City Life

New nonstop flights could bring investment and talent to Madison

Flights begin June 7

Make no mistake, the daily nonstop flights between Madison and San Francisco, starting June 7, will save you time and possibly money on your next trip to the Bay Area. But that’s not why local business leaders are hailing the new direct route by United Airlines as a coup years in the making.

“I’ve had people say to me, ‘Great, you’ve saved me a couple hours.’ And other people tell me that having to get a [connecting] flight from Denver isn’t that bad,” says Zach Brandon, president of the Greater Madison Chamber of Commerce. 

“But this isn’t about Madison finding San Francisco. This is about San Francisco finding Madison,” he says.

While Madison’s reputation builds as a growing technology center, Silicon Valley and the San Francisco Bay Area firmly occupy the epicenter for the nation’s tech industry and venture capital firms.
Some $30 billion or 44 percent of venture capital in the U.S. is invested in startups in the Bay Area and Silicon Valley. That has resulted in the reluctance of venture capitalists there to consider backing startups elsewhere.

San Francisco is the 15th nonstop destination from the Dane County Regional Airport, albeit the first West Coast city. But Brandon says San Francisco was “the one” Madison officials were seeking. “This is the singular destination that can make a measurable impact on Madison’s economy,” Brandon says.

According to airport officials, the daily United flight from Madison to San Francisco will generate annually more than $622,000 in airport revenue, almost $1.4 million in visitor spending in the Madison area and $116,000 in airfare savings for passengers.

But Paul Jadin, president of the Madison Region Economic Partnership, says the real economic impact for Madison lies in the potential to derive additional business.

“There are companies who will basically say, ‘I am not expanding our footprint anywhere that I can’t get to directly.’ In other words, they don’t want the inconvenience of a multi-stop flight,” Jadin says. The direct flights, he says, will enhance our attractiveness to people on the coast.

Meghan Roh, a spokesperson for Epic Systems Corp., the medical software giant headquartered in Verona, welcomed the nonstop flights. “It not only brings increased opportunities for us to support our current and future Northern California customers, but also helps grow an important relationship between the Bay Area and Madison’s tech community.” 

She says Epic books about 1,500 flights through the Madison airport every week, and about 500 to San Francisco each quarter.

For four years now, securing nonstop flights from Madison’s airport, particularly to San Francisco, has been a top priority for the chamber, evidenced by its inclusion in the organization’s last two legislative agendas. Brandon cites a 2016 study published in the Journal of Finance concluding that startups connected to venture capitalists by direct flights are at least slightly more likely to succeed. 

It took eight years of meetings with United Airlines to secure the route, according to Brad Livingston, director of the airport. “We were very patient and persistent,” he says. “We kept providing them with local economic data and introduced them to employers in the community. Then United changed its strategy and started placing a higher emphasis on smaller markets. A lot of things had to fall into place.”

Livingston says Madison is the second-smallest city east of the Mississippi River to get direct flights to San Francisco. (The smallest is Bentonville, Arkansas, where Walmart is headquartered.)

Other cities have had to offer airlines financial incentives to secure nonstop flights. “We didn’t need to do that here,” Livingston says, which suggests that United expects there will be enough passengers to justify daily directs between Madison and San Francisco.

University of Wisconsin–Madison students, faculty and alumni could well fill many of the flights. Researchers and people affiliated with UW-based technology startups frequently travel between the cities to attend conferences and meet with colleagues and investors. Just between July 2017 and late March 2018, a total of 523 UW–Madison faculty flew from Madison to San Francisco and nearby cities, says Charles Hoslet, UW–Madison vice chancellor for university relations.

Brandon is betting the next wave of internet development will involve the dispersal of talent from Silicon Valley. 

“We think we’re timing this just right,” says Brandon, betting the direct flights will aid the permanent flight of some from San Francisco to Madison. “People are starting to reevaluate their lives on the coast. They’re looking for that ‘what’s next’ city.”

New nonstop flights to Philadelphia, too

In April, Frontier Airlines started every-other-day direct flights between Madison and Philadelphia. Then on May 5, American Airlines added two daily direct flights to Philly. American uses Philadelphia as a hub to access the entire East Coast, just as San Francisco is United’s hub for flights on the West Coast and overseas. 

From the Madison airport you can also fly straight to Detroit, Minneapolis, Atlanta, New York City, Washington, D.C., and Salt Lake City on Delta Airlines; Charlotte, North Carolina, and Dallas-Ft. Worth on American Airlines; Orlando, Florida, and Las Vegas on Frontier; Denver on United and Frontier, Chicago on United and American; and Newark, New Jersey, on United.

The Madison-San Fran Supply Chain

No. 1
San Francisco is the top California destination for Madison air travelers, in contrast to Los Angeles being favored by most Cali-bound Americans.
– Brad Livingston, director of the Dane County Regional Airport

25,000
The number of University of Wisconsin alumni living in California, making it the state with the fourth highest number of Badger expats. San Francisco is among the top five U.S. cities outside Wisconsin in which the most UW–Madison alumni live.
– Charles Hoslet, University of Wisconsin–Madison vice chancellor for university relations

About 500
The number of entrepreneurs, company executives, venture capitalists, attorneys, investment bankers and consultants who have e-business cards posted at siliconvalleybadgers.com, the website of the Badger Entrepreneurship Forum, an organization for UW alumni in the San Francisco Bay Area.

90 percent
Percentage of Silicon Valley tech workers surveyed who said they planned to leave their jobs. The high cost of living in the Bay Area “may heighten the appeal of cities like Seattle, Portland, Austin or Madison, Wisconsin, all of which rank in the top 10 best-paying cities for software engineers,” the San Francisco Business Times reported in July 2016.

No. 10
Madison’s ranking among the top 25 U.S. tech cities in 2017, according to commercial real estate firm Cushman & Wakefield Inc.

$97,236
The average annual salary of a software engineer in Madison in 2016, the fourth highest among the best paying U.S. cities — and the highest ranked city with a cost of living below the national average.
— Glassdoor.com.

26.8 percent
The percentage of Madison’s population that are millennials, ages 25 to 34 — the fifth highest among U.S. metro areas. And 58 percent of Madison millennials are college graduates. Only the Boston area had a slightly higher percentage of millennials.
– The Brookings Institution

Joel Patenaude is associate editor of Madison Magazine.


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