Friday, March 7, 2008
Redding seeks funds to cover Delta deal
By David Benda
The Redding (CA) Record Searchlight
Redding City Council members have told Airports Manager Rod Dinger they want nonstop service to Salt Lake City, but they want to know if the city can afford it. Specifically, does Redding have the money to give Delta a revenue guarantee? Council members voted 4-1 Tuesday night to move forward on a deal to bring Delta to Redding. Patrick Jones cast the lone dissenting vote. Delta wants $1.22 million for twice-a-day jet service to Salt Lake City that could start in July. Delta would fly 50-passenger regional jets. Subsidies to Delta would include a $500,000 revenue guarantee and $120,000 in marketing and start-up costs. The $120,000 would come out of the airport budget. On Wednesday, Dinger said he couldn’t say where the city would get the $500,000. Redding in 2005 used a $500,000 grant from the Department of Transportation to help Horizon Air start service to Los Angeles. Dinger said the DOT grant is not available now.
Delta also wants $500,000 in prepaid tickets — a voluntary program businesses would fund.
The council is expected to make a final decision in April.
Four businesses — Disaster Response, Redding Jet Center, Wallner Plumbing Heating & Air Conditioning, and SECO Manufacturing — have verbally committed to the travel bank.
Disaster Response owner Jim McDilda said he would buy $10,000 in advance tickets. Patrick Wallner of Wallner Plumbing said he would buy between $5,000 and $10,000 in tickets.
At Tuesday’s meeting, councilmen Dick Dickerson and Ken Murray suggested that Anderson, Shasta Lake and Shasta County could help finance the revenue guarantee because Delta service would benefit the entire north state.
Anderson City Manager Scott Morgan said Wednesday he’d welcome a presentation from Redding.
“We want to listen, but I don’t know enough about the costs and benefits to give you good answers,” Morgan said.
Three Redding travel agents agreed that having another option for flying out of Redding couldn’t hurt, but they wouldn’t speculate whether service to Salt Lake City would be a success.
Today, Redding Municipal Airport is served by SkyWest Airlines, which flies to San Francisco, and Horizon Air, which flies to Los Angeles, Arcata-Eureka and Portland, Ore.
Cathy Bossert, co-owner of Downtown Travel in Redding, thinks getting Delta could put more pricing pressure on SkyWest and Horizon.
“Maybe you could get fares to where people could afford to travel,” Bossert said.
A round-trip ticket to San Francisco on SkyWest was $571 on Wednesday. Roundtrip to Los Angeles on Horizon was $384, Bossert said.
In June, Delta will start nonstop service to Salt Lake City from Arcata-Eureka. Initial fares are $218 for a round-trip ticket.
The potential deal with Delta comes as passenger numbers are down in Redding. The airport moved 129,550 passengers through its gates in 2007, a 2.9 percent decline from 2006, when 133,412 passengers flew in and out of Redding. A record 135,943 passengers used the airport in 1996.
At least two communities that have landed Delta service to Salt Lake City said it has stimulated business at their airports.
“It has been huge for us,” Redmond-Bend, Ore., Airport Manager Carrie Novick said.
The Central Oregon community used a $500,000 DOT grant to lure Delta. The money was to be used for a revenue guarantee. But the service proved so popular that Delta never tapped into the money and Redmond-Bend gave the $500,000 back to the government, Novick said.
What’s more, passenger boardings in Redmond-Bend have gone from 188,000 in 2005 (the year Delta started service) to 246,000 in 2007. SkyWest and Horizon also serve the community.
Bern Case, airport manager at Rogue Valley International in Medford, Ore., said the effect on other airlines depends on how they were doing before the new carrier arrived. Rogue Valley is served by Delta, US Airways, United and Horizon.
“I think your passengers will grow if SkyWest and United are strong. If either one is weak already, then that third airline could be their demise,” Case said.