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Things are taking off at PDX

Business is on the rise at Portland International Airport

With the Great Recession and 9/11 fading in the rear view mirror, Vince Granato sees business growth gaining altitude at Portland International Airport where passenger traffic has reached a six-year high.

As chief operating officer Granato, 51, is part of top management at the Port of Portland, which runs the airport along with marine terminals. Annual airport revenue of $186.7 million represents nearly 80 percent of all port operations. That makes PDX one of the region’s major economic assets, supporting more than 16,500 direct and indirect jobs.

Driving expansion is economic recovery in Oregon and Washington as well as something lacking, until recently…profitability in the airline industry, Granato said.

“Air traffic is really all about the regional economy,” he said. “We went through a period when people just weren’t sure about their own employment. The decline was much steeper than the ascent…meanwhile, airlines have found a (business) model that works. I give them credit for that,” he said.

Last year, PDX saw a record 15 million passengers pass through its terminal. That beat the old record of 14.7 million set in 2007. Granato expects the airport to reach a new record this year, up another 3 to 4 percent, which translates into an additional 450,000 to 600,000 arrivals and departures.

“As the recession eased we saw business travel return a bit faster than the leisure market… now there are gains across the board,” Granato said. “People are feeling more confident about their futures. That’s what guides traffic.”

Last October, Travel+Leisure magazine gave PDX a boost by rating it as the nation’s No. 1 best airport for its combination of passengers services, food and shopping options.

Last year, net airport income topped $25 million with the money, as required by law, going back into airport capital projects.

Evolving industry

PDX continues to evolve along with advances in technology and security systems as well as how air carriers tweak routes, plane capacity and airfares, Granato said. Here’s what’s happening:

-This year, PDX expects airlines to start nonstop service from Portland to several new destinations – St. Louis, Chicago, Salt Lake City, San Diego and Austin, Tex. among them. Others are looking, Granato said.

“Despite higher air fares, people need to go where they need to go,” he said. “We are the smallest airport in the nation with nonstop service to both Asia and Europe. That accessibility has value.”

To make up for higher fares and baggage fees, airlines are offering onboard wi-fi, better on-time service and flight management. There are choices in the market that will keep airlines on their toes, Granato said.

“There’s no food on airplanes any more but that’s where the airport comes in,” he said. “This is a great opportunity for our local food concessions.”

Security measures since 9/11 have changed where travelers spend time and money in airports, he said, with some 73 percent of food purchases and shopping now occurring “post-security.”

That’s why PDX will continue to add more food outlets along its main concourses with more breakfast places and more menu variety.

“We want to reflect Portland’s food culture with more of a neighborhood feel,” Granato said. Vancouver, (Wash.)-based Burgerville opens at PDX by fall. PDX recently put out a request for proposals.

- Passenger processing continues to change as the Transportation Security Administration evaluates expansion of a “risk-based” passenger profile model meant to streamline the security process for certain travelers: flight crews, children under 12, those over 70 and those willing to sign-up for a TSA database pre-check option. by: TRIBUNE PHOTO: JAIME VALDEZ - Vince Granato who is the chief operating officer with Portland International Airport stands in the concourse where local named shops are located.PDX hopes to move 50 percent of passengers into the pre-check program this year.

- PDX will replace its much loved azure blue-green carpet with similar carpet this year. The $12 million project will be done in phases and eventually replace 14 acres of carpet.

“We know our community has a passion for the airport, the carpet really means something to them,” Granato said. “People take selfies of their feet on this carpet. We think people will really like the new version,” he said.

- With more travelers using technology to print boarding passes at home and carrying their own bags to avoid fees, the airport’s ticket counter is under-utilized, Granato observed. “We are working with the airlines to determine their future needs and how we move people through the building,” he said.

- As passenger traffic moves into new record territory, PDX is poised to generate more revenue from a variety of sources. Last year, passenger facility charges produced $30 million in non-operating revenue. In addition, the airport received FAA grants worth $22 million.

Fifty-percent of operating revenue came from airline terminal rents and landing fees with about 25 percent from parking operations and 18 percent from concession leases for food, beverage and retail operators as well as rental car companies. Another 7 percent is the result of cargo facility leases, ground leases and hotels. No port tax dollars go to support the airport, Ganato emphasized. “All our revenue comes from the airlines and from passengers. That money is reinvested back to the airport.”

- Despite expected increases in passenger traffic, Granato sees only moderate growth of 1 to 2 percent in the airport’s work force. “It’s not like the footprint is going to get larger,” he said. “With more flights we could see more flight attendants working out of Portland and some growth related to new concessions.”

Granato, who has been part of the Port of Portland management team for more than 26 years, says there’s little that keeps him up at night.

“If there’s anything, it would be a shock to the system…a terrorist event, an economic downturn that is outside of our control,” he said.

He describes PDX as its own “little city” with a fire and police department along with thousands of workers.

“Even in bad weather, this place runs well,” he said.