: less than 20 percent of the growth in enplanements since 2009 has been international. Figures 2 and 3 show the rankings for the 25 largest airports for domestic and international service, and Sea-Tac is not among the largest in international traffic. International service is heavily concentrated in a handful of airports. The ten largest airports for domestic service account for 36 percent of passenger traffic, while the ten largest airports for international service account for 69 percent of international boardings.
Figure 4 puts Sea-Tac’s position into some perspective. It shows the domestic and international share of passenger traffic for the 15 busiest airports for total traffic. It is notable that international traffic is just not that large a component for Sea-Tac.
Growth at Sea-Tac has been driven by domestic flights. Figure 5 shows the 10 year growth ranking for the 25 busiest airports as of 2019. Sea-Tac was the fastest growing airport for domestic service but only the seventh fastest growing for international service.
So where has all this growth come from? We can start with the simple idea of wealth. The Seattle region is an increasingly wealthy place, and everywhere in the world, travel demand grows with wealth.
Two places to look next: tourism and technology. For expansion in the visitor industry we can look at the cruise ship business, which has seen healthy growth in the past decade. The Port of Seattle estimates that 1.2 million cruise ship passengers departed from Seattle in 2019, 90 percent of whom came from outside Washington. Nearly all of the outside passengers will fly to Seattle, so well over one million enplanements from Sea-Tac will consist of cruise ship passengers returning home.
The growth in employment in technology firms in the Seattle area has been phenomenal. A part of that growth consists of branch operations of firms based largely in Silicon Valley, and employees of these firms will be expected to travel to the mother ship with some regularity. The expansion of Delta’s presence in Seattle and its service/price competition with Alaska has made West Coast travel easy and cost effective for these firms. Global firms like Amazon, Microsoft, Boeing and Costco will all require a certain amount of coming and going. And these firms attract a huge number of younger people from around the country who want to fly home on occasion.
Both of these sources of passenger traffic through Sea-Tac are at serious risk in the coronavirus crisis. The Washington and California lockdowns mean that few people will travel back and forth for business. This should ease in the coming months, but the pace of return to normal is unknown. The 2020 cruise season is highly uncertain. While virus spread may slow by the summer, passengers may be less willing to take a chance on close proximity to thousands of potential disease vectors.
It would be reasonable to expect that international traffic will recover more slowly than domestic traffic, so Sea-Tac’s lower reliance on international business should work in its favor.
Looking ahead
Sea-Tac has been in an almost continual expansion mode for the past two decades, with major terminal expansions, the third runway and Sound Transit all making appearances. Yet the degree of growth Sea-Tac has experiences was not envisioned in the 1990s. Airports are multi-modal facilities where people transfer between ground transportation and aircraft, so keeping up with growth means more than just adding space for planes, but paying attention to other infrastructure in the area.
Many of the jobs at Sea-Tac that have been furloughed require some level of skill and training, and all employees within the airport require security screenings. It is critical that systems be in place to recall these valuable workers when airport operations ramp back up.
Questions going forward are:
- How long will it take for traffic to recover from the coronavirus slowdown, and can Sea-Tac use the breathing space to speed improvements?
- Will the drop-off in operating revenue from the slowdown cause major financial problems for Sea-Tac?
- Will Snohomish County be able to raise the ceiling on allowable flights from Paine Field?
- Will discussions of a new airport somewhere in the region get any traction?
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