County rejects Allegiant’s terms to fly out of Paine Field
EVERETT - Plans for commercial flights are in question as the primary airline interested in flying out of Paine Field balked at Snohomish County’s financial terms for building a passenger terminal.
Las Vegas-based Allegiant Air insisted on building the terminal and being able to land for free. Part of the deal, which the county flatly rejected, would put Allegiant in charge of setting landing fees for other airlines.
Alaska Airlines, the other airline interested in flying out of Paine Field, had serious concerns with another airline being in charge of setting fees.
The disagreement jeopardizes plans for commercial flights in Snohomish County because Alaska could walk away if Allegiant goes. Alaska has long said it will only fly from Paine Field if another carrier agrees to first.
An Allegiant spokeswoman wouldn’t comment last week if the county’s rejection of its offer will cause the airline to walk away.
Peter Camp, Snohomish County’s point person on commercial flights at Paine Field, was stunned by Allegiant’s firm position. Camp delivered the news to the County Council on Monday, July 15.
“It’s perplexing why if I’m offering to build them a $4 million terminal that they’re insisting to do this,” Camp told the Tribune.
Allegiant spokeswoman Jessica Wheeler declined discussing why the carrier pitched the idea to county officials.
Camp, though, thinks Allegiant wanted to turn a profit by charging the county interest for building the terminal. The county can get lower interest rates through municipal bonds, Camp said.
Snohomish County has always said it will be in charge of building the terminal and recoup the cost from the airlines.
Letting any airline build and operate the terminal would give the county a myriad of potential legal risks, Camp wrote in a staff memo to the council.
If any other airline perceived any subtle discrimination in Allegiant’s practices, then the county, as the airport’s owner, would be liable. It would be impractical for the county to police that, Camp wrote.
The County Council last week unanimously agreed to “stay the course” on having the county build the terminal.
Allegiant’s disagreement was provoked by Snohomish County trying to nail down pre-agreements from Alaska and Allegiant before it builds the passenger terminal. The pre-agreements commit the airlines to paying the county interest on the terminal costs if they pull out of Paine Field soon after they start flying from there.
The pre-agreements are meant to minimize the county’s financial risk, Camp said, instead of building the terminal and then negotiating terminal and airport use agreements with the airlines.
“It’s not going to make sense for the county to spend $4 million if it’s not going to work for the airlines,” Camp said.
The county would be getting money back for the $4 million terminal over time through landing fees and business operations. Camp emphasized that the airlines don’t have to put any money down under these pre-agreements.
Allegiant didn’t want to commit to the pre-agreement. The airline argued that its offer minimizes any financial risk to the county because if it left Paine Field early, then the county would inherit the terminal.
Alaska was deeply concerned with any airline building the terminal because of possible anti-competitive practices, Camp said.
Camp doesn’t know if commercial flight at Paine Field is now dead.
“It’s not up to me to say; it’s up to the airlines,” Camp said.
The flap doesn’t worry Everett Mayor Ray Stephanson, a longtime proponent of commercial air service at Paine Field. There will be other airlines interested if these two walk away, and he’d be ready with invitations, he said last week.
He believes it’s more likely that Allegiant will buckle to the county’s terms.
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