HomeMy WebLinkAbout07/10/2012 04 Apirport Public-Private Alliance Opportunities Presentation r
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BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No.
For Meeting of: July 10, 2012
ITEM TITLE: Airport Public- Private Alliance Opportunities -- Presentation
by Tony O'Rourke
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APPROVED FOR City Manager
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MEMORANDUM
To: Honorable Mayor and Members of the Yakima City Council
From: Tony O'Rourke, City Manager *R
Date: July 5, 2012
RE: Expanded year -round air service to Yakima
In my past life I was involved in creating a public - private sector partnership in Vail,
Colorado to improve year -round air service to Eagle County Regional Airport in Eagle
County, Colorado. The air alliance we created was a non - profit 501(c)(6) organization
consisting of over 30 public and private sector entities, with a single focus to improve air
service to the Eagle County Regional Airport. The organization tax status allowed the
organization to have no geographic boundaries and to receive funds from governments,
other non- profits, and private business. This was a "pay -to- play" organization, with
members pledging funds for airline financial guarantees, marketing, and administrative
costs.
Prior to 1989, Eagle County Airport had no commercial air service. Today, Eagle
County Airport is the third busiest airport in Colorado, with over 200,000 winter and
summer enplanements. The growth of the Eagle County Airport has been the result of
a strong public - private partnership. Currently, in the winter season, 12 non -stop
markets (e.g. Miami, New York City, Chicago, Dallas, Los Angeles, Minneapolis and
Washington DC) are served by four legacy airlines and in summer there are two non-
stop cities with two airlines providing service.
A proposed Yakima Air Alliance (the "Organization ") would have the single focus of
improving year -round air service to the Yakima Airport. The Organization would have no
geographic boundaries and would receive its funding from its "members," which would
include governmental entities (including the City and County), other nonprofit entities,
and private businesses, all of whom will benefit from greater air service to the Yakima
Airport. The Organization would conduct the following activities in connection with this
focus.
First, the Organization would negotiate "revenue guarantee contracts" with airlines,
under which airlines will agree to provide certain service to the Yakima Airport in return
for certain guarantees from the Organization with respect to number of passengers and
overall revenue that the airlines will realize from the increased routes. To the extent
that these guarantee levels are not met in a particular year, the members will make
contributions to the Organization in order for the Organization to make the payment to
the airline under the guarantee arrangement.
Second, the Organization would negotiate marketing agreements with airlines in order
to help support the marketing efforts of the airlines with respect to the new routes
created for the Yakima Airport. For example, the Organization may seek the donation
by a member hotel in Yakima of a certificate for free nights at that hotel. That
certificate, in turn, may be given away in a certain target market (such as Portland) in
connection with an airline's efforts to market its route from the target area to Yakima to
prospective passengers.
In addition to negotiating these marketing agreements, the Organization will engage in
direct marketing to prospective passengers in target area. For instance, the
Organization may pay for direct mail, radio promotions, social media, cable TV and
internet advertising to tell prospective travelers in certain target areas about newly
available flights from those target areas to the Yakima Airport. Such direct marketing
efforts would also be aimed at persons who have business in Yakima and others who
may want to vacation in Yakima.
Finally, a significant portion of the Organization's time will be spent in ensuring
appropriate communication flow between the airlines and the members /contributors to
the Organization. For example, the Organization will obtain raw data from the airlines
concerning their passenger loads with respect to flights to Yakima, and using that data,
will prepare periodic booking reports informing members of the success of the airlines'
routes. The Organization will also meet directly with contributing members of the
community in order to communicate the results of its efforts to improve air service.
In speaking with Bill Wheeler, I am aware of a prior joint public - private sector effort in
Yakima to support Delta Airlines air service to Yakima. I am interested in learning from
the City Council whether a public- private sector non - profit partnership to solicit and
deliver more air service here is something you would like to pursue.