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Business Journal Editorial Draws Rapid Response
YOUNGSTOWN, Ohio -- The editorial published in the MidApril edition of The Business Journal, in subscribers’ mailboxes this week, is drawing rapid response from the person leading the campaign to recruit United Airlines to the Youngstown-Warren Regional Airport.
Dan Dickten, airport aviation director, rebuts our assertion that United’s demand for a revenue guarantee of $1.75 million “crosses too many lines” by asking local government and local business to contribute to a pledge pool. “We say everyone’s limited funds can be put to better use,” the editorial concludes (DOWNLOAD EDITORIAL PAGE).
Dickten responds that such a revenue guarantee “is absolutely something that business and governmental agencies in the Mahoning and Shenango valleys need to fully endorse, and are endorsing.
Here is full text of Dickten’s response:
In response to the Mid-April 2014 Business Journal Editorial, “What Price Passenger Service?” Yes, a revenue guarantee for United Airlines to serve the Youngstown-Warren Regional Airport is absolutely something that businesses and governmental agencies in the Mahoning and Shenango Valleys need to fully endorse, and are endorsing.
The shortfall for the $1.75M needed Revenue Guarantees has gone from $550,000 to $246,000 in less than three weeks due to the contributions from local business and governments. They all understand that United would be taking a huge risk to fly from the Youngstown-Warren Regional Airport; given there has been no daily scheduled service at YNG in over 12 years and therefore no recent passenger data from which to compare with. The need for financial assistance is simply a business decision the airline gets to make because they have something we need; daily air service, and the airline doesn’t wish to lose money providing that service to us. T
The revenue guarantee keeps the airline profitable at a nominal margin. Once the route sustains itself, in this case there is a high probability it will within 4 – 8 months, the subsidy stops all together and United Airlines is on its own to operate without subsidy. Any funding we have remaining can either be used for other destinations, or in some cases possibly returned to the originator. Most cities that have not had daily service in over 12 years would be grateful to have such an opportunity afforded them by an airline like United Airlines.
Airlines are very risk averse nowadays as a result of tumultuous decades of financial losses and uncertainty. Revenue guarantees for “risky” markets is how ALL airlines go about their business of providing air service to communities in need of connectivity to the rest of the world. The fact that United earned $1.1 billion in 2013 has no bearing on this business proposition whatsoever.
The BJ Editorial made the assumption that United would provide one daily flight between Youngstown and Chicago – O’Hare. The service, if approved, actually starts with two daily round trip flights (early morning and late afternoon, and could increase to three daily flights with a mid-day flight if the market proves to be profitable.
The BJ Editorial made the statement that the price is too high. Under what pretenses was such an assumption made? United has agreed to keep the fares the same as can be purchased in Cleveland and Pittsburgh. With the fares at the same cost as found at CLE and PIT, and only $6.00 per day Long Term Parking ($30.00 maximum per week) and $7.00 per day Short Term Parking ($35 maximum per week) at YNG, not spending gas and paying tolls to get to the other Airports one to two hours away, and the time saved (Time Saved being of the utmost importance) it will actually be cheaper to fly from YNG to Chicago and the over 130 one-stop connecting destinations beyond Chicago. Remember, this is more than just service to Chicago, this is also service to anywhere in the world through Chicago.
We are very close to reaching our $1.75M revenue guarantee goal . . . We should have a decision from United in the coming months regarding the status of its service to our community. And hopefully we will not need all of the revenue guarantee funds to sustain it.
Copyright 2014 The Business Journal, Youngstown, Ohio.
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