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Airport officials will meet with SkyWest today
Wednesday, August 27, 2008 11:04 AM PDT
Two airport officials flew to Salt Lake City late Tuesday afternoon to negotiate with SkyWest Airlines for round-trip flights with Portland.
Gary LeTellier, Southwest Oregon Regional Airport’s executive director, and Mike Lehman, chairman of the airport’s governing board, were scheduled to meet SkyWest officials at 1 p.m. Pacific time today, pursuing a deal that will secure the flights after Horizon Air’s Portland service terminates Oct. 11.
“I move we let Mike negotiate the very best deal we possibly can, within the parameters of the agreement,” said Commissioner Helen Brunell Mineau, at an emergency meeting before the two men left.
Commissioner Joe Benetti seconded the motion, and the board unanimously approved a tentative agreement that, among other things, would guarantee SkyWest up to $713,136 a year to ensure the airline will at least break even on its Portland flights. If the tentative contract is agreed upon, SkyWest would send the district a monthly report and invoice, which would show passenger revenue for the preceding month. If revenue falls below SkyWest’s break-even level, the district would have to pay SkyWest the difference within 15 days, or the airline could terminate the contract with five days’ written notice to the district.
LeTellier declined to say where the funds would come from.
“There’s a plan,” he said. “I’m sure that we’ll be in a position to disclose that very soon.”
The only reference to funding in the contract refers to the Northwest Regional Air Service Initiative, saying, “(The) district is a party to the ... initiative, which has been granted funds from the Oregon Department of Transportation to support the scheduled service.”
The initiative is a consortium of Washington and Oregon communities that were awarded a $180,000 Transportation Department grant to help improve scheduled airline service in the region, according to the state’s Web site.
The tentative contract calls for two round-trip flights between Portland and North Bend per day, using 30-seat Embraer Brasilia EMB-120 or equivalent aircraft. SkyWest would operate the service as United Express, in cooperation with United Airlines.
Benetti asked board members what they thought about adding a provision to the contract that would increase the number of flights if there were a sufficient number of passengers aboard the two flights. He said, for example, he would like the airline to add another round-trip flight per day if the passenger count on the airplanes exceeds 70 percent. Bay Area Hospital would need more than two flights, he said.
“Three or four flights would be more practical, if we can get there,” Benetti said.
Lehman said once he had the board’s authority to do so, he would negotiate at his discretion, but he warned the others that the timeframe is crucial.
“I would like the board to be able to execute a contract by Friday,” said Jerry Lesan, the airport district’s lawyer.
The contract, if agreed upon, allows renegotiation of the airline’s minimum revenue requirement if fuel costs increase by 25 cents a gallon.
The current price for a gallon of jet fuel is $4.40 per gallon, the contract says.
The term of the agreement is one year, starting Oct. 12 and running through Oct. 12, 2009.
Lesan said the agreement is modeled after a contract the district has with SkyWest for round-trip flights to San Francisco.
Lehman and LeTellier were scheduled to take a flight to Utah about 10 minutes after the meeting ended. They all agreed Tuesday they need a signed contract this week.
Airport officials are seeking a speedy agreement, in order to prevent gaps in service when Horizon pulls out.
In a similar revenue guarantee decided upon earlier this year, SkyWest was promised up to $250,000 per year if it didn’t break even on its San Francisco flights.
SkyWest just came on board at Southwest Oregon Regional Airport last month. Flights between North Bend and San Francisco began July 7. Horizon Air, which has provided the Portland flights at the airport for 27 years, filed its notice of termination on June 27, four days before the grand opening of a $20 million air terminal. |