San Juan Airlines finds new Anacortes home
Successful airline owner starts small
by Dennis Connolly

In 1981 when Clyde Carlson started his first airline he flew one passenger.
He had nothing but an empty seat for the return trip.
These days are far different for Carlson, an airline entrepreneur who has amassed a fleet of small planes and a variety of routes in Puget Sound.
While his pilots have been staying busy flying passengers to their destinations, Carlson’s been busy at San Juan Airlines’ headquarters in Anacortes, adding office space to his hangar and organizing his growing airline.
When construction is finished, employees from Carlson’s Renton office will move in and San Juan Airlines will employ about 50 people, while flying passengers out of six terminal locations: Boeing Field, Bellingham, Anacortes, Port Angeles, Friday Harbor and Eastbound in the San Juan Islands.

More Skagit flights planned
Carlson is also planning on starting daily flight service between Skagit Regional Airport and the San Juan Islands. The move will likely boost the number of passengers San Juan Airlines flies to various destinations around the Sound every year. Right now the annual passenger tally sits at 50,000.
On a recent, chilly January morning, however, Carlson’s airline wasn’t flying anybody out of its headquarters at Anacortes Airport. A weekend snowstorm had covered the runways and he was unable to find a snowplow operator with the time or inclination to clear them.
Consequently, Carlson had some time to talk about his airline and aviation career.
Carlson said he decided to consolidate his airlines in Anacortes because the airport was already the headquarters for West Isle Air, an airline that serviced the San Juan Islands. He purchased West Isle in 2002.
Soon after, Carlson decided to move his accounting, reservations and some maintenance operations from Seattle locations to Anacortes.
Indeed, last year Carlson also moved to Anacortes, purchasing a home in the picturesque Skagit County city.

Consolidation key for Carlson
Consolidation might also describe Carlson’s course in the aviation business.
“Basically in the past there have been multiple airlines trying to service the market west of the mountains with all these small cities, populations under 100,000,” Carlson said. “And one by one, they’ve gone out of business.”
Eventually, more companies competing for air passengers in the smaller, finite markets thinned itself out.
“As these airlines like, Coastal, Harbor and Island have gone out of business, I’ve seen a need in all these communities to have this air service. My idea has been to combine them into one unique airline to service all these communities.”
When it comes to a long-term business strategy, Carlson is succinct:
“My strategy has been to put together a premier commuter air service and to make it affordable and profitable,” he said.

Success requires consistency
Consistency is another key to running a successful airline, Carlson added.
“If you have a direction, you have to stay with it,” he said. “If you are changing routes all the time people can’t rely on you. If they know they can catch six flights a day, seven days a week, from the San Juans, and it’s affordable, they eventually begin to trust and rely upon you.”
It’s a strategy that’s benefited the San Juan Islands and Skagit Valley according to one of Carlson’s more regular clients, San Juan resident, Realtor and Seattle radio legend, Pat O’Day.
“I travel to Seattle a great deal and they’re always on time and they fly great aircraft,” O’Day said. “Before Clyde got here flying to the San Juans could be worrisome and unpredictable but now I’m proud to tell people in Seattle to go to Boeing Field, get on one of their planes and in 27 minutes, they can be in Friday Harbor.”
The level of professionalism and service O’Day cites has been a hallmark of Carlson’s career since the early 1970s when he started Western Air Charters and started flying clients from Seattle’s Lake Union to resorts and fishing camps in Southeast Alaska aboard one of his DeHavilland Beaver float planes.

Building a fleet
In the three decades since, Carlson has sold and purchased four charter and commuter air service companies, amassed some 12,000 flight-hours and acquired a fleet of float and wheeled planes. He’s also flown thousands of people to and from Seattle, Renton, Port Angeles, Bellingham, Anacortes, the San Juans, British Columbia and Alaska.
Carlson started flying shortly after getting out of the Air Force in 1966.
Using money from the G.I. Bill, Carlson earned his private, then commercial pilot’s license.
Intrigued by float planes and their ability to fly into to remote locations, Carlson started Western Air Charters.
In 1980, Carlson bought Lake Union Air Service and inaugurated scheduled seaplane service to the San Juans.
Then in 1989, he started Northwest Seaplane Service out of Renton, primarily to transport people to British Columbia.
In 2000, after the Alaska Air Group lost interest and let its claim to the name San Juan Airlines expire with the Washington’s State Corporate Division, Carlson acquired the name and included his Northwest Seaplanes Inc. under the same corporate moniker.
In 2002, Carlson bought West Isle Air and combined the routes of his two airlines under the name San Juan Airlines. He was then able to link the San Juans and Seattle with Bellingham, Anacortes and Port Angeles, as well providing charter service throughout British Columbia.
He also improved the level of service according to long-time passenger, O’Day.
“His (Carlson’s) pilots are so disciplined and professional and the operation run so well that it’s brought a new level of air travel that we desperately needed on the islands.”
Stemming losses, finding profit
Carlson said that after the 9-11 terrorist attacks, aviation businesses suffered a drop in passengers, as well as a dramatic increase in new regulations. Still, he has persevered and hopes to see profits this year.
He spent more than $1 million to acquire West Isle Air and combine it with Northwest Seaplane Service. He spent another $2.5 million to purchase additional equipment and planes. The money was also used to finance taking over the Port Angeles route.
Carlson said he paid for the purchase and improvements with his own money, as well as bank loans.
Returns on his investment have been steady, but measured in diminishing losses.
In 2001, West Isle Air lost close to $600,000.
In the first six months of 2002 after Carlson took over, West Isle Air/San Juan Airlines lost $300,000. In the second six months the losses were down to $1,900. And in 2004, Carlson figures to show a profit even with the cost of moving parts of his operations from Renton and Seattle to Anacortes.
Carlson said he’s cultivated profitability by carefully tracking how many customers fly on each of his planes.
“I pay very close attention to load factor, how many passengers per run, the frequency of flights and by determining what routes people want to fly,” he said
By doing this sort of number crunching, Carlson’s also made flying more affordable.
“It used to be that you’d have to charter a plane to or from the San Juans and it could cost up to $500,” Carlson said. “Obviously not everyone can afford that. Now someone can make that flight for $75.”

Accounting challenges emerge
One of the biggest challenges for Carlson has been to simplify and update his accounting methods.
With airlines facing a host of new rules and regulations, Carlson said that relying on technology alone is not enough and he’s had to find ways to simplify business operations, while combining his airlines.
Another challenge for San Juan Airlines is finding passengers during the off-season, said marketing director Paul Hopkins.
“Summer takes care of itself but the shoulder seasons can be tough,” Hopkins said.
One obvious lure is lower prices. The airline has developed flight packages Hopkins feels are cost effective (fares range from $25-$75 one-way).
Hopkins said the airline has also developed an unpaid sales force, of sorts.
“For instance, the Rosario (Resort) would love people to come there in the winter and we want to fly them there,” Hopkins said. “And what could be easier than flying over there.”
Consequently Hopkins said, when people call Rosario and ask how to get there, San Juan Airlines gets promotional help at the reservation level.
“When they ask someone at the reservation desk what’s the best way to get to the Rosario and are told that San Juan Airlines can get them there in minutes instead of hours, it helps both the hotel and us. And gives the guests more time to enjoy their weekend,” Hopkins said.
“You can drive and face a three or four-hour commute one-way, or you can fly in from Boeing Field in 27 minutes,” Hopkins adds. “So instead of trying to get out of work early on Friday and fighting traffic to arrive after dark, you can leave work at 5 p.m., park at Boeing Field and be at the Rosario for an early dinner.”

Contractors, commuters and movie stars
Whether waiting for summer or a snowplow, San Juan Airlines stays busy flying commuters and weekenders over to the San Juans year round.
Business people are frequent flyers. So are contractors, lawyers and house hunters. Passenger lists are growing as more people discover that it’s worth their money to save hours on the road and waiting for a ferry.
With more people discovering the San Juans and building retirement and vacation homes there, the economy is changing, reflecting the many successful, urban escapees who are moving and vacationing there.
And that means quality airline service will likely play an even bigger role in the years to come.