Frontier cancels plan for maintenance hangar in Springs

Frontier Airlines has canceled plans to build a $55 million maintenance hangar at the Colorado Springs Airport, citing a reduced need for such services after it cuts the size of its aircraft fleet by nearly 18 percent by January.

The Denver-based carrier said Friday it will continue its five daily round-trip flights between the Springs and Denver on its Lynx Aviation commuter subsidiary, which began in April. Frontier is "very pleased with Colorado Springs as a destination for us," spokesman Steve Snyder said. The flights have operated with nearly 70 percent of the seats filled.

Frontier announced plans a year ago to build the 225-employee maintenance facility on the west side of the Springs airport, but put the project on hold after filing for U.S. Bankruptcy Court protection from its creditors in April.

The carrier won approval last week from the bankruptcy court to furlough its 129 heavy maintenance workers when they aren't needed and recall them as it has work available.

The court also said Frontier can outsource the work to a firm in El Salvador as a last resort.

Snyder said Frontier will continue to complete its heavy maintenance work in a hangar leased from Continental Airlines at Denver International Airport. Such work is done once every two years and includes a major overhaul for aircraft such as replacing engines.

"As part of the bankruptcy process, we had to look at every program in the company and cancel those that no longer make sense. Given the reduction in our fleet size and capacity, the maintenance facility in Colorado Springs no longer makes sense," Snyder said. "This move has nothing to do with the viability of Colorado Springs as a site for our maintenance facility. Hopefully, we can work on future projects with the city."

Mike Kazmierski, chief executive of the Colorado Springs Regional Economic Development Corp., wasn't surprised Frontier shelved the hangar project.

"We expect Frontier to continue being an important part of the air service in our community," Kazmierski said. "To us, the hangar was not nearly as important as the air service. We are thrilled to keep that service."

Frontier's decision will not affect the airport's 2009 budget because airport management did not include revenue from the maintenance facility for next year after Frontier put the project on hold, said Gisela Shanahan, the airport's assistant aviation director for finance and administration. The airport would have received rental fess on the hangar's site plus a small amount of landing fees if the project was completed, she said.

The biggest loss will be the $38 million annual boost the project would have given the Colorado Springs economy once the facility was operating at capacity, Shanahan said.

That estimate, from the Southern Colorado Economic Forum, included not only payroll and revenue paid to the airport, but also another 500 jobs from spending by the hangar's workers at retailers, car repair shops and other businesses.

The airport will continue marketing sites adjacent to its west runway for other maintenance hangars, Shanahan said. SkyWest Airlines, which operates flights to the Springs for both Delta Air Lines and United Airlines, has operated a 90-employee hangar on the airport's west side for overnight maintenance since August 2007.

As a result of canceling the hangar project, Frontier will not receive a rebate of personal property taxes on equipment in the hangar and an exemption from city sales tax on aircraft parts, two city incentives estimated at $300,000 a year.

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