Phoenix-Mesa Gateway Airport May Get Dumped By Allegiant Air

By Kristena Hansen
Published: Tuesday, June 16, 2015 - 6:22pm
Updated: Wednesday, June 17, 2015 - 8:24am
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Allegiant Travel Company
Allegiant Air plane.

Phoenix-Mesa Gateway Airport may be adding flight service to San Diego, but it could lose what is currently its only airline, Allegiant Air.

Allegiant’s threats to pull out of the east Mesa airport after eight years stem from a proposed $1.3 million-incentive package to Portland, Maine-based Elite Airways to add flight services to San Diego and Salt Lake City starting in September. Allegiant took issue with the latter, saying it’s unfair to subsidize flights to a certain city that would be in direct competition with its existing routes to nearby Ogden and Provo, Utah.

When the proposal went up for a vote Tuesday, Gateway’s board of directors opted for only the San Diego service and at least $500,000 was subsequently wiped away from the initial incentive offering.

“Allegiant is like family to the airport authority and they grew up at Gateway Airport and Gateway Airport grew up with them,” said Gateway spokesman Brian Sexton. “They expressed concerns about having some incentivized competition in Salt Lake City and because their opinion matters to the airport authority, that destination has been postponed to be reconsidered at another time.”

But that still didn’t do much to appease Allegiant.

Brian Davis, Allegiant’s vice president of marketing, said despite Tuesday’s decision, the carrier still is serious about possibly relocating to Phoenix Sky Harbor International Airport as early as February next year.

“You want to be careful that we don’t pin it on one agreement that was voted on or approved or not  this morning,” Davis said. “There is a whole history of deceit that has eroded our relationship with the airport administration and it’s hard for us to see how we move forward with an airport administration who has been deceitful.”

Gateway officials said the airport has taken a $1.2 million-revenue hit since Spirit Airlines and Frontier Airlines left in 2013. Thus, as a way to help attract more carriers and expand flight operations, the board in February approved a new incentive policy targeting a dozen cities, including Salt Lake and San Diego.

That new policy was the basis for Elite’s incentive package. It includes a mix of waived airport fees and the airport covering some revenue losses when a flight is less than 70 percent full.

The latter incentive structure, dubbed the ‘carrier revenue guarantee,’ is the sticking point for Allegiant. Davis said the airport shouldn’t hand out taxpayer money to subsidize services to specific cities, but rather leave a route's success to the free market.

Additionally at the February board meeting, Keith Hansen, Allegiant’s director of airports, told the airport board that they’d likely pull out of any market that a competitor was incentivized to also operate in, according to meeting minutes.

However, Davis said the staff's PowerPoint presentation given during that meeting omitted only Salt Lake City, so Allegiant assumed that the market was off the table.

“Our team who manages these relationships has been down there in Phoenix meeting with several leaders of the five-member government and to see maybe if we can salvage this relationship at the board level, because it’s hard to see how it’s salvaged at the airport management level at this point,” Davis said.

Sexton confirmed that Salt Lake was the only city omitted from the presentation, but by accident. He also noted that Salt Lake was explicitly named in the incentive policy, which was included as part of the meeting agenda and Allegiant is just as eligible for the incentives as any other carrier.

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