REPORT TO THE CITY COUNCIL
June 30, 2016
FROM: KEVIN R. MEIKLE, Director of Aviation
Airports Department
SUBJECT
Title
Approve an updated Incentive Program for Scheduled Domestic and International Air Service for Fresno Yosemite International Airport (Council District 4)
Body
RECOMMENDATION
Staff recommends Council approve Fresno Yosemite International Airport's (FAT) updated Incentive Program for Scheduled Domestic and International Air Service (Incentive Program), which replaces the current incentive programs for Domestic Air Service and Scheduled International Air Service.
EXECUTIVE SUMMARY
FAT competes for air service in a dynamic environment in which airports pursue additional service by highlighting the strengths of their service areas, the potential profitability of new routes, and by extending incentives to reduce airlines' start-up costs. This proposed updated Incentive Program enhances FAT's ability to compete for limited airline resources and supports our key goals of attracting additional service and fostering competition on existing routes - a key factor in reducing airfares. Refer to Attachment A.
Under the existing domestic incentive program, air service is segregated into short-haul, medium-haul, and long-haul categories and offers incentives up to $95,000 (combined marketing support and landing fee waivers). The updated Incentive Program is market-based (not distance-based) and provides incentive levels commensurate with the market.
The updated Incentive Program is also more consistent with other programs in the industry, and therefore more competitive. Refer to Attachment B.
BACKGROUND
Airline incentive programs aim to attract additional sustained air service to an airport. FAT has an impressive record in this area. Airline initiative program success stories include AeroMexico and Volaris initiating service to Guadalajara in 2011, service that now accounts for 11 percent of FAT's passengers, and Alaska introducing service t...
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