New strategy for air service: Financial guarantees

The group that’s focused on improving air service to Reno is taking a new-fangled approach: It’s providing a financial guarantee to airlines.

The newly reinvented Regional Air Service Committee has a war chest of $1.2 million, and promises that it can tap its partners for even more to close the financial gap if airlines don’t meet their projections when they bring new service to Reno-Tahoe International Airport.

“The world has changed. We need to do what needs to be done,” says Christopher Baum, who’s serving as chair of the Regional Air Service Committee.

Baum also is president and chief executive of the Reno-Sparks Convention & Visitors Authority, one of the organizations with a long history of working to build air service to the region through a group that was known as the Reno-Tahoe Regional Marketing Committee.

The old organization was funded primarily by the tourism industry — convention authorities, casinos, ski areas — but the new group also is targeting other businesses with a stake in good air service.

Talking with major employers in recent months, the Air Service Committee learned that direct flights to Washington, D.C., and New York City are a priority for the non-tourism sector.

While those are important markets for business travelers, they are equally critical for the tourism sector as well — particularly for efforts to draw conventions to the region.

“Every market segment needs service to the District of Columbia and New York,” Baum says.

Now that Reno ranks only 17th among the nation’s gaming meccas, convention business is growing in importance to the region’s hospitality businesses.

And for the many professional associations in the nation’s capital and the many convention-goers who travel from New York City, direct flights to Reno are a must-have, Baum says.

The reinvented Air Service Committee has set three levels of membership — $10,000, $20,000 and $50,000 — depending on the member’s number of employees or guest-rooms.

Baum described the wider membership structure as a way for businesses with a vested interest in good air service to step up their commitment.

In its previous incarnation as the Reno-Tahoe Regional Marketing Committee, the group focused largely on marketing the attractions of the Reno-Tahoe area to potential airline customers in key markets.

The thinking has been that more awareness of the region would lead to more buyers of airline tickets. And that, in turn, was expected to generate more flights to the region.

But the seats available on flights departing from the airport each day — 6,920, on average, in 2013 — is down by more than 36 percent from 2005.

Marily Mora, the president and chief executive of the Reno-Tahoe Airport Authority, notes that 400 airports now are jostling for better air service, making their pitch to airlines that have a fixed number of aircraft that they want to put onto the most profitable routes.

In that competition, the Air Service Committee figures that cash speaks.

Already, its members are working with airlines that are considering new service to Reno, but want guarantees that they won’t lose money if their projections fall short.

“We have people pledged to do whatever it takes,” Baum says, noting that the $1.2 million currently available for air-service subsidies is only a start.

Current members of the Regional Air Service Committee are largely rooted in the tourism sector.

Along with the airport and RSCVA, they include the Nevada Commission on Tourism, Incline Village/Crystal Bay Visitors Bureau, Lake Tahoe Visitors Authority, Eldorado Resort Casino, Silver Legacy Resort Casino, Circus Circus Reno, Atlantis Resort Spa Casino, Grand Sierra Resort, Peppermill Resort Spa Casino, Ski Lake Tahoe, Tahoe Douglas Visitors Authority, North Lake Tahoe Resort Association and the Virginia City Tourism Commission.