HomeMy WebLinkAbout06407 - AIR SERVICE DEVELOP INCENTIVE PROGRAM DELTA AIRLINES Kathie Hart
From: Caren Nelson
Sent: Wednesday, May 28, 2014 8:22 AM
To: Kathie Hart
Subject: Closing PO's
Good Morning Kathie,
FYI—
I am closing out the following PO's. Invoices are being forwarded to Andy in Finance today for processing. I am not
sure if this agreement will reopen next fiscal year or not (Mark Kiehl does not work here anymore), I guess we can
create a new agreement number if that occurs. O
PO# 14-0689 01/14/14 $25,000.00 Delta Air Lines - Salt Lake City A#6408 10/02/13
PO# 14-0685 01/14/14 $50,000.00 Delta Air Lines - Minneapolis A#6407 10/02/13
If you need anything else please let me know.
Caren Nelson
City of Palm Springs
Palm Springs International Airport
(T)760-318-3819 (F) 760-318-3815
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PALM SPRINGS INT'L AIRPORT AIR SERVICE INCENTIVE PROGRAM
PALM SPRINGS INTERNATIONAL AIRPORT
AIR SERVICE DEVELOPMENT INCENTIVE PROGRAM
EFFECTIVE JUNE 1, 2010
1. OBJECTIVE
Air service is a vital contributor to the City of Palm Springs and the entire Coachella
Valley, and it is widely recognized that that significant costs are associated with adding
capacity through larger aircraft, more flights, or new markets. The promotion of new or
additional capacity can be a critical factor in its success, acknowledging that airlines
may redeploy valuable aircraft assets to other markets if targets are not achieved.
The Palm Springs International Airport (PSP) Air Service Development Incentive
Program (the "Program") is designed to encourage and promote the expansion of
commercial passenger airline service, both seasonally and year-round. Such growth
can take place in new routes that are not currently served and/or through additional seat
capacity being added by incumbent carriers in existing markets. Funds are to be used
by the airline(s) to market and promote new services and/or significant year-year
increases in seating capacity.
The Program is non-discriminatory; any airline that meets the criteria can qualify to
receive benefits as outlined in this document. However, the airlines serving PSP today
are our valued tenants and customers, and it is greatly anticipated that both existing and
new carriers can take advantage of this program to expand service successfully.
2.TIMING OF PROGRAM AND DISTRIBUTION OF FUNDS
This Program is effective June 1, 2010, and may be continued until allocated funds
expire or at the discretion of Palm Springs International Airport.
Airlines meeting the requirements outlined in this document will be allocated the
qualifying funds on a first-come, first-served basis until the Program expires or total
funds for the Program are expended.
3. QUALIFYING REQUIREMENTS
To qualify for incentives provided by the Program, the airline must take action in one of
the following categories:
NEw ROUTE. Initiate a new route to/from PSP, defined as not being served within the
12 months prior to the qualifying service. The category of market, frequency, and
duration of operations as stated in Exhibit 1 (below) will determine the amount of
maximum funding.
PALM SPRINGS INT'L AIRPORT, 3400 E.TAHQUITZ CANYON WAY, PALM SPRINGS, CA 92262 1
PALM SPRINGS INT'L AIRPORT AIR SERVICE INCENTIVE PROGRAM
EXISTING ROUTES. Increase total monthly seating capacity, through additional flight
frequencies and/or larger aircraft, compared to the same month in the prior year
between PSP and the same airport. Note: For monthly year-year increases to
qualify, the additional capacity has to be in effect for a two week minimum within that
month.
In both cases, the metrics outlined in Exhibit 1 will be used to determine qualifications
for Program funds. In order to receive funding, each airline must do the following for
EACH qualifying route:
• Submit in writing (an emailed document is acceptable) confirmation of the new
route and/or year-year increase in monthly capacity;
• Request the funds in writing;
■ Provide an outline of how the funds will be deployed. The Program funds shall
be utilized solely for the purpose of promoting the new route and/or year to year
capacity addition. These promotional initiatives must be approved by PSP staff,
and copies of program specifics may be requested.
■ In the event that a service or capacity increase is suspended prematurely, the
airline shall be responsible for a pro-rated reimbursement of all marketing funds
spent.
EXHIBIT 7
NEW ROUTES Seasonql Seasonal Extended
Target Category Definitions/Requirements I ow Freq High Frecl Service
(up to amou (up to amounts 7$400,000
amountsNew Long Haul Hub 1,500 miles or longer $100,000 $250,000 or Focus City Not served within most recent 12 months
Focus City-50+daily departures
If NEW carrier to PSP(past 12 months) $200,000 $500,000 00,000
New Long Haul 1,500 miles or longer $50,000 $100,000 $150,0 00
Key Markets Top 25 D&D's with no nonstop service from
the region
If NEW carrier to PSP(past 12 months) $100,000 $200,000 $300,000
New Hybrid or No existing markets served nonstop from $50,000 $100,000 $150,000
Complementary Markets that specific airport(past 12 months)
If NEW carrier to PSP(past 12 months) $100,000 $200,000 $300.000
Increased Capacity- Existing markets-served within 12 months $7,500 $10,000
Shoulder or Peak Season Based on monthly year-year seat increases (Per Route) (Per Route)
PALM SPRINGS INT'L AIRPORT, 3400 E.TAHQUITZ CANYON WAY, PALM SPRINGS, CA 92262 2
PALM SPRINGS INT'L AIRPORT AIR SERVICE INCENTIVE PROGRAM
4. DEFINITIONS AND PROVISIONS
For purposes of determining the specifics of each qualifying route, the following
definitions shall apply.
1. New Market: The route between PSP and another airport that has not had
nonstop scheduled service within the most immediate 12 month period.
2. New Long Haul Hub or Focus City: An airport meeting the nonstop mileage
requirements stated in Exhibit 1, with the qualifying airline serving that airport
with 50 or more daily departing flights.
3. New Long Haul Key Markets: An airport meeting the mileage requirements
stated in Exhibit 1 and having sufficient passenger demand to be in the Top 25
Palm Springs (PSP) market list as defined by U.S. DOT data.
4. New Hybrid or Complementary Market: Includes specific airports that have not
had nonstop flights to/from PSP within 12 months, with no mileage limitations.
5. Existing Routes: Service between PSP and airports that currently have service
or have had nonstop scheduled flights within the most immediate 12 months.
6. New Carrier: Any airline brand that has not served PSP within the most
immediate 12 months. The addition of branded partners, such as the mixing of
mainline and regional carrier operations, does not qualify under this category, nor
does brand change due to merger or acquisition. An airline is no longer
considered "New" after one year from the initial commencement of service into
PSP.
7. Frequency Requirements: Due to PSP's seasonality, we encourage entry of new
service that includes low frequency operations. Exhibit 1 outlines qualifications
based on a combination of weekly flights and the duration of operations
expressed in calendar months.
8. Increased Capacity: To encourage growth in existing markets, this category
addresses currently served routes and measures year to year changes in total
monthly seating capacity. Due to seasonal service variations, a minimum of two
weeks of service is required within the month qualifying for funds.
9. Competitive Applications: If two air carriers announce plans to serve the same
new market, the incentives available under this Program shall be payable to the
first carrier that initiates service.
10.Funding Amounts: All values shown in Exhibit 1 are to be considered "up to this
amount" or "maximum" limits and are subject to availability of remaining funds in
the Program.
11.Payment of Program funds to qualifying airlines will be on a first come, first
served basis and determined by the date of initiation of the qualifying service.
Payments will be made at the end of each month of qualifying air service; in
cases where an airline qualifies for an amount of $200,000 or more, payments
will be prorated over a 12 month period beginning with the first month of
qualifying service.
12.Any carrier availing itself of the Program will be required to execute a
Memorandum of Agreement in a form determined by PSP. All marketing and
promotional funds are subject to approval by the Palm Springs City Council. The
PALM SPRINGS NT'L AIRPORT, 3400 E. TAHQUITZ CANYON WAY, PALM SPRINGS, CA 92262 3
PALM SPRINGS INT'L AIRPORT AIR SERVICE INCENTIVE PROGRAM
Program may be discontinued at any time or cease at any time due to expiration
of funds, and PSP reserves the right to modify the program or adjust funding
according to the level of air service provided.
13.Uses and Applications of Funds: It is not the intent of PSP to impose creative
control over promotional initiatives; Airport staff approval is required to ensure
that allocated funds are used to promote the new service or increased capacity.
Staff reserves the right to request specific information including copies of
advertisements or other details. Promotional actions and activities may include,
but are not limited to the following:
a. Specific advertising highlighting the qualifying PSP route;
b. Familiarization tours or events;
c. Media events;
d. Online contests and promotions;
e. Other activities as agreed to by both PSP and the airline.
14.Any carrier availing itself of the Program will be required upon request from PSP
to provide written certification that any and all funds provided under the Program
to the carrier were utilized solely for the purpose of promoting the new route
and/or year to year capacity addition. Failure to provide said written certification
shall result in repayment of any and all funds provided to the carrier under the
Program.
5.ADDITIONAL INFORMATION
This Air Service Incentive Program is consistent with the mission of Palm Springs
International Airport to preserve and enhance the City of Palm Springs' status as a
premier tourist destination and provide the region's citizens with access to the global
aviation system. All airlines are encouraged to review opportunities for expanded
service and discuss potential applications with airport staff. For more information
please contact Executive Director Thomas Nolan at (760) 318-3901.
PALM SPRINGS INT'L AIRPORT, 3400 E.TAHQUITZ CANYON WAY, PALM SPRINGS, CA 92262 4
PALM SPRINGS INT'L AIRPORT AIR SERVICE INCENTIVE PROGRAM
AIR SERVICE INCENTIVE AGREEMENT
This Memorandum of Agreement is entered into by and between the City of Palm
Springs (City), acting by and through its Executive Director of Aviation, and _Delta Air
Lines, Inc._(Airline) organized and existing under the laws of the state of _Delaware_,
and is intended to memorialize the agreement between the City of Palm Springs and
the Airline under the terms of the Palm Springs International Airport Air Service
Development Incentive Program (Program), approved by City Council on _October 2,
2013_, a copy of which is attached hereto and incorporated herein by reference.
The City and the Airline, by their signatures to this Memorandum of Agreement,
acknowledge that their agreement related to marketing incentives is to be governed by
the Program. Airline will provide _additional nonstop flights between Minneapolis-St.
Paul and Palm Springs International with sufficient year-year increases in flight
frequency to meet Program requirements. It is understood and agreed that the Airline
and the eligible new non-stop service or year-to-year increased capacity that Airline is
offering at the Palm Springs International Airport fall into Section of_Existing Routes_of
the Program and the maximum eligible marketing incentive is $_50,000 for the period
from _December 20131
to _June 2014_ . The funds shall be utilized solely for the
purpose of promoting the new route and/or year to year capacity addition. Upon
request from the City, the Airline shall provide written certification that the funds have
been so utilized.
It is the intent of this Agreement that the total amount of incentives shall be distributed
to the Airline in the form of monthly partial payments as determined by the City. Once
the total amount is paid to Airline by City, City will not assert any claims against Airline
for such total amount, and the total amount will not be subject to route or increased
capacity continuation.
These funds must be reimbursed or refunded on a pro-rated basis, rounded to the
nearest completed month, to City by Airline if Airline leaves the market and/or
discontinues the new non-stop route or increased service earlier than the qualifying
period for which funds were allocated. These funds must be reimbursed if Airline fails to
provide written certification as detailed above. In the event that Airline fails to refund or
reimburse such funds within thirty (30) days of City's request, Airline expressly consents
to City's right to issue an invoice for the unpaid amount and have legal claim to
payment. This remedy shall be cumulative upon all other remedies available to City.
In the event of any conflict between the provisions of this Agreement and the Program,
the provisions of the Program shall control.
The term of the Agreement shall be one year starting from the effective date of this
Agreement. At the end of the period, the Agreement is not subject to extension, but
shall terminate automatically.
111
PALM SPRINGS NT'L AIRPORT, 3400 E. TAHOUITZ CANYON WAY, PALM SPRINGS, CA 92262 5
PALM SPRINGS INT'L AIRPORT AIR SERVICE INCENTIVE PROGRAM
IN WITNESS WHEREOF, the parties have executed and entered into this Agreement as of the date first wrfften
above.
ATTEST: CITY OF PALM SPRING
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WITNESS my hand and official seal. WITNESS my hand and o dal seal. y /
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September 17,2014 September 17,2014
PALM SPRINGS INYL AIRPORT, 3400 E.TAHOUITZ CANYON WAv, PALM SPRINGS,CA 92262 6