Air-service push enlists business

Tourism industry and airport officials are looking for northern Nevada businesses to play a bigger role in community-wide efforts to improve air service at the Reno-Tahoe International Airport.

The Reno-Tahoe Regional Marketing Committee — a coalition of visitor authorities in Reno, Lake Tahoe and Virginia City, major casino/hotel properties in Reno, and the airport — is talking to all kinds of businesses about becoming members and helping bankroll work to add new routes.

The 13-year-old group, which has spent $8.4 million partnering with the airport and airlines to promote the region, thinks it’s time area businesses step up.

“The corporate community has kind of gotten a pass until now because tourism has always written the checks,” says Chris Baum, president and chief executive officer of the Reno-Sparks Convention & Visitors Authority and current chair of the committee. “Tourism can’t bear the total brunt. We need to give the business community a program to sign up for.”

The idea is better air service benefits everyone, from the hotels filling rooms to the visitors’ authorities booking conventions to businesses and individuals traveling across country, now making multiple connecting flights.

“Going back east can eat up an entire day,” says Baum. “If you’re a business traveler, time is money.”

The good news, says Baum, is everyone has their sights set on the same routes: Washington, D.C., New York City and Chicago.

To do so, the committee is also looking to expand beyond its original charter of marketing the region. It is studying creation of a fund, possibly subsidized by the state, to guarantee flight loads.

The airline industry, which has been undergoing consolidation in recent years, is more than ever focused on the bottom line and long-haul, rather than short-haul, service. Southwest Airlines, for example, recently dropped service from Reno to Oakland, Calif., Seattle and Portland, Ore. (Alaska Airlines is picking up some of the slack, this month announcing additional service the latter two destinations.)

“With the merger of American and US Airways, there were several gates in New York and D.C. that these airlines had to give up. Southwest and JetBlue were the benefactors of these opening gates,” says Pat Flynn, executive director of hotel operations and sales at Peppermill Resort Spa Casino in Reno. “Since Southwest is not adding planes to their fleet, they are pulling less profitable planes in favor of adding planes in New York and D.C. that have a higher fare and corporate traveler.”

In its strategic five-year plan, released in December, the airport said commercial airlines want flight loads of 80 percent or better. Over the last few years, flight loads in and out of Reno have hovered below and above that mark, reaching 82.2 percent for 2013.

One way to keep the airlines happy, and to retain or add service, is to guarantee load by making up the difference if a flight is undersold. The airport can’t do it due to Federal Aviation Administration restrictions, but a third party or the state can.

“Load guarantees are complex, but you basically have an agreed upon break-even and when they fall short there is a fund in place where dollars can be drawn,” says Baum. “It was first used in places like Vail, Colo., where they had to buy service from the airlines.”

So the group is also thinking about approaching the state to create a transportation fund that could be tapped into by local entities for their specific needs such as load guarantees for Reno or for ground transportation in Las Vegas.

The group hasn’t determined whether new legislation is needed or how the fund might be organized, but any help is welcome.

“Anything the state can do in terms of matching funds,” says Tray Abney, director of government relations for The Chamber in Reno. “It’s a real chicken-and-egg problem. We need the air service to get business but we need business to get the air service.”

But it’s important that the committee, as well as the state, continue to promote the area, say airport officials.

“We have to educate the rest of the country about why we have such a great region to fly to,” says Brian Kulpin, vice president, marketing and public affairs at the airport. “When you turn on a TV, you’re bound to see Las Vegas ad or Texas or Utah and you’re not seeing one for Reno-Tahoe.”

“For our size town we have the best airport and facility with great restaurant and shops,” says Quentin Koch, the airport’s new vice president of air services development. “The next step is to create demand.”