Airlines shrug at costs from San Jose building policy

Airlines hardly notice the financial losses caused by a San Jose policy to raise building height limits in the flight path of some planes.

Multiple airlines told San José Spotlight that their operations have not been affected by a 2019 city policy that raised the height limits for buildings downtown and in the Diridon Station Area. The policy could force some planes to fly with a reduced passenger load and cost airlines an estimated $2.8 million in combined annual revenue, according to a recent city report.

Losses could incentivize airlines to leave San Jose, putting additional stress on an airport that already saw a significant drop in passengers due to the pandemic. So far those financial losses have not affected the carriers.

Spokespersons for Hawaiian and United airlines said the policy hasn’t impacted their operations at Mineta San Jose International Airport. A representative for Lufthansa said the airline suspended its San Jose route in late 2018 because it wasn’t economically viable.

Morgan Durrant, spokesperson for Delta Airlines, said officials told the company earlier this year about the potential impact to aircraft operational performance given nearby construction.

“We have not had to make any adjustments to aircraft performance or enact any weight and balance restrictions,” Durrant said, adding that’s due to a variety of factors, including the airline’s current schedule.

According to airport spokesperson Keonnis Taylor, Hainan and Frontier airlines ceased service in February 2020 and August 2021, respectively. Air Canada, British Airways and All Nippon Airways are on hold due to the COVID-19 pandemic. Taylor said the reinstatement of these airlines will depend on the recovery of international travel.

The airport has lost several routes since January 2019, including Air Canada to Vancouver, British Airways to London and Delta Airlines to Detroit, JFK in New York and Las Vegas, while adding routes for Alaska Airlines, Southwest and Volaris.

“Due to our strong financial position, federal assistance and support from our airline partners, we have been able to weather the storm caused by lower revenues and traffic during the pandemic,” Taylor said. “Airport funding is also backstopped by the airlines through fees for space that they rent at the airport, so much of our revenue is guaranteed.”

Dan Connolly, chair of the San Jose Airport Commission, warned the city about the potential costs of the policy. He told San José Spotlight that long-term contracts may keep some airlines bound to the airport. But he suggested some airlines may simply shift routes to other airports if the height limits policy starts to affect their bottom line. Connolly said he was speaking in his personal capacity.

“I think it is too early to know the real impact and I would be surprised if airlines are already looking to leave or cancel routes, as it will be a year or two potentially before I think construction cranes will pierce that airspace,” Connolly said.

The San Jose City Council agreed last month to charge developers a fee for using cranes in the city’s flight path that exceed building height limits. This money will be used to compensate airlines forced to reduce passenger loads to comply with Federal Aviation Administration guidelines.

Developers and business groups that support the building height policy also want to see the airport grow, which they see as a key economic hub for San Jose. Jason Baker, senior vice president of transportation, health and housing for Silicon Valley Leadership Group, said his organization has had some success over the years encouraging the airport to establish flight routes popular with business customers.

A critical part of the strategy for drawing people to San Jose is to reiterate the airport’s advantages, he said, with San Francisco and Oakland airports competing for the same business.

“In part it’s reminding people what a great airport San Jose is,” Baker said, noting flights aren’t delayed by fog. “Especially right now, when people are anxious to fly and get back to both business and leisure travel, just reminding people what a terrific asset we have would go a long way.”

Contact Eli Wolfe at [email protected] or @EliWolfe4 on Twitter.