Teri Conrad, owner of Ahwatukee Foothills-based Tekterra.com Consulting, returned from a meeting with a client in South Dakota to Phoenix-Mesa Gateway Airport.

A few minutes after she arrived, her bags did, too. She hopped in a car parked practically at the terminal door, and she was home via freeway almost as quickly as she could have hoofed it from an arrival gate to the baggage carousel at Phoenix Sky Harbor International Airport.

It was the first time Conrad, who said she's in the air often on business, flew to and from the east Mesa airport. She saved about $500 and lots of travel and wait time, she said.

"I was thrilled. I'll be looking to do this again," she said.

The U.S. airline industry is in turmoil, with sky-high jet fuel prices and slipping passenger demand because of the tottering economy.

The bad-news combo is expected to decimate flight schedules after the summer vacation season ends. Sky Harbor is already seeing fewer passengers this summer than last.

It's a difficult time to be trying to grow into a full-service commercial passenger airport, but Gateway's business is soaring. Passenger counts in 2008 are up more than 1,000 percent from this time last year.

The year-to-year comparison is, of course, unfair.

Regional carrier Allegiant Air started service in October at Gateway.

Prior to that, Vision Air, the airport's first scheduled passenger service provider, had been flying a couple of flights a week to and from Las Vegas. And two airlines started up and failed, despite an obvious demand for their services based on ticket sales.

ALLEGIANT ARRIVES

Allegiant's arrival at Gateway changed everything. The Las Vegas-based carrier's roster of 13 routes to and from Mesa, with a couple of flights on each route every week, was soon filling planes.

The airline's niche was - and still is, said Allegiant spokeswoman Tyri Squyres - to ferry people from cold northern climates to sunny destinations.

But East Valley residents see it differently. From the beginning, more than a quarter of Allegiant's round-trip tickets started and ended at Gateway, a surprise for the airline, which had not even promoted the service to Valley residents.

When summer started, the percentage of Valley residents buying tickets rose significantly higher than that, Squyres said. And still the airline is filling planes at least three-quarters full.

In June, Allegiant's systemwide load factor - the percentage of available seats on all flights filled with paying passengers - was 94 percent, Squyres said.

Because the airline promotes cold-climate escapes to warm winter retreats, Allegiant dumped some routes for the summer. That was always in the plans, Squyres said.

Allegiant is now flying to only seven of the original 13 destinations from Gateway. But Squyres said the carrier is already selling tickets between Mesa and nine destinations for fall, and will probably increase that number before year's end.

"We've been very happy with (Gateway business)," she said. "We will only improve our commitment to this community."

That's good news for East Valley stakeholders, including tourism leaders, the business development crowd and airport officials who are hoping to eventually make Gateway into a major reliever airport for Sky Harbor.

SLOWING GROWTH

But all those lofty growth goals may have to go on hold until the economy improves, said Robert Brinton, executive director of the Mesa Convention and Visitors Bureau and one of Gateway's most dogged supporters.

"We continue to talk to other airlines, but nothing is likely to happen in this economy," Brinton said. "We'll just have to see how the market is affected."

But even if it doesn't grow much in the short term, things look good for Gateway overall based on passenger counts, he said.

Brinton thinks much of Allegiant's business at Gateway is because people are visiting friends and relatives rather than taking a vacation at a Disney park or the beach.

Those passengers don't fill up local hotels, Brinton said, but it is a type of travel less vulnerable to economic pressures.

Sylvia Long of Scottsdale fits the profile. She just booked four tickets to Bellingham, Wash., from Gateway.

Price and convenience were the key factors for flying from Gateway instead of Sky Harbor, she said.

Dave Tennyson of Mesa just returned from his third round trip to Rapid City, S.D.

"It works," he said. "It's easier to get in, get your bags and get out, and as long as they continue these low prices, I'll (keep flying)."

Allegiant's continued service is essential to Gateway's goals, said airport spokesman Brian Sexton.

The passenger service has an exponential impact on nearby businesses, including rental car companies and hotels, Sexton said.

And it helps attract related services to the Gateway complex, he said. Embraer and Cessna maintenance facilities are under construction. Hawker Beechcraft is getting ready to break ground.

The good news is Allegiant, like the much bigger low-cost carrier Southwest Airlines, is profitable despite economic pressures, he said.

With lots of Wall Street hand-wringing over the fate of major airlines as oil prices rise and discretionary income of would-be passengers shrinks, Allegiant looks solid, said airline consultant Michael Boyd of Colorado-based The Boyd Group.

"I can't conceive of Allegiant going away," Boyd said. "They are so flexible. Whatever they are doing, they are doing it right. Nobody complains about Allegiant."

And that's despite Allegiant's longtime policy of bare-bones pricing and charging fees for anything extra, from luggage to snacks to making phone reservations. It's a policy almost all U.S. airlines have adopted since the oil crisis started, but one that has angered many of their passengers.

LONG-TERM SUCCESS

Even better news is that Gateway is poised to be a long-term success story even if Allegiant's service isn't, said John Infanger, editor of Airport Business magazine.

Gateway "wouldn't go away tomorrow, even if Allegiant did," Infanger said. "They built an infrastructure that generates revenue. Airlines are short-term. Aeronautical business investments are long-term."

Infanger said small airports are in crisis now, many of them losing services.

Infanger blames Congress for looking the other way while the crisis builds.

Regardless, Gateway will be a survivor, he said.

"It's impossible to predict Gateway's future for commercial (passenger) services, but Hawker Beechcraft, that's a big investment, and they don't make investments like that for the short term," Infanger said. "Gateway is in a really good position now compared to other airports."