Wednesday — February 18, 2004

California flights gain, but not profitable yet

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By PAT MURPHY
Express Staff Writer

The Sun Valley Company was reimbursed last week for its $600,000 subsidy guarantee to the new Horizon Airlines flights between California and Friedman Memorial Airport.

A check from the U.S. Department of Transportation made payable to the city of Hailey was endorsed by Hailey Mayor Susan McBryant and turned over to the Sun Valley Company.

The circuitous transaction stems from the city of Hailey acting as official applicant for a $600,000 grant from the Small Communities Air Service subsidy program. To launch the Horizon Airline schedule in December 2002, the Sun Valley Company posted a $600,000 guarantee up front to help Horizon defray costs.

Although the new service has not posted a profit, it’s being hailed as a significant step in providing more travel access to the Wood River Valley.

Sun Valley Company marketing director Jack Sibbach said "these types of programs take three or four years to pay for themselves," adding that the service "has been good for the economy of the whole area."

A survey, he said, shows that about 30 percent of the travelers using the service said they came to the Wood River Valley because of the flights.

Sibbach said that in comparing December 2002 and December 2003 month-for-month, the load factor on the daily flights of the 70-passenger DeHaviland Q400 propjet from Los Angeles had improved, increasing from 63 percent in December 2002 to 66 percent last December.

He said Horizon Airlines reports its costs for the daily flight from Los Angeles to Hailey and return at $11,387 each. Cost of the daily roundtrip flight from Oakland at $10,500 per day each.

For the 12 months from December 2002 to December 2003, Sibbach said the airline posted total revenues of $2,875,146 for 662 flight operations against costs of $3,769,097, for a shortfall of $893,951.

The load factor was only 41.7 percent, Sibbach reported.

The DOT grant covered $600,000 of the loss, while Horizon absorbed the remaining $293,951, Sibbach said.

The guaranteed service will continue through the end of March, Sibbach said. Sibbach said the Sun Valley Company is negotiating with Horizon to resume the service this summer, when the area attracts a bonanza in visitors for various events.

There’s "a 50-50 chance of keeping the Los Angeles service from mid-June to mid-September," Sibbach said. "Horizon said it’ll consider it."

The Idaho Mountain Express is distributed free to residents and guests throughout the Sun Valley, Idaho resort area community. Subscribers to the Idaho Mountain Express will read these stories and others in this week's issue.