Yakima, Wash. Air Terminal: Buying An Airline's Interest

The Yakima Air Terminal hired a consulting firm to study the demand for expanded air service and eventually help the airport court prospective airlines.


Airlines must make a substantial upfront investment to set up service in a new market, and in many cases they've found that a community's rhetoric doesn't match its ticket purchases.

Now, Taylor said, airlines are asking communities to ''put your money where your mouth is.''

That usually means creating what's known as a travel bank, like the one Central Oregon recently used to secure twice-daily jet service on Delta between Salt Lake City and Redmond Airport, which serves 200,000 people, including the growing city of Bend.

Roger Lee, executive director of Economic Development for Central Oregon, said the community had been trying for years to expand its air travel options - which already included service to Portland, Seattle and San Francisco - but failed to generate interest from any new carriers.

Then they hired Mead & Hunt to make a pitch last August to Delta. Their proposal included: a $500,000 federal grant - just like the one Yakima decided not to apply for this year - that Central Oregon had secured nine months in advance; $450,000 in marketing support; and a commitment by local businesses to at least $500,000 worth of travel on Delta or its code-share partners.

By the first of the year, 116 local firms had put $626,000 in the travel bank. Lee said the size of the contributions was not as important as the number of businesses participating. Businesses that didn't fly on Delta's routes were not encouraged to make large commitments. Many companies made a minimum $2,000 advance purchase, with an eye toward attracting the new airline and thereby increasing competition and lowering fares on the carriers they use, he said, adding, ''We wanted to show broad support.''

The travel bank is designed to guarantee a minimum amount of revenue to the airline during the difficult six- to 12-month startup phase, when travelers are still getting used to the new schedules and routes.

Lee's organization manages the travel bank, protecting businesses from losing their money if the airline goes out of business or cuts service to the area.

It remains to be seen whether Yakima will be eager to create incentives, such as a travel bank, required to lure a new carrier.

''Knowing the corporates ... I don't think they're going to go for that,'' said Snyder, whose business is split evenly between corporate and leisure travelers.

''They want to fly on the airline that's cheapest or most convenient to them. They don't want to be tied to one airline because they've made an agreement with them.''

Dave McFadden, president of New Vision, the Yakima County Development Association, said, ''It's certainly plausible that we could develop a travel bank.'' Although his group is naturally positioned to manage such an effort, he said New Vision is occupied with its primary goal of marketing the Yakima Valley to outside companies and helping local firms expand.

''I've never been busier in my life,'' he said.

Lee acknowledged that launching a campaign to attract an airline and managing a travel bank is a lot of work. ''It's all-consuming,'' he said.

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