County stops funding Air Alliance
EAGLE COUNTY – Eagle County, the operator of the Eagle County Regional Airport, will no longer be providing about $50,000 in funding to the EGE Air Alliance, a group made of local governments and businesses that works to grow airport service.
The money had been used to support a flight out of Dallas in September, a shoulder season for the county’s resort economy.
The decision came a few weeks ago after county officials realized the funding it previously gave to the Air Alliance violated Federal Aviation Administration regulations.
Eagle County Attorney Bryan Treu said the FAA sent out a circular to airports outlining the regulations in its “Air Carrier Incentive Program Guidebook: A Reference for Airport Sponsors.”
While the regulations aren’t new, the redistributed information raised some concerns for the county.
“It says that you, as an airport, don’t put any money toward flight guarantees,” Treu said. “Now we know we can’t.”
The Air Alliance supports specific flights on specific airlines in order to bring business to Eagle County. The alliance will cut a deal with an airline about a flight and guarantee a specific percentage of seats will be sold on that flight. If the promised amount of seats are sold, the Air Alliance pays nothing. If the seats are not sold, the Air Alliance pays the difference.
Because the Air Alliance program is a direct subsidy of an air carrier operation, the FAA mandates that it is not allowed to receive funding that comes from airport revenues – a problem for the county because it began using airport revenues to support the program a few years ago rather than general fund money, which it had used before the economy crashed.
County at risk
If the airport revenues were used to essentially send out a bid request giving all airlines the same opportunity to bring a specific flight service to the airport, rather than extending the offer to just one airline, the airport revenues could be used, according to the Air Carrier Incentive Program Guidebook.
County Commissioner Jon Stavney said the county has looked at the regulations and feels it could be at risk for having violated them in the past, which is why it pulled the funding now.
“We want to cut our risk off as soon as we’re aware of it being a risky thing,” Stavney said.
Treu said the county reviewed the regulations with its airport counsel to see if maybe the county should continue to support the program from another fund, such as the general fund, that is separate from airport revenues.
“(Our attorneys) said not to be a part of it at all,” True said.
The flight supported by the county, one September flight out of Dallas on American Airlines, is during a shoulder season when the airport would like to grow business. The flight loads were already proving successful, Treu said, so the county likely wouldn’t have seen the need to continue supporting the flight anymore because of that success.
“We certainly support growing air traffic at our airport. There are restrictions, that’s what we’re concerned about,” Treu said.
Treu said the county is looking into whether it could provide incentives for certain flights, such as waiving landing fees, but FAA regulations state that incentives can only be used for new flights.
The Air Carrier Incentive Guidebook defines new service as either service to an airport not currently served, nonstop service to an airport where no nonstop service is currently offered, a new carrier or an increased frequency of flights to a specific destination.
The regulations do not recognize repeated seasonal service, upgrades of equipment types or increased numbers of seats on existing flights as new service.
Future success in jeopardy?
Kent Myers, the director of the Air Alliance, said the Air Alliance is moving forward with supporting the September American Airlines flight and hopefully others.
“We’re meeting later this month to discuss opportunities to fund other flights in the future,” Myers said.
Myers said the community will have to make up the difference from the loss of county funding, which was about 40 percent of the funding for the September flight in recent years.
Stavney said that while funds could legally come out of the general fund, economic conditions simply don’t allow for it.
“Five to eight years ago, when things were rolling, that’s why we were taking it out of the general fund,” Stavney said. “It’s arguable that with all the pushes on the general fund – it has shrunk by 25 percent in the last two years – that this falls out of priority.”
Air Alliance board members aren’t happy with the county’s decision and feel the county’s decision could affect the well being of the program in the future. A big concern is that the loss of county support could affect the willingness of other businesses and governments to provide support in the future, according to one Air Alliance member who wanted to remain anonymous.
Stavney said he understands why this could be a blow to the Air Alliance.
“They’re upset – we’ve been the anchor of that program along with Vail Resorts,” Stavney said.
If the Air Alliance wanted to operate under the FAA’s restrictions for how airport funds could be used – by providing the same opportunities to all airlines in trying to attract new flight service to the airport – Stavney said that might work. He said he also knows that the Air Alliance doesn’t do business that way, that deals are typically done over lunch and a handshake, not by opening up a bidding process to everyone.
“We, too, want to grow flights to the airport,” Stavney said. “But this particular program, for us to continue as a partnership, we believe we’re in a different legal position now.”
Treu said he isn’t overly concerned about what could happen if the FAA determines the county previously violated the regulations.
“It’s a matter of, did we pull (the funds) from the right bucket,” Treu said.
Community Editor Lauren Glendenning can be reached at 970-748-2983 or firstname.lastname@example.org.