Commercial air service at Salem’s airport brought millions to the region and is poised to continue growing, according to a consultant’s report to the Salem City Council.  Commercial air service began at the Salem – Willamette Valley Airport in October 2023 with Avelo Airlines flights to Las Vegas, Nevada and Burbank, California, and more flights are expected as the airport works to attract new carriers.  Jack Penning, an air service development consultant for the city and the founder and owner of Indiana-based Volaire Aviation Consulting, told city councilors Monday that Salem’s airport is averaging roughly 117 passengers per flight with an average of 74 new visitors to the area per day. He said in July alone about 3,300 new visitors came to the area. The increased traffic has brought about $19 million into Marion County’s economy since air service began, Penning said.  “That is the real payoff. This is money that is going to restaurants, it’s going to shopping, it’s going to all the things people do when they come to Oregon,” Penning said “It’s going to wineries, it’s going to hotels. We are up to where we are almost $3 million a month in impact from this service. Three million new dollars in our economy every single month.”  While the consultant’s data is able to pinpoint the economic impacts to Marion County, it is difficult to ascertain how much is being spent in Salem in particular, Penning said. But the service is requiring more city spending. Annual airport operating expenses have increased to $664,000, primarily from salaries and wages. Once commercial operations began, the city had to hire new full-time firefighters in order to have someone on-duty at all times, a full-time police officer for airport security, and five airport positions in program management and maintenance. Salem City Council commits $2 million to airport terminal improvements, staffing Revenue, meantime, was about $183,000 over the first year of operations. That’s less than anticipated, in part because parking revenue was lower, Public Works Director Brian Martin said. The result is that the airport — which previously generated enough income to cover its operating costs — now requires money from the city’s general fund to meet its costs. That comes as the city is facing an expected nearly $18 million budget deficit next year. Penning said the airport is diligently focused on closing the gap between expenses and revenues, and is optimistic the airport will eventually start making money once it can more effectively tap into the local market.  “We remain confident that the growth of commercial air service will eventually get us to revenue neutral and even to net positive over the years. Any new flights generate incremental revenue without incremental expense to go with it,” he said. Jack Penning, an air service development consultant and founder and owner of Indiana-based Volaire Aviation Consulting told city councilors Monday that Salem’s airport is averaging roughly 117 passengers per flight with an average of 74 new visitors to the area per day. (Joe Siess/Salem Reporter) Airport manager John Paskell told Salem Reporter that the role of airport officials at this time is to prepare the airport for an expansion of commercial air service and to work towards getting the airport to the point where it will be sustainable without the use of money from the city’s general fund. He said air service is only one mechanism to reach that goal, and that the airport is working on new business partnerships and new developments on airport land such as the WattEV semi-truck charging facility on Southeast Airway Drive.  Paskell said in February the city council will be presented with an airport master plan. Salem’s airport can boast being the region’s most economical.   “We had a strategy for lower cost service to serve the entire Willamette Valley and it is working,” Penning said. “We have the lowest fare of any airport in the Pacific Northwest. This is the cheapest airport to fly in and out of in the entire Pacific Northwest.” Penning said the average cost per passenger for Salem flights is $63 each way.  The Avelo flights are currently subsidized via minimum revenue guarantees, a fund the airline can seek reimbursement from if it doesn’t meet its revenue targets. That money, a total of $1.2 million, is from a federal grant and private funds, and doesn’t come out of the city’s budget. So far, $445,000 was spent in the program’s first year with about $755,000 remaining for the next year of service. One year in, Avelo has received $446k from grant to subsidize Salem operations In October, an Avelo spokesperson told Salem Reporter that the airline expects to maintain operations and grow at Salem airport with or without future use of minimum revenue guarantees.  Penning said only 5% of passengers in Marion County are using Salem’s airport, but that can change as flights are added. The majority of people are driving to the Portland airport while smaller percentages are driving to airports in Eugene, Redmond and Seattle, Penning said.  “If you look at how many passengers are available, we still have 95% of people driving to other airports,” Penning said. “We are scratching the surface of the potential of this market. That’s another reason we are going to grow over time.”  Penning said the airport’s next flights ought to be to major hubs like Phoenix, Arizona and the Bay Area in California.  In July, Avelo cut flights to Santa Rosa, California only months after launching that service because of low demand. The last Santa Rosa flight was on Sept. 2, and in addition to the cuts, the airline extended service to Las Vegas and Burbank where demand remains robust. Penning said airport officials are already meeting with carriers to discuss bringing more flights to Salem, but he said things will take time.  “It was very very difficult, it took us almost a decade to get service into this airport. It is even harder to get the next carrier,” Penning said. “It doesn’t mean it is going to take a decade but it means we are going to have to work really hard in making sure we are competitive with other places where those airplanes can go.”  Contact reporter Joe Siess: [email protected] or 503-335-7790.A MOMENT MORE, PLEASE – If you found this story useful, consider subscribing to Salem Reporter if you don’t already. Work such as this, done by local professionals, depends on community support from subscribers. Please take a moment and sign up now – easy and secure: SUBSCRIBE. The post Salem’s first year of commercial air service brought $19 million to local economy, consultant says appeared first on Salem Reporter.