Air Ketchum discontinues scheduled flights
Owner says he cant compete with competitions subsidy
By TRAVIS PURSER
Express Staff Writer
"I was totally blindsided."
Leonard McIntosh, Air Ketchum president (Express Photo by Willy
Less than two weeks after the Ketchum and Sun Valley city councils
unanimously voted to subsidize Horizon Air for up to $30,000 in losses in exchange for
service between Friedman Memorial Airport and Boise, Horizons competitor, Air
Ketchum, announced it was ceasing scheduled operations.
The city council actions came after $80,000 in similar guarantees was
approved by the Sun Valley Company, the Sun Valley-Ketchum Chamber of Commerce and Elkhorn
Air Ketchums decision to halt its scheduled service was announced
Thursdaythe day after Horizon Air announced it would begin Sun Valley-Boise service
On Monday, however, Ketchum city attorney Margaret Simms told the Idaho
Mountain Express she had concluded the city shouldnt go forward with a $10,000
guarantee for Horizon because of questions about the guarantees legality.
Leonard McIntosh, Air Ketchums president, said in an interview
that he was "blindsided" by the subsidieslearning about the city council
decisions after returning from a vacation in Italy.
"Frankly," he said of the council members who made the
decision, "theyre just too stupid to realize what they did."
McIntosh, 59, who had been operating the scheduled service for about
four months, spoke to a reporter last Thursday before piloting his companys last
scheduled roundtrip between Hailey and Boise. He said he believed Air Ketchum had been the
first locally-based airline to offer scheduled Sun Valley-Boise service.
The subsidies are earmarked to underwrite a daily Horizon Air
flight between Sun Valleys airport and Boise this winter, from Dec. 18 until April
1, in an effort to attract more winter tourism.
The carrier expects to capture a major chunk of business from southern
Californians who want to ski in Sun Valley, said Cheryl Temple, Horizons manager of
Seattle-based Horizon Air is a wholly owned subsidiary of Alaska Air
Group, a New York Stock Exchange-listed corporation that also owns Alaska Airlines.
McIntosh said he had no quarrel with private firms, such as the Sun
Valley and Elkhorn companies, kicking in subsidy cash to attract a larger competitor into
the ski market here.
But he was clearly disenchanted with the actions of elected officials.
"I didnt expect the community [service] I was
subsidizing" to be undercut by the council members backing a subsidy "to
my competitor," he said.
McIntosh said his subsidies for Air Ketchumnot yet in the
blackcame from a profitable charter service he has run out of Friedman airport for
more than a decade.
He also had harsh words for the Sun Valley-Ketchum Chamber of Commerce,
which he accused of "laundering" the Sun Valley City Council subsidy so that
council members couldnt be accused of breaking the law.
Under state law, he said, its illegal for cities to transfer
public funds to private carriers.
Sun Valley council members voted to raise the chambers annual
funding by $20,000 so the cash could be transferred to Horizon if the airline needed the
money to cover losses.
The Air Ketchum chief said he had no quarrel with Horizon Air, which he
called "a first-class airline."
In early September, Sun Valley Company marketing director Jack Sibbach
asked the two city councils to join the resort, Elkhorn and the chamber in the subsidy
Under the guarantee blueprint, as of Tuesday, Sun Valley Company will
cover $50,000 of a possible shortfall; the chamber, $20,000; Elkhorn Resort, $10,000; and
the city of Sun Valley, $20,000.
Presumably, any Horizon losses in excess of the $100,000 guarantee
would have to be picked up by the air carrier.
McIntosh said he doesnt think hell litigate the subsidy
because he would have to prove damages in a long, expensive court process and, he said, it
would be "an uphill battle."
Whats more, he added, he wont ask for time to plead his
case before either city council.
"I can read loud and clear what theyve done. Theyre
not interested in the service I was providing," he said.
McIntosh said he had no idea what the city councils were up to until he
returned to the Wood River Valley on Sept. 22 from Milan, where he had been vacationing.
He said he read a story about it in the Idaho Mountain Express.
"I was totally blindsided," he said.
A Cleveland native, McIntosh came to the Wood River Valley in 1988 to
start the Air Ketchum charter service. Last May, after one and a half years of waiting for
Department of Transportation and Federal Aviation Administration approval, Air Ketchum
began to offer 13 round-trips a week between Sun Valley and Boise involving two flights a
day, except for Saturdays and Wednesdays.
Until last week, he said, his eight-seat Beechcraft King Air had been
averaging two passengers per trip, and that he needed four a trip to be profitable.
A one-way fare, if bought from Air Ketchums Web site, cost $75;
purchased over the phone, the tab was $98.
A round-trip ticket between Boise and Sun Valley on Horizon Air, whose
Dash 8 planes will have a 37 passenger capacity, will range between $125 and $250 during
the ski season.
When asked whether some people could say that because his scheduled
service was not yet profitable and that the council decisions were an excuse to go out of
business, he said, "Actually, the revenue was very encouraging. Obviously, it was
going to take some time. But when the community chooses to subsidize the competition, it
doesnt give me a lot of reason to continue."
As a major ski destination, Sun Valley has long been plagued by its
difficult-to-get-to location. Ski area rankings by Ski magazine this month list Sun
Valley No. 1 overall among 60 United States resorts, but 58th for accessibility.
The addition of Horizons daily flights this winter is another
step toward eliminating that unwanted notoriety, Sibbach recently told Ketchum City
"Its not so much the money, but a philosophical
backing," he added, referring to the reason he sought support from the two city
councils. "This is a way the whole community can get involved."