Airport(s):
Santa Fe Municipal Airport (SAF)
Abstract:
The Office of the Chief Counsel responded to letters from New Mexico Airlines and the Airport Manager at the Santa Fe Municipal Airport (New Mexico) inquiring whether an airport sponsor may base the eligibility of a fee waiver or discount on a distinction between interstate and intrastate air service.|Airport sponsors may not use airport revenue to directly subsidize air carrier operations. However, a sponsor may use funds other than airport revenue (or a community organization or regional economic development may use its own funds) to offer a fee waiver or discounted landing or other fees during a specified promotional period to support new air service. (p. 1).|If an airport sponsor offers incentives during a specified promotional period to support new air service it must offer the waiver or discount to all users that are willing to provide the type and level of new service that qualifies for the promotion period. FAA considers “type of service” to mean nonstop, one-stop, etc. FAA considers “level of service” to mean frequency of service (e.g., three times per week, daily, etc.). (pp. 1-2).|The incentives must specify the destination to which the waiver/discount applies. A sponsor may not promote intrastate or interstate service by broadly offering incentives that apply to any destination within or outside a particular state. However, airports are free to select specific city destinations inside or outside of the airport’s state. An airport sponsor that sets a broad intra/interstate distinction upon its incentive program may fail to comply with Grant Assurance 24. (p. 2).|The incentive must be for new service. FAA does not recognize repeated seasonal service, upgrade of equipment type, or increased number of seats on existing flights as new service. (p. 2).|An airport may not specify the type of aircraft the will qualify for the incentive program. For example, targeting only low cost carriers would violate Grant Assurance 22 and could possibly violate Grant Assurance 23. (p. 2).|An airline starting or conducting service to a destination other than that promoted by the airport should not be eligible for the same incentives provided to an airline serving the promotional destination(s). (p. 2).
Index Terms:
Economic Nondiscrimination (Grant Assurance 22)|Exclusive Rights (Grant Assurance 23)|Fee and Rental Structure (Grant Assurance 24)|Incentives for air service