Wednesday, December 9, 2009

Jackson touts success in air service

Offers future model for Wood River Valley?


By PAT MURPHY
Express Staff Writer

What may have been a little-understood insider's acronym in local aviation and tourism circles—MRG—probably will become a vital point of business conversation in the Wood River Valley once a replacement facility for Friedman Memorial Airport is opened and the quest for service by more airlines is launched.

How the use of the Minimum Revenue Guarantee (MRG) has fueled a literal explosion in airline service to Jackson, Wyo., was the theme of a briefing Friday, Dec. 4, for nearly 50 Wood River Valley business and political figures by Kari Cooper, manager of Jackson Hole Air Improvement Resources.

Cooper spelled out how Jackson business and civic interests resolved to attack a sluggish tourist economy by creating the new group, JH AIR, in 2002 and pouring more than $1 million a year into an MRG fund to lure service to the community by six airlines with MRG subsidies to cover losses, if any.

How valuable has the MRG been to the area's economy?

In response to a question by Sun Valley Co. director of development Wally Huffman of what Jackson's economy would be without MRGs, Cooper said without pause: "That's a risk we'd rather not take."

Today, Jackson is served by six air carriers—American, Delta, Northwest, SkyWest, United and United Express—with far-reaching routes nationwide on jets, including Boeing 757, Boeing 737, Airbus 319 and smaller regional jets.

In the seven years since it began operating as a 50C6 nonprofit organization, a coalition of some 200 business and civic interests has used a sophisticated set of tools to generate donations of up to $1.5 million a year to ensure high levels of air service.

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Cooper, JH AIR's manager, explained some of the features:

· "Partners" who participate—from as little as $1,400 per year to $200,000 per year—receive passes for recreation activities as well as discounts for employees on ski passes.

· Using its close ties with airlines, JH AIR recommends fare and flight schedule changes to the air carriers based on need. This eliminates unneeded flights during slack periods and thus reduces costs and the need for MRGs. Manipulating fares keeps Jackson competitive.

· JH AIR has a consultant that tracks flights, passenger volume, fares and costs for a weekly report to JH AIR members that provides real-time economic data that's useful in marketing.

Cooper emphasized that strong relations with airline management is essential.

Carol Waller, executive director of the Sun Valley-Ketchum Chamber & Visitors Bureau, said the MRG briefing was an educational exercise, but that a Wood River Valley operation as large and sophisticated as JH AIR would not be possible now.

The local Fly Sun Valley Alliance has an MRG fund to use with Horizon Air, one of only two carriers serving Friedman Memorial. Waller said the MRG is confidential and would not disclose its size or disbursements.




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