Subsidy Game at Mesa Gateway Leaves Allegiant Stranded on the Tarmac

Normally when the government hands out special deals and subsidies to businesses, part of the difficulty in defeating these proposals is that it is far easier (and politically rewarding) to showcase the winners than it is to identify the losers. Not this time.

Last week, Phoenix-Mesa Gateway Airport’s board of directors announced that they wanted to get into the route-making business. Believing that the airport needed to add flights to San Diego and Salt Lake City, the board has offered an package of special incentives (no terminal fees for 6 months and funding for an extensive marketing campaign) in exchange for creating these routes.  The airport even offered to pay $7,000 for every flight the airline couldn’t fill, essentially guaranteeing the profitability of these routes.

Allegiant Air, which has flown over 3 million passengers out of Gateway in the last 8 years, didn’t want to add a route just 50 miles from their popular Provo/Orem destination in Utah and refused the offer.  Their competitor, Elite Airways, which has only seven planes at the airport and is struggling to compete with Allegiant, gladly accepted the money.

As a result, Allegiant Air, which almost single-handedly kept Gateway afloat during the Gaylord Hotel debacle and other growing pains, is now in discussions with Sky Harbor to move and take their 243 employees with them.  Sky Harbor may have more competition, they reason, but at least that competition isn’t subsidized.

So in order to get two new routes that were not in demand (presumably because no passengers wanted it), Phoenix Mesa Gateway’s board of directors is willing to let their primary carrier and top employer walk out the door.

If you live in the Mesa or Queen Creek area, the next Board of Director’s meeting isn’t until July 21st, so there is still time to make your voice heard and save Phoenix Mesa Gateway from itself.  In the meantime, if you’re thinking of taking a vacation you can still book a flight with Allegiant, or you can do what most people do when traveling from Phoenix to San Diego:

Drive.