Sunday , March 04, 2018 - 5:00 AM
OGDEN — For at least a decade, Ogden’s municipal airport has been a money pit for the city.
But officials there say the facility has the potential to be just the opposite — a revenue generator — and it’s that conviction that keeps them trying to solve the riddle that is the Ogden-Hinckley Airport, namely through commercial air service.
Every year — for more than 10 years now — the city has subsidized the airport at a rate of about $500,000 to $750,000. Coming from the city's general fund, officials say the money could better be put to use in other areas and continually raiding the fund to keep the airport afloat isn’t a long-term option.
To that end, the city brought commercial service to Ogden in 2012, with Allegiant Air offering twice weekly flights to the Phoenix/Mesa, Arizona area. Ogden Community and Economic Development Director Tom Christopulos said the city believes commercial service is the quickest, most efficient way to close the airport’s profitability gap.
In late 2017, the city tried to expand its commercial endeavor with Allegiant, briefly adding flights to Los Angeles and Las Vegas. But both of those flights were nixed shortly after they began, with Allegiant and the city pulling the plug due to low passenger numbers.
Today, the original Phoenix/Mesa flight is all that remains.
As the pair of new flights came on board, the city agreed to provide Allegiant with a $500,000 incentive in the form of a “revenue guarantee pot,” which would help cover losses if the flights weren’t immediately profitable.
Christopulos said the agreement was for Allegiant and the city to split profits and losses for the two flights, but shortly into both ventures, the entities were only splitting losses.
“We decided that wasn’t something we could continue doing as a city,” Christopulos said.
Ogden Chief Administrative Officer Mark Johnson said the city didn’t write Allegiant a $500,000 check, but only kept the fund available to them if it was needed. Since the flights were cancelled soon after the begun, the city will retain nearly all of the incentive money.
Christopulos said changes in the airline industry, specifically the expansion at the Salt Lake International Airport and the arrival of more lower-priced flights there, hindered Ogden’s commercial operation.
“We’re not sure how much oxygen the Salt Lake City airport will take out of the market yet,” he said. “But we’ll always be trying to work commercial service into the airport in some way.”
Christopulos said Allegiant mainly targets tourists with their enterprise, and so the city will look to move toward business flights, smaller aircraft and shorter regional flights that service the Intermountain West. They’ll also look to add aviation and aerospace businesses to the airport.
On Friday, President and CEO of the Ogden-Weber Chamber of Commerce Chuck Leonhardt sent an email to chamber members, asking local companies to send letters to SkyWest and Southwest airlines, expressing interest in new commercial flights at the airport.
“The Ogden-Hinckley Airport currently operates at a small fraction of its potential, with only two commercial flights per week,” Leonhardt says in the email. “The airport could easily handle up to 42 flights per week. Clearly, we have room to expand.”
The letter-writing campaign will dovetail with the city’s own effort to woo the two airlines.
“We believe that expanded commercial air service from the Ogden-Hinckley Airport will be a great benefit to our community, its businesses and the region’s economic growth,” Leonhardt said.
Since 2009, roughly during the same time the city has used General Fund money to bankroll the airport, the Federal Aviation Administration has provided the city with about $3 million in grants, according to USASpending.gov.
Within the next year, the city expects to receive $5 million from the FAA's Airport Improvement Program fund to pay for upgrades to three of the airport’s taxiways. The city would be required to provide a $500,000 match to complete the project.
Christopulos said that money is safe as long as the Arizona flight is still functioning.
The city has managed a municipal airport since 1928. The original facility sat on 200 acres in southeast Ogden and had only three gravel runways. The current airport was built in 1941, first known as Robert H. Hinckley Field, named after the Ogden native who once served as Assistant Secretary of Commerce.
In 1943, Western Airlines began mail and passenger service from Ogden, with United Airlines coming online in 1946. Both services ended in 1960 due to poor demand.
Despite the recent history of losses, Christopulos said the airport is still an extremely valuable asset (he guesses it’s worth $1 billion). The “Armageddon” question, as he calls it — when does the city cut ties and part ways with the operation — is hard to answer, he says.
“It’s a question we’ve thought a lot about, because we can’t keep losing money there like we have been,” he said. “If you want to play the ‘what if’ game to the very worst extent, we would sell the airport. But right now, that’s not a realistic option that anyone in the city is thinking about. It’s the last option, but we’re nowhere near ready to pull that trigger yet.”
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