San Bernardino International Airport offers incentives to passenger airlines
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09:38 PM PDT on Thursday, September 24, 2009
Looking to lure passenger carriers to a nearly completed passenger terminal, San Bernardino International Airport officials this week approved a long-discussed package of incentives, worth more than $2.5 million for each airline it can draw.
The incentives will be offered to up to four airlines that initiate commercial service. Officials during the past year have said that one major domestic airline is seriously examining the feasibility of starting service at the former Norton Air Force Base, while at least one more is considering it, though no carriers have been named.
The board of the joint-powers Inland Valley Development Agency, which oversees airport development, on Wednesday approved an incentive package that includes up to $1 million in revenue guarantees per year for the first two years of operation, and forgiveness of landing fees for five years.
It also provides for $500,000 in advertising and marketing funds, to help each airline promote its new services during the first year of operations.
"These amounts won't nearly pay all of the costs that an airline would bear to extend service, but it could make the difference in turning a profit on that service," said Don Rogers, interim director of the development agency.
Rogers said it costs an airline between $70 million and $85 million to bring new services to any airport.
He said money is already in the airport's budget to cover the incentives for the first two airlines that agree to start service, and funding for the other two will need to be finalized later by airport authorities.
Airport aviation director Bill Ingraham said the incentives will be offered only to airlines that can guarantee a minimum of 12 weekly departures.
Officials have said for several months that some kind of incentive package will likely be needed to attract carriers to the San Bernardino airport, in an economy where most airlines are cutting rather than adding services. "What we're doing here is formalizing that," Ingraham said.
Carriers have dropped flights over the past several months at facilities across the nation, including Ontario International Airport.
Ontario airport doesn't offer any incentives to new airlines, and the cost for doing business there is $14.50 for each passenger who gets on a plane, one of the highest in Southern California.
The Ontario airport's revenue relies on its airlines. As revenue has dropped and fewer airlines serve the airport, landing fees have risen to $2.76 per 1,000 pounds, and terminal rental rates have increased.
The San Bernardino facility's current landing fee is $1 per 1,000 pounds.
Thomas Nolan, aviation director at Palm Springs International Airport, said his airport offers incentives to new airlines on a case-by-case basis.
San Bernardino airport officials have said the main passenger terminal, which cost more than $80 million to renovate from its former military base use over the past two years, will be ready to accept commercial flights before year's end. Still being completed are final tarmac and parking lot improvements, as well as food and newsstand concessions.
Reach Lou Hirsh at 951-368-9559 or lhirsh@PE.com.
Reach Kimberly Pierceall at 951-368-9552 or kpierceall@PE.com.
What's offfered
San Bernardino International Airport officials this week approved measures to help encourage major airlines to add local service. Incentives would go to each of the first four airlines that bring in new flights.
Revenue guarantees: Up to $1 million per year for first two years.
Advertising and marketing funds: $500,000 during first year.
Landing fees: Forgiveness of payments for five years.
Source: Inland Valley Development Agency
