Salem passenger flights one step closer as City Council OKs grant application

A coalition of business leaders pushing to bring commercial passenger flights back to Salem's McNary Field will apply for a $500,000 state airport grant next year, one of the biggest steps in returning the service to Salem as early as 2020.

Brent DeHart, a member of the Mid-Valley Commercial Air Service Steering Committee, said the group has focused on United Airlines and Alaska Airlines as "top candidates" to provide the commercial air service in Oregon's capital, though they have yet to approach the companies.

Following airline runs from the 1940s to 1990s, Salem flyers watched for years as commercial air service turned touch and go, including one of the latest sorties by SeaPort Airlines in 2011.

That forced residents and business officials to board in Eugene and Portland, the closest commercial service airports to Oregon's capital.

Enter the latest effort, which aims to connect Salem to Seattle, San Francisco or Denver.

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Advocates need from $1.7 million to $2 million for "risk mitigation" for their plan to take off, and began seeking pledges in June. That money acts as "skin in the game" and helps airlines offset possible losses, according to the committee.

They have so far garnered more than $250,000, said Curt Arthur, who coordinates pledges for the committee.

In a move supporting the venture, the Salem City Council voted this month to allow the Salem Area Chamber of Commerce, the coalition's financial agent and grant applicant, to apply for a Rural Oregon Airport Relief grant from the Oregon Department of Aviation.

DeHart, owner of Salem Aviation Fueling, said the money would pay for two things: recruiting an airline consultant to carry the committee through a two-year process; and providing a marketing fund to promote commercial air service in the region if Salem gets it.

Authorized by the 2015 Legislature under House Bill 2075, the rural airport program is paid for through 2-cent aviation gas and jet fuel taxes that sunset in January 2022.

The name "rural" may conjure images of small cities and smaller airports. But under state administrative rules, a rural airport is actually defined as "an airport that principally serves a city or metropolitan statistical area with a population of 500,000 or fewer."

Under the program, Crater Lake Klamath Regional Airport in April 2017 was awarded $70,200 to help with an "air service marketing plan," according to a September Department of Aviation report.

"ODA paid out a total of $48,002.45 and closed the grant after (the airport) lost commercial air service due to the airline pulling out after bankruptcy," the report states.

In another example, $66,420 was awarded to Southwest Oregon Regional Airport on the Oregon Coast for a "marketing campaign to increase passenger loads."

Another $104,000 went toward a rural air service economic study by ECONorthwest covering multiple Oregon airports, with the goal of further defining the rural airport program's mandate of "assisting commercial air service to rural Oregon."

The program had more than $2.1 million in unallocated revenue as of the September report.

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As it seeks $500,000 in grant money, the Salem Area Chamber of Commerce will need to show: how much airfare will probably cost, and what they're basing those rates on; what aircraft are expected to fly from McNary Field; and how the "applicant will maximize filling of seats," according to a city staff report.

Matthew Lawyer, a Department of Aviation program coordinator, said he could not comment on an application because it wasn't in front of him, though agency and chamber officials have met already.

Several business officials appeared Nov. 13 before the City Council in support of the commercial air service initiative.

In testimony, Scott Snyder, general manager of the Grand Hotel in downtown Salem, said commercial air service would boost room sales, consequently increasing in Transient Occupancy Tax collections and nearby retail sales.

"Salem hotels experience a vacuum on a weekly basis," Snyder said. The Grand Hotel sees 15 to 20 guest rooms check out on Thursdays because of Friday morning flights from Portland International Airport, and guests stay in Portland the night before, he said.

"How do I know that this happens? Well, my front desk is printing their boarding passes for them," Snyder said.

Tim Hay, who said he flies about 100,000 miles a year as part of a new job, said he was one of the people Snyder was talking about.

"We actually choose to have our meetings in Portland rather than Salem, costing the city of Salem businesses about $60,000 to $70,000 a year because there is no way of getting people from Portland down to Salem in an effective manner," Hay said.

Chamber spokeswoman Kate Gillem said the City Council's approval marked "one step in the journey toward bringing commercial air service back to Salem." She said rural airport grant applications can be submitted in the first quarter of 2019.

Pledges from business officials totaling $500,000 went toward attracting Delta Air Lines to Salem in 2007, but the airline's time here came to a close in 2008.

However, DeHart pointed to rising oil prices at the time as a big reason behind Delta's exit, with national and international economic factors undermining the service. Salem proved its viability as market for this a decade ago, he said, and now it's ten years stronger.

As far as potential airlines now, "our data points to United Airlines and Alaska Airlines being the top two candidates," DeHart said.

The key, he said, is for flyers to be able to connect to major hubs. "People could get one stop from Salem to Tokyo."

Email jbach@statesmanjournal.com, call (503) 399-6714 or follow on Twitter @jonathanmbach.

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