June 14, 2024

Palm Springs International Airport Approves New Air Service Incentive Program to Boost Connectivity and Economic Growth

By Bob Marra

The City Council of Palm Springs has approved a comprehensive new Air Service Incentive Program for Palm Springs International Airport (PSP), designed to attract new airlines and expand existing routes. This initiative, approved during the council meeting on June 13, responds to rising competition and the need to enhance the airport’s domestic and international connectivity.

Background and Need for the Program
The Greater Palm Springs region has long relied on its tourism economy, which is heavily dependent on robust air service to the Palm Springs International Airport. In recent years, however, maintaining and expanding air service has become increasingly challenging due to rising operational costs and competition from other regional airports. The Federal Aviation Administration (FAA) revised its Air Carrier Incentive Program guidelines in December 2023, allowing airports to offer additional types of incentives over longer periods, prompting PSP to revamp its approach.

Scott C. Stiles, City Manager, emphasized the necessity of this program: “The new incentive program is crucial for maintaining Palm Springs’ position as a premier destination. It aims to attract new air services and support the long-term success of our airport, which is vital for our local economy”.
Key Features of the 2024 Air Service Incentive Program

The 2024 Air Service Incentive Program ushers in a host of improvements over its 2022 predecessor. It offers six tiers of incentives, each tailored to the frequency, type, and seasonality of service. These incentives encompass marketing funds, fee waivers for landing fees, terminal fees, and gate waivers, all designed to attract and retain airlines.

Notable Incentives:
1. Daily Service: For target airports such as Atlanta, Chicago, and New York, airlines can receive up to $75,000 in marketing funds, 100% landing fee waivers for 24 months, and 100% gate waivers for 24 months.
2. Seasonal to Year-Round Conversion: Airlines converting seasonal routes to year-round service can receive up to $75,000 in marketing funds and extended fee waivers.
3. Intercontinental Service: To attract international flights, the program offers up to $200,000 in marketing funds and extensive fee waivers for airlines establishing routes to cities like London, Paris, and Tokyo.

Financial Impact and Implementation
The program retains the budget caps from the previous program: $250,000 for marketing and $1,000,000 for fee waivers per fiscal year. These caps can be adjusted based in the city’s budget planning process. The program is set to replace the 2019 program starting July 1, 2024, and will run until June 30, 2027, unless extended, suspended, or canceled by the City Council.

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