Four airlines get $3.375M to promote 16 new routes
In the race to grow airline service and passengers, the Rhode Island Commerce Corporation and the Rhode Island Airport Corporation announced last week four airline carriers would be awarded a total of $3.375 million to promote 16 new routes flying out of Green Airport.
The funds will come from two sources according to Matt Sheaff, Commerce director of communications. He said the state budgeted $1.5 million for the Air Service Development Fund last year and another $500,000 in the current budget with the balance coming from RIAC.
Unlike some incentive programs being used in other parts of the country, the Rhode Island funds are restricted for the advertising and promotion of the new routes and not as a guarantee on airline revenues.
Use of the Air Service Development Fund was disclosed when the airlines announced flights at Green, but not until last week were specifies disclosed on amounts earmarked for each of the four carriers.
In a release Gov. Gina Raimondo justified the allocations on the basis that the airport is an important player in the state’s economy.
“T.F. Green Airport is on the move, bringing in 16 new routes this year alone, and significantly expanding its direct flight offerings. The Air Service Development Fund is key to supporting this progress and keeping our momentum going," she said.
In an effort to further stimulate the economy and open the state to additional business opportunities, representatives from Commerce, Rhode Island businesses, trade and tourism associations and elected officials including Mayor Scott Avedisian will participate in a trade mission to Ireland next week. Business meetings and/or tourism promotion events will be held in the following cities: Dublin, Belfast, Cork, Galway, Clare and Kinsale (Newport’s sister city).
“Given the direct flights out of T.F. Green Airport to multiple destinations in Ireland, this is a perfect time to embark on this mission, foster business opportunities, and showcase our great companies to an international audience,” Stefan Pryor, Secretary of Commerce said in a release issued last week.
The announcement on the allotment of funds to advertise the 16 new flights comes as the Rhode Island Commerce Corporation entered into a Memorandum of Agreement with the Rhode Island Airport Corporation setting a rate card for incentive disbursements for new service to domestic and international markets. The Air Service Development Council, which was set up to oversee the Fund, approved the agreement last week.
Sheaff said the program is available to all airlines serving Green initiating new service destinations from Rhode Island.
Under the Memorandum of Agreement, the Rhode Island Airport Corporation will administer all air service development marketing expenditures directly with the Carriers using the available air service development funds. Carriers adding new service to domestic markets are eligible for up to $200,000 in marketing funds and new service to international markets are eligible for up to $750,000 in marketing funds.
"We are working hard in connecting Rhode Island to the rest of the world in a meaningful way to serve the interest of our citizens.” Iftikhar Ahmad, President and CEO of Rhode Island Airport Corporation said in a release. "These flight routes are silk roads in the sky that bring peripheral economic activity to foster job growth in our community. These funds will be used to strengthen awareness around these flights so that we can accelerate passenger growth."
The following breakdown of disbursements was provided: Norwegian, six unserved routes (DUB, SNN, ORK, EDI, BFS, BGO) $1,875,000; Norwegian, two unserved routes (Guadeloupe and Martinique) $500,000; Frontier, three unserved routes (DEN, MIA, MSY) $485,714; Frontier, one unserved route (RDU) $200,000; Allegiant, three unserved routes (PIE, PGD, CVG) $171,429 and OneJet, one unserved route (PIT) $142,857.
In a recent interview with the Beacon, former President and CEO of the Rhode Island Airport Corporation and now executive director of the Connecticut Airport Authority, Kevin Dillon, said that through a combination of revenue guarantees, fee waivers and funds for marketing the Irish-based carrier Aer Lingus was enticed to initiate service to Bradley Airport. Dillon put a value of $9 million on the incentive package.
“Unfortunately,” he said of incentives to lure airlines and new service, “it has become the standard.”
Asked Monday what he thought of incentive packages, Mayor Scott Avedisian said, “Unfortunately that’s what it takes. It’s a very competitive market these days.”