Layoffs and shop closures hit Seattle and Portland airports, terminal expansions continue

Aug 4, 2020

The recovery in airline travel seems to have hit a plateau in recent weeks, according to Transportation Security Administration checkpoint screening numbers. With the end of coronavirus pandemic seemingly beyond the horizon, the near future is turning grim for workers in the airline and airports sector.

Multiple airport tenants in Seattle and Portland issued layoff notices in the past week. But in a possible sign of optimism over the long term, the Pacific Northwest's major airport operators, the ports of Seattle and Portland, are continuing with big budget construction projects.

Seattle-Tacoma International Airport has $1.5 billion worth of terminal expansions and upgrades underway that are proceeding apace. Portland International Airport (PDX) just opened a new concourse with six new gates, which Southwest Airlines moved into last month. Inside the extended E Concourse, six of the ten new retail spaces remain shuttered because of the travel slowdown.

The Port of Portland is pushing ahead with additional construction plans amid the pandemic. A $2 billion plan of airport improvements, dubbed "PDX Next," includes a rebuild of the main terminal, expanded security checkpoint, a dedicated center for rideshare pickups and more close-in spots for parking and car rentals. The construction timeline stretches to 2025.

"We started the PDX Next program to upgrade outdated facilities, make PDX more seismically resilient and prepare for growth in our region," the port says on its project website. "Those needs have not changed."

The Port of Portland cut the ribbon on a major terminal expansion in mid-July. The new extended Concourse E added six gates to PDX.
Credit Port of Portland

What has changed is the outlook for travel in the near term as long as pandemic fears keep air passengers at home. The steep drop in passenger counts is spurring layoff warnings by airlines and immediate reductions by airport concessionaires.

Airport newsstand and gift shop operator Hudson Group announced layoffs on Friday, including 91 workers at Sea-Tac and a smaller number in Portland. Hudson said passenger volumes in July were running around 75% below the same weeks last summer.

“The COVID-19 pandemic has had an unprecedented impact on world travel, and a corresponding impact on our travel retail business," said Hudson CEO Roger Fordyce in a news release announcing the nationwide layoffs and a sharp swing from profit to loss in the second quarter. "While we took proactive and targeted actions beginning in March to significantly reduce expenses across the Company, we determined that more structural and wide-ranging actions were necessary."

A beloved Portland institution, Powell's Books, announced last week that it was permanently closing its airport location and kiosk, effective immediately. Its landmark downtown Portland book paradise is not affected by this decision.

"Closing the airport store is a sad necessity as we face the months ahead," said Powell's owner and CEO Emily Powell in a statement. "We hope to return one day."

During the height of the global pandemic, two-thirds of the dining and retail tenants at Sea-Tac Airport temporarily closed due to the decline in air travel. Currently, 72% of shops and cafes are back open as passenger volumes rebound, said Sea-Tac Airport spokesman Perry Cooper.

The Port of Seattle gave airport dining and retail tenants a break on rent and fees for the rest of 2020 to help them stay afloat. Now, major airlines are asking for relief too.

At Portland International, the airport's COVID-19 web page lists 36 shops and restaurants as open and 19 temporarily still closed. The Port of Portland extended rent relief to airport food and retail tenants through June 30.

Alaska, Delta, United, American and Hawaiian airlines all signaled hard times lie ahead when their federal pandemic payroll support expires on September 30.

Seattle-based Alaska Airlines sent layoff warnings to about 20% of its Pacific Northwest workforce last week. Nearly 1,600 positions are slated for elimination in the Seattle area according to a required notice filed with the Washington State Employment Security Department. Alaska Airlines said it sent layoff notices to 277 workers at PDX, mostly customer service agents, flight attendants and maintenance technicians.

Alaska Airlines spokesperson Cailee Olsen predicted in an email Tuesday that not every employee who received a warning notice will ultimately be laid off in the fall because of voluntary leave incentives that remain on offer and further operational adjustments.

"We were able to prevent involuntary pilot furloughs through a combination of voluntary leaves and early outs, which allow us to keep all of our pilots employed beyond Sept. 30, either as an active pilot or on a leave at a reduced rate of pay and with full health-care benefits," Olson said.

United Airlines notified the state of Oregon last Thursday that it expects to make 122 job cuts at Portland International Airport in October.

"Based on current demand, while we are hopeful the reductions for our frontline team members will be temporary, we presently anticipate that they will last six months or longer," said Kate Gebo, United's executive vice president for human resources and labor relations, in a notification letter.

The North Satellite modernization is one of several expensive construction projects at Seattle-Tacoma International Airport proceeding full-steam ahead.
Credit Port of Seattle

Sea-Tac Airport took advantage of the downturn in travel to accelerate several construction projects. It was able to complete an airport ramp paving project faster this spring because there were fewer plane movements to accommodate. Spokesman Cooper said some sequences in the big budget expansion and modernization of the North Satellite gates and the build out of a new International Arrivals Facility were also accelerated.

Separately, a state commission tasked with finding a location for a second major airport to serve the Puget Sound region after Sea-Tac reaches capacity continues to meet. The Commercial Aviation Coordinating Commission aims to come up with a short list of six potential locations by late this year. It will winnow the list next year before submitting a final recommendation to the 2022 Washington Legislature. The commission members are looking far beyond the current pandemic, toward air travel demand 15 to 20 years from now.