Anchorage Airport Switches From Duty-Free to Cargo

A FAST and furious Christmas comes every day to Anchorage International Airport. While jetliners touch down for refueling during their transpolar flights to Asia from Europe or the US East Coast, free-spending international passengers cruise the glittery, two-story, 6,000-square-foot Duty Free shop.

Dwarfing nearly all other national duty-free shops, the airport's store is Alaska's top-grossing retailer. Concession fees from Duty Free and other retailers and fees for landing, fueling, and airfield services bring some $55 million a year to the state Department of Transportation.

But glasnost, skyrocketing fuel prices, aircraft technology, and a volcano have teamed up to drive the international passenger carriers out of the polar route and this airport. International passenger totals have dipped by nearly a fourth from 1989 to 1990 - from 1.58 million to 1.22 million.

The cold war's end put the biggest chill yet on passenger traffic. A year ago, the Soviets began to open Siberian airspace as an alternative to the polar path. For international carriers traveling between Europe and Asia, the Siberia route cuts four to five hours and tens of thousands of dollars of fuel costs from each flight.

Now, airport officials say, with fuel price hikes stemming from the Persian Gulf crisis, the Siberian route is proving irresistible to any carrier able to slice through Soviet red tape. Carriers reducing Anchorage stops include Japan Air Lines, Korean Air Lines (KAL), SAS Scandinavia Airlines, Air France, British Airways, Swissair, and KLM Royal Dutch Airlines. Lufthansa and Sabena have pulled out of Anchorage completely in favor of the quicker route.

It is quite a turnaround from the icy atmosphere of 1983, when Seoul-bound KAL Flight 007 that refueled in Anchorage was shot down after wandering into Siberian airspace. ``I never thought I'd live to see the day,'' admits Anchorage-based KAL sales manager Frances Walker, who in the past year saw her airline divert all nine of its weekly roundtrip Europe-Asia flights from Anchorage to Siberian airspace.

The rumbling Redoubt Volcano, 110 miles southwest of Anchorage, also helped prompt the Siberian switch. In December 1989, shortly after Redoubt blew, the Soviets opened their airspace.

For Alaskans, the silver lining is the growing international cargo trade at this airport, already the nation's top cargo handler. ``The air cargo business has boomed,'' says Anders Westman, marketing manager for the Alaska international airport system. ``That's really what has made this a lot easier to swallow.''

An estimated 8.2 billion pounds of landed cargo moved through the Anchorage airport in 1990, up from the 7.13 billion pounds two years earlier, Mr. Westman said.

Federal Express and United Parcel Service (UPS) spent a total of $15 million building new international cargo centers just up the street from the international passenger terminal here. The companies have hired some 900 workers between them and plan more growth soon at their Anchorage centers. Other international carriers, like KAL, which runs 44 cargo flights a week through here, are contributing to the boom.

For the cargo carriers, it's more profitable to carry revenue-generating packages through Anchorage than flight-shortening fuel over Siberia. ``The cargo doesn't really care if it's nonstop or not,'' says Scott Hawkins, president of the Anchorage Economic Development Corporation. It's also convenient for them to combine refueling with package sorting and distribution services at a spot equidistant from the continental United States, the Far East, and Europe.

Eventually, cargo handling and its spinoff industries could contribute more to Alaska's economy than international passenger traffic ever did, Mr. Westman and Mr. Hawkins say.

``The big unspoken question is, will UPS and Fed Ex be able to break into that international marketplace to the degree that they want to?'' Hawkins explains. ``Assuming that they can, I think we could see that to be the largest employer in Anchorage in 10 years.''

Alaskans are optimistic, too, about flight service between the former czarist colony once known as ``Russian America'' and the resource-rich Soviet Far East.

The budding tourist trade between Alaska and eastern Siberia, pioneered by Bering Air, a small Nome-based carrier that in 1989 began charter flights into nearby Provideniya and Magadan, got a boost when Alaska Airlines won the sole US license for commercial trans-Pacific travel to the Soviet Union. This summer, Alaska Airlines plans flights from Anchorage to Magadan and Khabarovsk. The carrier portrays its Soviet Far East tours as exotic vacations. ``This year, 4,000 nonconformists will be sent to Siberia,'' say its advertisements.

Anchorage-based Northern Air Cargo (NAC) last fall got federal approval to be the sole US cargo carrier over the Bering Strait.

To Hawkins, the warm winds from across the Bering Strait that blew away international passenger flights can also bring new opportunities to this airport. He envisions raw Siberian products being shipped here for finishing and delivery to markets, and Alaska-based oil and oil field-service companies, who ``wrote the book on northern climate oil field development,'' managing and supplying Siberian oil development from Anchorage.

``What Anchorage can be is a gateway to the industrial world for the Soviet Far East,'' he says.