The inaugural flight between Denver and Tokyo takes to the skies Monday, ferrying with it the vision and aspirations of a region that has worked nearly 27 years to create a direct link between its Middle America location and Asia’s economic opportunities.
Clutching to their visions of a cowtown-turned-global city, regional and city leaders overcame years of challenges in pursuit of the flight — including the recent high-profile mechanical problems with the 787 aircraft that is crucial for the route’s financial viability. Yet the hard work is just beginning as economic development and political leaders try to amass enough business and leisure travelers to sustain the flight long-term.
“It is a seminal moment in our economic development,” said Tom Clark, CEO of Metro Denver Economic Development Corp. “It just shows you the ribbon of a business community that stays in these really, really tough deals together. We knew that the only way we are going to compete globally was to get to Japan.”
A Colorado delegation of about 70 business, education and civic leaders — including Denver Mayor Michael Hancock, Denver International Airport’s manager of aviation Kim Day and Colorado Tourism Office director Al White — will be headed to Tokyo June 10 and 11.
Clark said that they are intentionally trying to make a splash when they arrive in order to shore up interest that will be crucial to the flight’s success.
Airport and city officials have long recognized the difficulty in transforming Denver’s image from an flyover city somewhere between Los Angeles and New York into a globally recognized destination.
Denver’s leaders believe the region has all of the ingredients to be an emerging economy, except serious international connectivity.
“We are playing way above our grade,” Clark said. “We saw (in the 1980s) the way the world was going. It was going to be a global economy. And we don’t have a water port, you get one shot, and I think we beat that drum forever. And eventually it becomes the thought process in Colorado that we have to do this.”
Asia as a whole presents huge growth opportunities, and Tokyo is seen as Denver’s gateway to an entire region of the globe, including Seoul, South Korea where some of the delegates on the inaugural flight are visiting immediately after the Tokyo visit. However, Clark said Japan is the first and foremost market for Denver and Colorado to explore.
“Yes, it is the gateway, but the real opportunity for us is Japan. Rule of law, stable politics, the changing energy policy,” he said, adding that mid-size Japanese companies, carrying 30 percent of their assets in cash, are their target.
The Japanese value consistent, long-term business relationships, Clark said, and after decades of experience, Colorado has proven itself worthy.
“We botched the relationship a couple of times … but we’ve gotten better over time,” Clark said. “One of the guys at Narita (airport) said, ‘It is kind of nice that somebody sees us as a market and remembers that we are the third-largest economy in the world.'”
Clark saw the importance of direct access for businesses with, or looking to have, a global reach nearly three decades ago when he made his first phone call in pursuit of the flight. Current research shows his vision was on target.
According to a U.S. Travel Association study, international passenger growth in and out of the U.S. more than doubled between 1990 and 2011, a rate that is more than double the growth of domestic passengers. Additionally, the study found that for every U.S. dollar that a company invests in business travel, it will see $9.50 in new revenue.
IHS, a business-information-service company, has its global headquarters in Douglas County with another 140 offices scattered throughout nine countries. It employs about 1,000 people. Maintaining major operations in Singapore, Beijing, Shanghai and Seoul, the company sees huge potential with a connection through Tokyo.
“Like anything else, a particular location becomes a lot more attractive for a company looking to expand into some U.S. city if there is an easily accessible gateway,”said Jane Okun Bomba, chief sustainability and communications officer at IHS. “It is a very big business enabler, and I think it is a negative when an asset like a direct flight doesn’t exist because it just makes it more difficult.”
IHS and other Colorado companies with global networks have been vocal supporters of the Tokyo route, but there are a number of smaller, fast-growing companies that highlight the flight’s true opportunities.
GNIP is a Boulder-based company that commercializes public social data for clients, such as Twitter, Tumblr and Foursquare. The company now employs 68 people, doubled in size compared with last year and recently moved office spaces in downtown Boulder, tripling its square-footage.
“(The flight) will definitely impact us,” GNIP CEO Jud Valeski said. “Being where we are here in the Denver area is great, but getting to Asia requires a hop to the coast, requiring a layover and then another trip to Japan … it is an excruciating ordeal. Nonstop flights completely change that.”
The company’s clients span the globe, including several new clients in Japan and Asia.
Valeski said Asian markets in general are important to the company because they have huge populations, and the industry activity there has immense crossover with what GNIP does.
The company was anticipating the flight prior to the recent troubles faced by Boeing’s 787 Dreamliner — the only aircraft to make the route economically feasible because it is large enough to make the distance but small enough that filling it wouldn’t be as difficult.
Boeing fell three years behind schedule for the delivery of its first 787. It hit further delays in January after 50 of the aircraft were in service worldwide. The Federal Aviation Administration grounded the aircraft for three months following two separate incidents with its lithium-ion batteries, causing the Denver-to-Tokyo flight to miss its original launch date of March 31.
“We are anxiously awaiting this flight,” Valeski said. “The delay has been very painful for us.”
He said the prospect of the flight heightened the likelihood of increased business with Asia. “The gravity of it shifted,” Valeski said. “The physicality of those relationships in Japan and in China is very important. There is a trust element to the engagement that comes off much better face-to-face.”
Denver often touts its world-class airport, and with good reason, but the facility has yet to reach into its full potential.
According to a recent study by Brookings Institution Metropolitan Policy Program, Denver International Airport is among the top 17 global gateways in the United States that together account for 73 percent of all international passengers. The airport is the nation’s fifth-busiest but comes in at 16th-busiest for gateway traffic.
Diio Mi, an aviation data company, reports that DIA currently averages about 29 daily nonstop international departures. Compared to John F. Kennedy International Airport’s 203 departures or Miami International Airport’s 192 daily international departures, Denver ranks much further down the list as the 22nd largest U.S. market for daily, outbound international flights. It has direct flights to cities in Western Europe, Canada and Mexico.
This fits with Denver’s reputation as a high-traffic connection airport. But the Brookings study notes that airports specializing in through-traffic “generate economic activity in sectors directly related to transportation, but these effects may not always spill over into the broader metro economy.”
“Folks need to utilize this air route, especially in terms of coming to Denver as the destination,” said Adie Tomer, senior research associate at the Brookings Institution Metropolitan Policy Program.
The Denver-Colorado delegation seems to understand that, considering its heavy focus on tourism for the first six months of the route.
“This is not a quick shot in the arm. This is what I call a long-term program,” said Richard Scharf, president and CEO of Visit Denver and among the delegates. “What we will do is try to go in there and make a splash on the inaugural and then our office will be back in November where we will use a lot of our promotions, receptions and education with the travel industry.”
Both Visit Denver and the Colorado Tourism Office are pursuing international conventions and leisure travel. The mid-term goal is to educate travel planners in Japan with the aim of getting Denver and Colorado among their travel itinerary options.
“On the leisure side, (Japan) is the fastest growing travel market,” Scharf said. “You have a lot of baby boomers looking for experiences and they want to go out and see the world.”
The Brookings study notes an important link between aviation connectivity and local employment. Metro areas that are an end destination become convergence points for new ideas and capital.
“The opportunities are obviously enormous,” Tomer said. “So now it is very much a ball in the court of the Denver business community.”
He cautions Denver to avoid the follies of St. Louis, which has had a jilted run at trying to become a cargo hub for China.
“In relatively short order, these routes could be eliminated,” Tomer said. “The work is not over. It can end at any point.”
Jim Compton, United’s vice chairman and chief revenue officer, said the airline would not committed to the flight if the data didn’t point to success.
“We obviously enter markets with a good knowledge base. United is the largest U.S. carrier in the trans-Pacific, so we understand the market really well,” Compton said. “Ultimately, the success is built on our understanding of the marketplace, the Denver business community, as well as our ability to build connecting traffic to the markets it serves.”
United has additional skin in the game, which helps buy Denver time. The flight was originally planned to be flown by United’s Star Alliance partner All Nippon Airways, but became a bargaining piece in the airline’s negotiations with DIA about baggage space that United was renting but not using in the airport’s basement.
“Because it is tied into the rental deal, and even though it is going to take us a while as a small market to build that load factor up, there’s an offset to United in terms of changes in rent — so it just worked all the way around,” Clark said. “That will carry us for a while. Three years probably.”
For now at least, Clark and his team will breath a sigh of relief.
“We never dreamed it would take so long,” Clark said. “I really won’t believe it until I get off the plane in Tokyo.”
Kristen Leigh Painter: 303-954-1638, kpainter@denverpost.com or twitter.com/kristenpainter
The delegation
Shinobu Yoshitomi, managing director, East West International Consulting
Linda Yazdani, director of international student services, Red Rocks Community College
Al White, director, Colorado Tourism Office
Paul Washington, executive director, Denver Office of Economic Development
Jamie Van Leeuwen, deputy chief of staff, Office of Gov. John Hickenlooper
Maureen Ulevich, director, Center for International Education, University of Northern Colorado
Steffan Tubbs, host, Colorado’s Morning News, 850 KOA
Bob Stinchcomb, vice president, business development, Vail Resorts Management Co.
Andy Spielman, partner, Hogan Lovells
Janice Sinden, chief of staff, city and county of Denver
Richard Scharf, president and CEO, Visit Denver
Danielle Rocheleau Salaz, assistant director, Center for Asian Studies, University of Colorado
Pam Reichert, vice president, Metro Denver Economic Development Corporation
Jamie Price, area manager, Parsons Brinckerhoff
Craig Piper, president and CEO, Denver Zoo
Rob Perlman, senior vice president, Intrawest
David Palmer, managing shareholder, Greenberg Traurig
Kristen Leigh Painter, reporter, The Denver Post
Inta Morris, senior director for grants and strategic initiatives, Colorado Department of Higher Education
Sandi Moilanen, international division director, Colorado Office of Economic Development and International Trade
Steve Levey, senior principal/CEO, GHP Horwath
Lon Koenig, director of international relations and ombudsman, LCI Language Centers
Steve Kaplan, partner, Kaplan Kirsch & Rockwell LLP
Isao Kamitani, president, East West International Consulting LLC
Laura Jackson, senior director, Air Service Development and Aviation Research, Denver International Airport
Barry Hirschfeld Jr., president and CEO, AIP-Japan
Barry Hirschfeld Sr., A.B. Hirschfeld & Sons
Arlene Hirschfeld, A.B. Hirschfeld & Sons
Eric Hiraga, chief of staff and deputy manager of aviation, Denver International Airport
Mark Hallett, senior director of international studies, Colorado State University
Stephanie Garnica, director, Americas Trade & Investment, Colorado Office of Economic Development and International Trade
Maria Garcia Berry, CEO, CRL Associates Inc.
Doug Friednash, city attorney, city and county of Denver
Evan Dreyer, special adviser to the mayor, city and county of Denver
Tom Dowd, senior director of globalization, University of Denver
Bob Deibel, president, OfficeScapes
Kim Day, manager of aviation, Denver International Airport
Nancy Cochran, director, Lamont School of Music, University of Denver
Tom Clark, CEO, Metro Denver Economic Development Corporation
Dick Clark, partner, Rothgerber, Johnson & Lyons
Matt Christensen, vice president-Business Development, Kiewit Infrastructure Group
John Brackney, president and CEO, South Metro Denver Chamber
Eric Berglund, president and CEO, Upstate Colorado Economic Development
Lawrence Bell, executive director, International Education, University of Colorado
Michelle Behr, acting dean, University of Northern Colorado
John Beeble, chairman and CEO, Saunders Construction
Geta Asfaw, president, Addis & Company/Ababa & Company
Holly Arnold Kinney, owner/proprietress, The Fort
Rose Andom, owner, Rosmik Inc.
Christopher Herndon, councilman, Denver City Council
Mary Beth Susman, president, Denver City Council
Bob Murphy, mayor, city of Lakewood
Sean Ford, mayor, city of Commerce City
Michael B. Hancock, mayor, city and county of Denver
