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Commission commits $220,000 toward regional air-service development memorandum of understanding
Summary
Washington County agreed to participate in a regional minimum-revenue guarantee to recruit new low-cost air service to Tri-Cities Airport, committing $220,000 as part of a multi-year MOU approved by the commission.
The Washington County Board of County Commissioners voted to approve resolution 25-03-05, authorizing a memorandum of understanding to support Tri-Cities Airport’s air-service development project and committing $220,000 as Washington County’s portion of a regional incentive fund.
Commissioner Weitzler presented the committee recommendation and an airport representative described the plan as a “minimum revenue guarantee” used to attract a new low-cost carrier and new routes. The airport representative explained that federal and FAA rules limit airports’ ability to recruit a specific airline directly, so the MOU and partner fund create an incentive pool for carriers to add service.
Speakers from several jurisdictions said the funding is intended to be pro rata and that partner localities (Sullivan County, Kingsport, Johnson City, and the two Bristols) have been approached to contribute. The airport representative said Sullivan County had already approved $240,000 and Kingsport $250,000, and that Bristol, Tennessee, Bristol, Virginia and Johnson City were considering similar commitments. The funds would form part of an approximate $2,000,000 regional pool intended to underwrite shortfalls in ticketed revenue (including ancillary revenue) for new routes during early operations. The representative said the guarantee is paid only to the extent actual ticketed revenue falls short of target levels; if an airline exceeds expectations the committed funds may not be spent.
Commissioners asked whether the contribution is effectively seed money and whether private-sector partners were participating; the airport representative said private contributions are included in the planned public-private partnership. Consultants working on the project indicated historical experience shows additional low-cost carrier competition typically reduces fares 7–9% on average across carriers in a market.
The commission approved the resolution on a recorded vote of 11 yes, 4 absent.
