CITY OF TALLAHASSEE
CITY COMMISSION AGENDA ITEM
ACTION REQUESTED ON: February 11, 2009
SUBJECT/TITLE: Delta Air Lines’ Service Proposal
TARGET ISSUE:

STATEMENT OF ISSUE
At the February 2, 2009 City Commission Retreat, the Mayor reported that he had concluded deliberations with Delta Air Lines for reinstatement of Intra-Florida service. Beginning April 1, 2009, Delta will begin serving Fort Lauderdale, Tampa and Orlando with 2 flights each Monday – Friday and one on Saturday/Sunday utilizing 32-seat SAAB turbo-props subject to a $1,500,000 Revenue Guarantee that is being shared by City ($375,000), County ($375,000) and State ($750,000).

Also, at the Retreat, the Mayor discussed an additional proposal from Delta to provide direct service to Washington’s Reagan National (DCA) utilizing 50-seat RJ for a $500,000 Revenue Guarantee. Delta is proposing one flight beginning May 1, 2009. The Mayor is currently working with the consortium partnership relative to the new proposal and conducting a risk assessment.

RECOMMENDED ACTION
Reaffirm the City’s commitment to Delta for intra-Florida and Washington, D.C. air service proposals.

FISCAL IMPACT
The City’s commitment to the revenue guarantee would be $375,000 for Intra-Florida service and $125,000 for Washington Reagan Service. The funding source, if needed, will be the funds set aside for Economic Development in the Capital Improvement Fund. We also plan to explore other options to include waivers of airline rates and charges that could be used to offset the revenue guarantee. This item has been reviewed by the Office of Budget and Policy and complies with City budget guidelines.

Kenneth M. Austin, Director of Aviation

Anita Favors Thompson, City Manager

For information, please contact: Philip F. Inglese at 891-7802.

SUPPLEMENTAL MATERIAL/ISSUE ANALYSIS
HISTORY/FACTS & ISSUES
Effective October 1, 2008, Delta Air Lines discontinued all Tallahassee intra-Florida service because of the high operating costs of Regional Jets (RJ). Because of the diminished service and its impact on the local economy and access to state government, the Mayor in concert with the Governor’s Office joined efforts to improve intra-Florida service.

At the December 10, 2008 City Commission Meeting, the Mayor briefed the Commission on a proposal from Delta Air Lines to reinstate intra-Florida service for which the Commission authorized the Mayor to pursue with the understanding that other partners would share the risk.

Since the December 10th meeting, the Mayor has organized a consortium partnership with the State of Florida and Leon County. The original proposal for reinstatement of intra-Florida air service called for 2 flights to Fort Lauderdale, and 3 flights each to Tampa and Orlando, in consideration for a $2,000,000 Revenue Guarantee. The consortium partnership share was to be split State ($1,000,000), County ($500,000) and the City ($500,000).

At the February 2, 2009 City Commission Retreat, the Mayor advised the City Commission that continued deliberations with Delta resulted in a reduction in the Revenue Guarantee from $2,000,000 to $1,500,000 in consideration for 2 flights each Monday – Friday and one on Saturday/Sunday to Fort Lauderdale, Tampa and Orlando with service starting April 1, 2009. The Commission concurred with moving forward with the understanding that the City and County share of the Guarantee would now be $375,000 each and the State $750,000. Since that meeting, the consortium partners have affirmed their commitment at the reduced level.

Also, at the Retreat, the Mayor discussed an additional proposal from Delta to provide direct service to Washington’s Reagan National (DCA) utilizing 50-seat RJ for a $500,000 Revenue Guarantee. Delta is proposing one flight beginning May 1, 2009. The Mayor is currently working with the consortium partnership relative to the new proposal and conducting a risk assessment.

CHARITABLE CONTRIBUTIONS
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OPTIONS
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ATTACHMENTS/REFERENCES
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