NEW! City offers tax break to attract Frontier Airlines

Colorado Springs officials are using tax breaks to draw a Frontier Airlines maintenance facility to the local airport, where SkyWest Airlines recently opened a $20 million maintenance hangar for its planes.

Denver-based Frontier is expected to select from Colorado Springs and six other Front Range airports “in the next few weeks” for a maintenance hangar that could cost up to $40 million and employ 350 within two years, said Frontier spokesman Joe Hodas.

“Colorado Springs absolutely would be interested in hosting the Frontier facility,” said Mark Earle, the city’s aviation director. “If you look at the SkyWest facility, you can see what these types of facilities can do for both a city and an airline.”

Frontier’s facility would replace one it leases month-to-month from Continental Airlines; a long-term lease expired in February.

Frontier also has received bids for the facility from Denver International Airport, Front Range Airport in Watkins, Greeley-Weld County Airport, Loveland-Fort Collins Municipal Airport, Pueblo Memorial Airport and Rocky Mountain Metropolitan Airport in Broomfield, Hodas said.

The carrier has narrowed the bidders to three finalists, but Hodas declined to identify them. Frontier at first considered moving the hangar outside Colorado, but decided to keep the facility in the state because the 250 employees who work there don’t want to move out of state, he said.

“It is an economic equation for us — what is the most cost-effective to get what we need out of the facility, including the cost of the real estate, how far we would have to fly the planes to get there and what is best for our employees,” Hodas said.

The airport is putting together an incentive package that includes tax breaks that could be offered to any airline that wants to build a local maintenance facility, Earle said. All previous bids, including those for Frontier and SkyWest, have been developed specifically for individual projects, he said.

The Colorado Springs City Council tentatively agreed in 2004 to eliminate sales tax on aircraft-parts purchases totaling more than $2 million a year for SkyWest’s maintenance facility, said Elena Nuñez, the city’s economic development manager.

Final approval of SkyWest’s tax break is expected within two weeks, Nuñez said. SkyWest’s tax break also includes a reduced rate for purchases between $1 million and $2 million. The same tax break would be available to any airline maintenance facility, she said.

Frontier spends “many times” $2 million each year on parts for its maintenance facility, Hodas said.

A Frontier facility could be built in one of three areas: the west side of the airport near the SkyWest hangar and other maintenance facilities for airlines and private aircraft; on other sites near the airport’s business park; or south of Peterson Air Force Base, Earle said.

Mike Boyd, an Evergreen-based airline consultant, said Colorado Springs would be a good choice for Frontier’s facility because of its “solid work force, great quality of life” and proximity to Denver, Boyd said. “I don’t see any downside for Frontier and a lot of upside” if the carrier selects the Springs.

Boyd said Denver has “taxed this facility out” of the city because it doesn’t give tax breaks on parts. He said Denver “should have the inside track but can just forget those jobs because of its punitive tax system.”

If Frontier opens a maintenance facility here, the airline probably would begin flying commercial flights from here, as well, to get aircraft to the facility, Boyd said.

Frontier’s Hodas said service to Colorado Springs “is not related to the hangar but is one piece of the puzzle that might make Colorado Springs more viable.”

At Frontier’s facility, aircraft would undergo heavy maintenance — comprehensive checks, major repairs and gutting aircraft interiors — for the airline’s entire 60-jet fleet, Hodas said. A new facility would total 100,000 square feet and take 18 months to build, he said.

SkyWest employs about 90 at its 101,000-square-foot hangar at 1697 Aviation Way that provides overnight maintenance for up to 10 regional jets a day. The work includes completing a checklist of several hundred items involving mechanical, electrical and hydraulic systems.

The carrier sends aircraft to the Springs for maintenance mostly on flights it operates for Delta, Midwest and United, and on flights without passengers.

SkyWest’s local work force totals 370 people, including 80 customer service representatives at the airport and 200 on-flight crews based in the Springs. The carrier’s work force could eventually grow to 500, said Chip Childs, SkyWest’s president, last week.

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