The Kenai Peninsula Borough and local city councils have come out in support of an effort to establish a direct flight route between Kenai and Seattle.
The City of Kenai last month applied for a grant that would provide financial incentives for an air carriers to establish the route — which would connect the Kenai Municipal Airport and the Seattle-Tacoma International Airport.
A joint resolution in support of Kenai’s efforts was passed in July by the borough assembly and the city councils of Kenai, Soldotna, Seward, Homer, Seldovia and Kachemak. It reads that the communities of the Kenai Peninsula support Kenai’s proposal for the Small Community Air Service Development Grant and the effort to establish scheduled air service between Kenai and Seattle.
If acquired, Kenai City Manager Terry Eubank said Tuesday, the grant could have two uses. The city could use the funds to advertise and promote the service, but more importantly it could offer a revenue guarantee to an airline to convince them to add the service between Kenai and Seattle.
The revenue guarantee is an incentive that takes the risk out of establishing a service, Eubank said. That’s important at a time when airlines are facing pilot shortages and other challenges. Those funds would be paid to an airline if the service were unsuccessful and unprofitable.
But, if the market is strong enough and the revenue is there, the city doesn’t pay those guarantees to the airline.
“This is about mitigating their risk, to incentivize them to try to develop a market here,” Eubank said. “I think the market data says there is a market here, but you still have to prove it out.”
Kenai’s pursuit of the grant follows a study of the Kenai Municipal Airport conducted by Volaire Aviation. They were hired by the city as they looked to expand service to the airport, especially following the departure of Ravn Alaska last year — which “highlighted the need.”
The results of the study, Volaire Managing Partner Jack Penning said during the Kenai City Council’s June 19 meeting, leads his firm to believe that “service to Seattle can coexist with our current service, or even enhanced service to Anchorage.” Existing high prices are leading countless people to instead drive between the Kenai Peninsula and Anchorage, and those travelers could be recaptured.
“The market generates almost 500 passengers per day in each direction,” he said. “We don’t even have that many seats out there today. We’re talking about seats that are going to be filled by people who are primarily driving to Anchorage.
The benefits, Kenai Peninsula Borough Mayor Peter Micciche said in a July 9 assembly meeting where the joint resolution was considered, are “undeniable.” He said that the Kenai Municipal Airport has the facilities to support the service, and that establishing a line will benefit economic development.
“I want to make it clear that we support the businesses that are already providing commuter services, but the bottom line is, our development is somewhat stifled with a lack of jet service to Kenai,” Micciche said. “Those commuter services would likely find the business environment more lucrative if (Kenai) became somewhat of a rural hub for jet service.”
During the discussion, assembly member Bill Elam asked to be added as a cosponsor to the joint resolution in support of the grant application. Then every other member of the assembly joined him.
“Does anyone not want to be on it?” Assembly Vice President Tyson Cox asked.
At that time, Kenai’s City Council had already adopted the resolution unanimously on July 3.
On July 10, Soldotna’s city council approved the resolution on their consent agenda.
Council member Jordan Chilson said that the entire Kenai Peninsula stood to benefit from adding the service. He said that he was excited and supportive, asking what more Soldotna could do to help with the effort.
Kachemak’s City Council adopted the resolution that same day, on a 5-1 vote with only member Guy Rosi dissenting.
On July 22, the Homer and Seward city councils approved the resolution via consent agenda.
Kenai Municipal Airport Manager Derek Ables told the Seward council during their meeting that the funds for the grant come from the Federal Aviation Administration’s Airport & Airway Trust Fund, derived from aviation taxes, not federal income tax.
“This money is going to go to various airports one way or another,” he said.
That same day, Seldovia City Council unanimously approved the resolution.
Member Vivian Rojas said that the proposed route would be “a fantastic addition to the Kenai Peninsula and to Seldovia.”
“I’m in full support of it.”
That broad and enthusiastic support, Eubank said Tuesday, shows that the effort to add the service is bigger than just Kenai.
“If we’re able to secure direct air service from Kenai to the Lower 48, you’re talking about saving anybody on the peninsula who’s traveling a lot of time — hopefully some money,” he said. “Getting that borough support, then all the municipalities. I don’t take it for granted. I think it was a great show of support.”
Eubank said that the city thinks the service will expand economic opportunity across the peninsula by making the peninsula easier to get to.
The study that led to the grant effort, Eubank said, couldn’t account for travelers from Homer, Seward and Seldovia. That’s because Volaire recommended focus on a smaller geographic footprint to “keep things in perspective.” But south peninsula residents, too, are traveling long hours to get to Anchorage just to fly Outside.
Eubank said that if the service is established, the Transportation Security Administration would “absolutely” be required to have a presence in the airport. But, just like in the Ted Stevens Anchorage International Airport, passengers flying between Kenai and Anchorage or on other existing services would not be required to go through screening.
“It’s not going to change the way Grant or Kenai Aviation is doing business.”
If the city wins the grant funding, they’ll be able to take their proposal to airlines. Eubank said they’ll have to convince an airline that a Kenai to Seattle route is worth their resources — perhaps specifically pilots. If an airline can’t be found to partner with the city within a five-year period, the grant funds will be returned.
If unsuccessful, Eubank said the city will “regroup.” The city council must decide whether to continue the effort.
“I think the business case is strong.”
Full recordings of Kenai City Council meetings, including the Volaire presentation on June 19, can be found at “City of Kenai – Public Meetings” on YouTube.
Reach reporter Jake Dye at jacob.dye@peninsulaclarion.com.
