HomeMy WebLinkAbout11/5/2014 - STAFF REPORTS - 2.K. A.OQ Y AL M Spy
iy
c
V N
CITY COUNCIL STAFF REPORT
C4�lFORN`P
DATE: November 5, 2014 CONSENT AGENDA
SUBJECT: AIR SERVICE INCENTIVE PROGRAM FUNDING AWARD TO WESTJET
AIRLINES.
FROM: David H. Ready, City Manager
BY: AIRPORT
SUMMARY
This action seeks authorization for the allocation of Air Service Incentive funding to
WestJet Airlines for expanded air service between Palm Springs International Airport
and the two Canadian cities of Vancouver and Calgary.
RECOMMENDATION:
1. Approve Air Service Incentive funding for WestJet Airlines in an amount not to
exceed $52,500.
2. Authorize City Manager to execute all necessary documents.
STAFF ANALYSIS:
To promote the growth of commercial airline service at Palm Springs International
Airport, an Air Service Incentive Program was approved by the City Council in 2010.
The intent of the program was to provide marketing assistance to both new and existing
PSP air carriers that elect to operate new or expanded air service. To date, the City
Council has approved funds to support seventeen new or expanded routes into PSP by
ten different airlines including WestJet, Virgin America, Air Canada, Frontier, United,
Allegiant, Alaska, Delta, Sun Country, and American.
All of these seventeen new or expanded air service routes, funded by the Palm Springs
International Airport Air Service Incentive program, have been a contributing factor to
the airport's record growth in passengers and visitors to the entire Coachella Valley.
For example, 2013 was already a record passenger activity and airline capacity year,
and 2014 now proves to be an all-time record year with counts up 9.4% year-to date in
total passengers.
ITEM NO. �._
City Council Staff Report
November 5, 2014 - Page 2
Air Service Incentive Program Award WestJet Airlines
WestJet Airlines, which is one of PSP's fastest growing airlines and provides direct
service to five Canadian cities, has announced it will be increasing air service capacity
to Vancouver and Calgary this season. Based on the magnitude of the increase the
airline is eligible and has requested participation in the Air Service Marketing Incentive
Program. The amount of marketing funding under consideration today is in accordance
with the program's eligibility. WestJet has served the greater Palm Springs market for
many years with seasonal service to Edmonton, Winnipeg and Toronto, and year round
to Vancouver and Calgary. These Canadian cities are PSP's only direct international
destinations and one of the Valley's fastest growing markets for both tourism and part-
time resident status. The added capacity to Vancouver and Calgary by WestJet Airlines
will allow for growth in origination and destination passenger travel, and provide
enhanced connections to Canada and other international cities.
The ultimate goal of this marketing incentive funding is to provide short term fortification
of the airline's own marketing and facilitate the routes ultimate self-sustaining status.
The Airport Commission voted unanimously at its October meeting for this funding
support as presented.
FISCAL IMPACT:
Because WestJet is increasing capacity in January 2015, with 15% to 45% added
frequency, they will be eligible for an aggregate amount not-to-exceed $52,500. Funding
for this expenditure will be debited from the Airline Incentive Fund account 415-6002-
45521 which has an approximate $250,000 balance.
These marketing and promotional fund expenditures from the PSP Airport Air Service
Incentive Program are an investment in future air service growth. The resulting increased
passenger traffic will generate a direct and indirect economic financial benefit to the
airport and the Valley's tourism industry. Increased airport revenues from Passenger
Facility Charges (PFC's), food and gift sales, car rentals, vehicle parking fees, aircraft
landing fees, fuel flowage fees, and other sources all contribute to a viable return on
investment.
Thomas Nolan
Executive Director, Airport
David H. Ready, Cit er
02