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HomeMy WebLinkAbout25214RESOLUTION NO. 25214 ' A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING THE 2024 AIR SERVICE INCENTIVE PROGRAM FOR THE PALM SPRINGS INTERNATIONAL AIRPORT WHEREAS, the City of Palm Springs, ("City'), relies on its tourism economy which is dependent on'airline service to the Palm Springs International Airport; and WHEREAS, the City has recognized the need to incentivize airlines in different ways to market their service to promote airline travel to the City, and to improve airline service through expansion of service from the City to other additional cities throughout the country; and WHEREAS, on January 20, 1993, the City Council adopted Resolution No. 18019 establishing an Air Service Incentive Program for the summer of 1993, as a means of expanding air service in the summer months when passenger activity is at its lowest; and WHEREAS, on March 20, 2002, the City Council adopted Resolution No. 20295 establishing an Air Service Development Summer 2002 Incentive Program, to allow for the rebate of certain airline landing fees as a means of incentivizing additional airline service in the summer months of 2002; and WHEREAS, on January 2, 2003, the City Council adopted Resolution No. 20525 establishing an Air Service Incentive Program, to allow for up to $25,000 to airlines initiating qualifying new service from the City; and WHEREAS, on June 4, 2003, the City Council approved the Air Service Development 2004 Incentive Program to further enhance air service development activities with air carriers to increase routes served by the City; and WHEREAS, in 2010, the City established an Airline Marketing Incentive Program allocating $1,000,000 in promotional funding to qualifying new air service at the City; and WHEREAS, the 2010 Airline Marketing Incentive Program was successfully utilized by the City from 2010 through 2016 with seven different airline carriers providing incentives valued at over $750,000 to reimburse the airlines for marketing programs related to their new air service to the City; and WHEREAS, on November 14, 2018, the City's Airport Commission reviewed and recommended approval of a modified Air Service Incentive Program that eliminates incentives to airlines for reimbursement of marketing expenditures in exchange for waiver ' of certain Airport fees for qualifying new airline service to the City; and Resolution No. 25214 Page 2 WHEREAS, on December 9, 2021, the City Council voted to increase the cap of the 2019 Air Service Incentive Program by $353,000 to approve all existing air service applications, I suspended the program and asked staff to research and develop a new program to promote and incentivize expanded and new airline service to the City. WHEREAS, on March 24, 2022, the City Council adopted Resolution No. 24996 establishing the 2022 Air Service Incentive Program. WHEREAS, the City Council has reviewed and considered the benefits of its prior Air Service Incentive Programs and recognizes the need continue to promote and incentivize expanded and new airline service to the City with an updated program, and on June 13, 2024, considered and approved the 2024 Air Service Incentive Program. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY RESOLVE AS FOLLOWS: Section 1. The recitals above are found to be true and correct and constitute the findings of the City Council made in support of this resolution. Section 2. The 2024 Air Service Incentive Program for the Palm Springs International Airport, attached hereto as Attachment 'W', and incorporated herein by reference, is hereby approved. Section 3. The City Manager is hereby authorized to execute and approve a Memorandum of Agreement with airlines providing waiver of certain Airport fees for qualifying new airline service in accordance with the 2024 Air Service Incentive Program, in an amount equivalent to the total amount of fee waivers and marketing funds granted through the term of the Memorandum of Agreement. To the extent the total amount of any such fee waiver for an individual airline exceeds $25,000, the City Manager is hereby authorized to approve the Memorandum of Agreement. Section 4. The total cumulative amount of any fee waivers granted and/or marketing funds provided pursuant to the 2024 Air Service Incentive Program shall be reviewed and determined on an annual basis during the City's budget process. The Executive Director of Aviation shall maintain a record of all fee waivers and marketing funds granted pursuant to any Memorandum of Agreement approved by the City Manager, and shall suspend the 2024 Air Service Incentive Program at such time as the annual budgeted amount has been exceeded, unless subsequently extended by action of the City Council. Resolution No. 25214 Page 3 ADOPTED THIS 13th day of June 2024. ATTEST: �� Brenda Pre , City Clerk Scott C. Stiles, City Manager CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS) I, BRENDA PREE, City Clerk of the City of Palm Springs, hereby certify that Resolution No. 25214 is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on June 13, 2024, by the following vote: AYES: Councilmembers Garner, Middleton, Mayor Pro Tem deHarte, and Mayor Bernstein NOES: None ABSENT: Councilmember Holstege ABSTAIN: None IN WITNESS WHEREOF, I have hereunto��s"et my hand and affixed the official seal of the City of Palm Springs, California, this � day of June 2024. ✓� Brenda Pre , MMC, CERA, City Clerk City of Palm Springs Resolution No. 25214 Page 4 ATTACHMENT "A" Resolution No. 25214 Page 5 2� palm springs palm springsE. option 1: Daily Service Target Un-Served Existing Un-Served Existing Airport Airport Airport Airport Airport (Year-round) (Year-round) (Year-round) (Seasonal) (Seasonal) Marketing $75,000 $50,000 $15,000 $25,000 Landing 100%for24 100%for24 50%forsix 100%for Fee months months months first three Waivers seasons $10,000 50%for first season Gate 100%for 24 100%for 24 50%for six 100%for Waivers months months months first three N/A seasons Target Airpon: Atlanta, Charlotte, Chrcago, Detroit, riawa, Houston, Minneapolis, New Yon Ory, Philadelphia, Spokane. Toronto. Wa5hmgton, D.C. (DC&AD,BVVh Uo-Served Airport: Any airport without existing service of any type from PSP and not on the Target Airponlist Existing Airport: Any airportwith existing service of any type from PSP Stipulations: Airline must operate one round trip flightfive days or more per week for d weeks per yearto qualify for year-round incentives. Airlines must operate one round trip flight five days ormore per week for 20 weeks to qualify for seasonal incentives. Service mustbe to an airport In the US, Canada. or Mexico. Target and Existing Airport incentives are not valid for airlines with existing service on the route they're applymgfor, incentives are notvalid for international airports without US Customs Pre -Clearance until PSP opens FIS facility Target Airport incentives are offered only to the first qualifying an line to announce service to that airport. Resolution No. 25214 Page 6 0. palm springs ' Option 2: Seasonal to Year -Round Conversion Target Airport Other Airport Marketing $75,000 $25,000 Landing Fee Waivers 100%for additional 100%for additional months for two years months for two years Gate Waivers 100%for additional 100%for additional months for two years months for two years Target Airport: Atlanta, Chicago-ORD. Dallas DAL, Houston-IAH, MmneapoLs, Portland PDX. Toronto-YYZ, New York-)FK. Other Airport Any airport with existing seasonal service of any type from PSP and not on the Target Airport list Stipulations: Airline must operate one round trip flight four days or more per week for 46 weeks per year. Service must be to an airport in the US or Canada. Applicant airline must have existing seasonal service on route applied for. Only previously unserved months will qualify for waiver incentives in years one and two of their operation Landing Fee and Gate Waivers are provided for the previously unserved monthvdates for years one and two of the additional service. Target airport incentives are offered only to the first qualifying airline to announce service to that airport. palm springs Option 3: oa Less -Than -Daily Service Target Target Un-Served Un-Served Existing ' Airport Airport Airport Airport Airport ice• (Year-round) (Seasonal) (Year-round) (Seasonal) Marketing $75,000 $50,000 $50,000 $25,000 $10,000 Landing 100%for 24 100%for 100%for 24 100%for 50%for six Fee months three months first three months Waivers seasons seasons Gate 100%for 24 100%for 100%for24 100%for Waivers months three months first three N/A seasonal seasons Target Airport: Atlanta, Charbtte. Chicago, Detroit, Hawaii, Houston. Minneapolis, New York City, Philadelphia, Spokane, Toronto. Washington, DC. (DCAIADBWI) th Served Airport Any airport not on the Target Airport list without existing year round or seasonal non- stop servlcefrom PSP, Existing Airport Any airport with ensung service of any typefrom PSP Stipulations: Airline mustoperate one roundtrlp flight two days or more per week for 46 weeks per year to qualify for year-round mcentrves. Airlines must operate one round trip flighttwo days or more per week for 24 weeks per seas antoqualify for seasonal incentives. Service must be to an airport in the US. Canada, or Mexico. Target and Existing Airport incentives are notvalid forairline with existing service on the route they're applyingfor. Incenuvesare natvakd for imernatlonal airports without US Customs Pre - Clearance until PSP opens PIS facility, Target airport incenuvesare offered on the first qualifying arrimeto announce service to that airport. Resolution No. 25214 Page 7 ' ► palm springs Option 4: Intercontinental Service + Target Un-Served Target Un-Served Airport Airport Airport Airport (Year-round) (Year-round) (Seasonal) (Seasonal) Marketing $200,000 $100,000 $150,000 $75,000 Landing Fee 100%for 24 100°% for 24 100%for 3 100%for 2 Waivers months months seasons seasons Gate 100%for 24 100%for 24 100%for 3 100%for 2 Waivers months months seasons seasons Target Airport Amsterdam, Bogota, Dublin, Frankfurt, London, Madrid, Munich, Panama City, Pans, Un-Served Airport: Any airport without existing service of any type from PSP, located outside of North or Central America, and not a Target Airport Stipulations: Airline must operate one round trip flight two days or more per week for 66 weeks per year to qualify for year-round incentives. Airlines must operate one round trip flight two days or more per week for 20 weeks per season to qualify for seasonal incentives. Not vandfor service ro aoporrs located in North cr CentralAmenca, Gulf of Mexico. or Caribbean. Not valid until PSP opens an n5 facility. Target airport incentives are offered only to the first qualifying airline to announce s -, - _ a[airport. No!' palm springs Option 5: ' Summer Seasonal Service Target Airport ed Airport Marketing Landing Fee Waivers Gate Waivers $75,000 100%for first three summer seasons 100%for first three summer seasons $25,000 100%for first three summer seasons 100%for first three summer seasons Target Airport: Atlanta, Chicago, Detroit Houston, Minneapolis, New York City. Toronto, Washington, DC (DCAIAD,BWp Urn -Served Airport: Any airport without existing service of any type from PSP and not on the Target Arport list. Stipulations: Summer season is defined as May 1 to September 30 each year. Airline must operate one round trip flight two days or more per week for from May 1 through September 30 to qualify for incentives. Service must tie to an airport in the US, Canada, or Mexico. This incentive does not apply for airlines who have operated the route they apply for at any point in the past 24 months.Valid only for airlines with no existing service on route's) applied for. Incentives are not valid for international airports without US Customs Pre Clearance until PSP opens PIS facility, Target airport incentives are offered only to the first qualifying airline to announce service to thatauport. E Resolution No. 25214 Page 8 palm springs Option 6: New Entrant Airlines Marketing Terminal Waivers (Service to Existing Airport) Terminal Waivers (Service to New Airport) Daily Year -Round � ee� 100%for 12 months 100%for 24 months Less -Than -Daily & Seasonal $25,000 100%for 12 months 100%for 24 months Daily Year -Round Service: Airline must operate at least one round trip daily flight five days per week for ad weeks. Le Than -Daily &Seasonal:Airline must operate at least one roundtripdailyflighttwo days per week for four months. Stipulations: Only available to airlines that have not served PSP in the past 24 months preceding their service start date. Marketing funds in this option are m addition to marketing funds for specific routes provided in other options m this program. H airline enters PSP with service to an existing market (a market with any type of scheduled service), terminal waivers are offered for no more than 12 months. if airline enters PSP with service to a new airport terminal waivers are offered for no more than 24 months. B airline enters PSP with service to a mix of existing and new airports, terminal waivers will be prorated with existing per turn rates. C Resolution No. 25214 Page 9 FAQApalmsprin I I Stipulations for Marketing Funds/support 1 Advertising incentive funds W be all to FAA Part 1"'. ' 'g'Kuy a -,:,a:r-y One; win a signed Airport Use and Lease Agre-mll,i: Z Al marketing finds and KW% must ex" promil the routes el�gbe under the program M&.T PSP. 3. All marketing incentives are available from the date of announcement until six months Ater sewe inception, 5D% of ava !a' : -,- -, scent oylaunch date 4, Incenthies maybe paid call to the media outlet or reimbursed tothelercamer should the car er want to utl the 11�. N,' for these wall up to N allowable program furls, tidy rfthe All received prior written ap)[1117191 Of the media b') mer air dates aw aM Gfthe ads that ran. AJI qualified remourssernerml must ol qwK Avnycela* reimbursement cf45days 6subject toalO%redW"inre.mbursa: must be incoml rmo 0 amponfluiced mlldili purchases 3-�vr�q that maybe supper- H-ertlncu.- :'7adil collateral innexas, direct mail an. , -1 �- 'nutp L-7-- s;, - - - -a:bookiristagram, X ell I as TV, radio, SE!. E -�1,3.-,va Yl am s:: 5 l: ; -: - : �- :- All e,,,Itl; vies mus', be spent in the PSP qtcweq* area as dd* byne Aipor, ui!6s onere. Dl Airport 8. The Al 7 or il to Weil ch markel incermle, 9, All adhel D-Zi) Al:' al: li, 10, the aG .;a7H nwl marketingstrategyforthe Rewsew tha: actil themedium thartyal deused, and thebudgel the promdown. 11. Shol the ircentril service be suspended prot tothe e0imon of the l of Palm Scomp at m; sole discretion, may consider warling repayment of ml documented proof that the incenthized routes) Hare row1be. Resolution No. 25214 Page 10 Stipulations for Fee Waiver Incentives 1. Incentive fee Waivers will be available to FAA Part 121 & 380 Signatoryaid Non-Signatoryairlmeswith a signed Airport Use and Lease Agreement a written confirmation of the new service, and an executed Memorandum of Agreement forany incentives provided in this program. 2. The Airline will be eligilblefor incentiveshom the first day ofservicefor up to 24 months or 3 seasons depending on level of senficeas outlined in applicable iricentNe options. At the conclusion ofthe incentive period, the Airline will be invoiced, and must pay, the landing fees and terminal rates, fees, and charges according tothe Airports published Schedule of Rates, Fees, and Charges as required by its Airport Use and tease Agreement forthe remainder of the contract term for each route. 3. Gate Waivers in Options 1-5 include Gate Hold Room/Parking per turn fees, Airlines with a Signatory agreement will receive credit based on the signatory per -turn gate hold room/parking per turn fee for the type of gate used (jet bridge vs, ground board) for the incentwizedflights. 4. New Entrant Airlines may receive up to24months offullTerminal Waivers which include Ticket Counter &Queue, Airline Ticket Office, and Baggage Service Office depending on le el of service as outlined in Incentive Option 6. Waivers may be prorated depending routes offered, existing vs. new, and will be based on exis6ngper turn rates in PSP's Airline Use and Lease Agreement 5. Incentives apply only to new scheduled service that results in an increase in the number of total flights offered at PSP by the air carrier at the time the new service is announced. Han air carrier launches new service, it qualifies for incentives only on the new route, not on the existing service. An airline may not reduce frequency to, or cancel, a market it currently serves from PSP in order to launch serviceto a newairport 6. 9 the air carrier reduces frequency of service below the requi red number of flight operations outlined in this Program, or ceases service on the incenrivized route, prior , to providing PSP service for the time period outlined in this program, the air carrier shall forfeit its right to claim any addifional incentives for that route offered through this Program starting on the date service is reduced. Reducing frequencies on the route during the incentive period to less than an agreed upon level will reducethe amount of die financial incentiveand/or result in a proportionate reimbursement to the Airport for dollars -already spent The airline will also forfeit any future incentives on theirroute(s) for a period of 24months rlit chooses to fully cease service on the route(s). d the airline exits the PSP market entirely it will forfeit any future incentives for 24 months starting on the first day after the airline ceased operations at PSP. 7. At no time shall the Citycif Palm Springs providea rebate to an airline for participating in this Program. 0 Resolution No. 25214 Page 11 ' Stipulations for Fee Waiver Incentives 8. Forthe purpose of determining eligibility, affiliated airlines,joint venture paqrt,s a -3 P•eaecessor and successor airlines in an arme merger or acquisition shall be treated as a single carrier and will not be considered anew entrant to PSP. A regional carrier is eligible for the Program if it markets and sells as service independent of a branded carrier which currently offers service at PP. 9. If an air carrier receives benefits under the Program and exits a route, or the PSP madCet, during the incentive period, the air carrier shall repay the Cityof Palm Springs the total amount of all incentives prewauslytakenfor the qualified rcu else Such repayment shall be the Airports sole compensation and remedy for the air carrier's reduction, termination, or discontinuance of flightslroutesphorto the expiration of the incentive period. The Cityof Palm Springs, at its sole discretion, may consider wah4ngrepayment of incentive benefits if, after operating the route(s) fora minimum of months, the air carrier can provide documented proof that the incentivized route(s) srare not viable. 10. All condmons for receiving incentives will be documented in the Memorandum of Agreement between the airline and the City of Palm Springs and are subiect to approval by the appropriate City of PalmSprloes:TheMemorandumofAgreementmustbesignedwithin60daysof.announcememAnycannerthatfails to comply shall forego all incentives in this o os e- 11. Once budgeted funds for this Air Serv,a '. ram, marketing and waivers, haw been expended forthefiscal yeartheprogram shall besuspended unil additional funds are approved. The Executive Director of Aviation, their designee, or the Cityof Palm Springs has the to to amend, temporarily suspend, modify, alter, or cancel this Ar Service Incentive Program at anytime without notice. Funds budgeted for this program shall be determined annually during the City of Palm Springs annual budget process. Funding levels Wary year to year, 12 Daily service must operate at least fivedaysperweek,andless-thandailyservicemustoperateatleasttwodaysperweelcOnceanairlineannouncesserviceon an unnerved route Twill beconsidered served and any subsequent announcementsbyother airlines will fall under other applicable incentive options if any are applicable. 13 Target airport incentives are offered to me first qualifying airline to announce. After a target airport is announced, it will be considered an existing route and will no longer qualify for target airport incentives. 14. Total marketing funds for fiscal year 24125Uuy1,2024-June 30,202$is$25UNand total program fee waivers will not exceed f1,00QODDfor thistime period. Once marketing funds and/or fee waivers are exhausted, the program will be suspended until additional funds are approved oranew fiscal year begins. Resolution No. 25214 Page 12 Additional Marketing Support 1. The Airport will host a press conference, if requested, issue press releases, and use social channels to announce new route(s). 2. TheAirportwill work with the airline to select media options for advertising new service if requested. 3. The Airportwill work with local organizations, such as chambers of commerce,to publicize new service. 4. TheAirportwill host an inaugural eventfor all new routes if requested. 5. The Airport will feature the newroute�s)on its website for a pedodof up to 60 days following the announcement if requested 6. The Airport will provide free advertising on its in -terminal digital advertising networks for a period of up to I 60 days beginning withi n the first 60 days follovdngthe announcement if requested.