Salem city councilors authorized the city to spend up to $300,000 to subsidize flights out of the Salem Airport, with the hope of getting a new carrier to the negotiation table after losing Avelo Airlines over the summer.  

Councilors voted 6-3 to authorize $100,000 of general fund dollars per year for three years to bolster $1.2 million raised by Travel Salem, Fly Salem, Marion County and other private donors.

The city’s share of the money was already earmarked for the airport and would have been spent on airport operations.

The $1.5 million will be offered to a possible future commercial air carrier as a pot of subsidies it can tap if ticket sales are lackluster, according to a staff report from Public Works Director Brian Martin.

The arrangement is similar to subsidies provided to Avelo which pulled out of Salem and the entire West Coast over the summer after about two years providing service to and from Las Vegas and California. 

The minimum amount of subsidies needed to bring a new airline to the negotiating table is $500,000 per year for three years, Martin said. 

Mayor Julie Hoy and Council President Linda Nishioka voted alongside Councilors Vanessa Nordyke, Paul Tigan, Shane Matthews and Deanna Gwyn to authorize the funds. Councilors Irvin Brown, Mai Vang and Micki Varney voted against authorizing the funds. 

Varney was the most vocally in opposition to supporting commercial air service because she felt that the city’s resources should be focused on other matters. Earlier in the meeting the council approved more than $600,000 to pay for a new plan to increase police and cleaning crews downtown and in northeast Salem and to stand up a new crisis response team run by the fire department. 

She said Salem residents made it clear what their priorities are in a recent survey. 

Safety and livability “were the things identified on the survey. I didn’t see commercial air on the survey,” Varney said. “At this point I can’t support this this evening just because we are investing (safety and livability package) in something the community has asked for, broadly.” 

Varney also said if the city does bring in another commercial airline, the airline should have to pay more in fueling and other fees to help offset the city’s costs. 

Unfortunately, Martin said, getting companies to pay fees, at least in the beginning, is easier said than done. 

“When we actually negotiate agreements with a carrier to come in, they look for breaks on a lot of these things,” Martin said. “So even though we would offer this (minimum revenue guarantee) to them, we would likely expect them to want to have reduced fuel flowage fees or landing fees the first couple years of service.” 

In mid-November, the airport will lose its federalized status and the airport’s Transportation Security Administration equipment would go up on a list to be removed and transferred to eligible airports. 

Securing a new airline or at least a letter of intent before then would help avoid possible layoffs, Martin said. If the airport loses federal status, four and a half jobs would be cut. Martin said that wouldn’t necessarily mean people would get laid off but that would depend on conversations leading up to the next budget cycle. 

Tigan said he believes that the money set aside for subsidies is not enough and that the city should work to build up a bigger fund. He noted that other cities were able to quickly pick up new air carriers when Avelo shut down its West Coast flights over the summer because they had money ready to go to offer subsidies.

“That is not something we have, and I don’t know that that is what’s being set up. It seems like what we are doing is doing Avelo 2.0., and that feels like it’s going to lead to the same result,” Tigan said.

Martin said while more money gives Salem a better chance at securing a deal, he wouldn’t discount the community contributions. Martin said the $1.5 million is the minimum but also a good start for bigger things in the future. 

Tigan said the city has already made too big of an investment in its airport to not grow commercial air service. 

“We have made a significant commitment and we will continue to make a significant commitment as this moves forward,” Tigan said. 

Matthews said he agreed with Tigan and that growing air service should involve ensuring the city doesn’t have to rely on one single airline in the future.

Contact reporter Joe Siess: [email protected] or 503-335-7790.

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