Alaska pushes for renewed role as global passenger hub

Sure, the aviation industry is hurting right now. But the airports of Alaska are thinking big about the future. The state wants to see its airport infrastructure eligible to serve as hubs for foreign airlines, boosting local tourism while also allowing for broader connections into the lower 48.

Airlines can use Alaska’s international airports today (mostly Anchorage) for the transit, transfer, and trans-shipment of international air cargo. This includes moving cargo between aircraft of the same carrier or even transferring it between carriers. There is no reason to believe the Department of Transportation will decline the requested extension of that permitted activity. But the State wants more.

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Specifically, Alaska is requesting that the DOT add passengers into the exemption, an amendment likely to draw ire from US-based airlines. In its filings Alaska claims this new policy will “help create important new economic opportunities for U.S. carriers” as they connect passengers in Alaska. Presumably to foreign carriers. Indeed, when United Airlines recently applied for permission to carry cargo from Hong Kong to Singapore the Ted Stevens Anchorage International Airport (ANC) objected, suggesting that the airline should use its US airport rather than a Fifth Freedom market as the connection point.

United (rightfully) dismissed that suggestion as counter to the goals of the HKG-SIN service and the DOT similarly saw that the Fifth Freedom flight made sense, granting the request.

But that filing from Anchorage Airport also called attention to the potential for more tourism traffic stopping en route to the mainland. While suggesting that Alaska is a strong candidate for increased tourism from Singapore owing to the latter’s “miserably hot and humid climate” might not win many awards for subtlety, the idea if bolstering the cargo demand with passenger traffic to help restore tourism numbers could be a compelling play.

Also key to the passenger transfer application, and to the existing cargo exemption, is that it applies as a blanket rule. Airlines need not apply individually for permission to take advantage off the relaxed rules. This helps keep cargo moving smoothly through Anchorage, and the State hopes for similar with passengers.

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A precedent from 5,000 miles away

In its application the State of Alaska cites a decision made by the DOT in April 2020 as precedent. The airports or Puerto Rico applied for similar relief and, following objections from several airlines and unions, received the waiver. In that ruling the DOT “recognized that air service is vitally important to Puerto Rico, and that it is heavily dependent on air transportation as a vital element of its economy.” The State of Alaska makes similar claims in its filings, hoping to secure a similar ruling.

Beyond the many rural communities that depend on local air traffic to remain connected to the rest of the country and the world, aviation plays an outsized role in the state’s economy. In its 2019 Aviation Annual Report the state notes that Alaska International Airports generate more than 26,000 jobs, with 10% of employment in Anchorage tied to the airport there. A change to the rules could “help Alaska’s economy as it tries to build strength in the face of the State’s ongoing recession.”

Assuming any airlines decide to give it a try, of course.

It remains unclear if any airlines will consider shifting their operations to establish passenger hub operations in Anchorage, connecting Asia to North America. After all, the efficiency of newer aircraft models make long, thin routes more attractive than mega hubs around the globe in many operating models. But everything is changing these days. Maybe a reversion to the ANC tech stop is just what airlines need to boost their traffic numbers in the coming years.