AIR SERVICE INCENTIVE PROGRAM
The Huntsville-Madison County Airport Authority (“HMCAA”) has adopted an Air Service Incentive Program. The goal of this program is to increase non-stop scheduled air service and passenger traffic at Huntsville International Airport (“HSV”) and to sustain this service over the long-term.
This program shall be in effect from May 1, 2024 through June 30, 2025. During that time period, the total amount of incentives for passenger service under this program shall not exceed $2 million, and the total amount of incentives for cargo service shall not exceed $500,000.
Carriers interested in the incentives offered under this program should contact Barbie Peek, Chief Business Development Officer, at barbie@hsvairport.org.
INCENTIVES OFFERED
The term “fees” in this program refers to fees charged by HMCAA and does not include any fees charged by other third-party operators at HSV, such as a fixed base operator. The term “per-passenger fees” refers to loading bridge fees, landing fees, public safety fees, terminal fees, and fuel farm fees charged by HMCAA. The term “all fees” includes per-passenger fees and any other fees charged by HMCAA, including fees for exclusive, preferential, and joint use space in the terminal building. Charter operations are not eligible for any incentives under this program.
New Destination Incentives
If a carrier initiates non-stop, year-round service to a new airport destination, HMCAA will provide marketing support for the new service and waive per-passenger fees directly associated with the new service for a period of 24 months. A new airport destination is one that is not currently served. The 24-month period will start on the date of the first flight departing from HSV to the new airport destination.
Additionally, if a carrier initiates non-stop, seasonal service to a new airport destination, HMCAA will provide marketing support for the new service and waive per-passenger fees directly associated with the new service for a period of 3 seasons or 3 consecutive calendar years. Service is considered “seasonal” if it is operated less than 7 months per calendar year. The 3-season/year period will start on the date of the first flight departing from HSV to the new airport destination.
With respect to service to new airport destinations (whether year-round or seasonal), the first carrier to establish service to the new airport destination will be the first carrier to publicly announce the new service or execute an Air Service Incentive Agreement with HMCAA, whichever is earlier. Once service has been established to a new airport destination, other carriers will not be eligible for a new destination incentive for initiating service to that airport destination, but they may be eligible for an increased frequency incentive (see below).
An airport destination that is served seasonally is not considered to be “currently served” during the off-season. Accordingly, if a carrier initiates non-stop, year-round service to an airport destination during the off-season that is only being served seasonally, HMCAA will provide marketing support for the new service and waive per-passenger fees directly associated with the new service, for a period of 24 months.
New Entrant Incentives
HMCAA will waive all fees and provide marketing support for new entrant carriers for a period of 12 months. The 12-month period will start on the date of the first flight departing from HSV. A carrier is considered a “new entrant carrier” if the carrier starts year-round or seasonal service at HSV but has not served HSV on a scheduled basis for the previous 24 months.
Increased Frequency Incentives
If a carrier increases the frequency of flights to any airport destination, and HMCAA determines that the increased frequency results in a significant net increase in seat capacity to that airport destination, HMCAA will provide marketing support for the additional flights and waive per-passenger fees directly associated with the additional flights, for a period of 12 months. Whether the net increase in seat capacity is considered “significant” will depend on several factors, including but not limited to the percentage increase, the level of service already provided to that specific destination, and community demand for the service. Generally, a net increase in seat capacity of 50% to the destination, or an additional flight on a day not currently served where existing service to the destination is less than 5 days per week, will be considered “significant.”
Air Cargo Incentives
The incentives described above are available to air cargo carriers as well as passenger carriers, but the fees waived are limited to landing fees and ramp fees. With respect to increased frequency incentives, HMCAA will incentivize increased frequency if there is a significant increase to landing weights.
PROGRAM ELIGIBILITY CRITERIA
To be eligible for incentives under this program, carriers must meet the following criteria:
- Carriers must provide new service that meets the criteria for the incentive as described above.
- Carriers must be in material compliance with HMCAA’s “Statement of Policy Regarding Airline Use and Occupancy of Airport Facilities and Periodic Adjustment of Airline Rentals, Fees, and Charges at Huntsville International Airport,” and any other agreements between the carrier and HMCAA.
- Carriers must be current in their payment obligations to HMCAA.
- Carriers must execute an Air Service Incentive Agreement that is satisfactory to HMCAA.
MARKETING SUPPORT
The amount of marketing support provided will depend on several factors, which may include the airport destination served, the number of new flights, community demand for the new service, and the amount of funds the carrier is willing to commit toward marketing the new service. The marketing program will be designed and managed by HMCAA’s marketing staff in collaboration with the carrier’s marketing staff. Typically, HMCAA will pay marketing incentive funds directly to the marketing provider. HMCAA will only pay marketing incentive funds to a carrier after the carrier has paid the marketing provider and submitted an invoice to HMCAA for incentive-related marketing with supporting documentation. All marketing funded under this program must promote the use of HSV. HMCAA reserves the right to require carriers to reimburse HMCAA for marketing incentives if the carrier does not provide the level of service required by the Air Service Incentive Agreement.
MONTHLY REPORTING
Carriers receiving new destination incentives (seasonal or year-round) and/or increased frequency incentives will be required to report the following information as part of the monthly activity report required by the Statement of Policy, separately for each new flight: enplaned and deplaned passenger numbers, landing weights, and fuel usage. HMCAA will use this information to determine the amount of fees that are “directly associated” with the new flights such that they should be waived in accordance with this program.
TERMINATION OF PROGRAM
HMCAA reserves the right to terminate this program at any time and for any reason, at its sole discretion, by posting notice of such termination on its website, and the termination shall be effective as of the date it is posted. Specifically, but without limitation, HMCAA reserves the right to terminate this program if the $2 million budgeted for the program is expended prior to June 30, 2025. Termination of this program will not terminate any fee waivers or marketing support to be provided pursuant to an Air Service Incentive Agreement between HMCAA and a carrier that is effective prior to the termination date, except as provided in the “Compliance” section, below.
COMPLIANCE
HMCAA and carriers participating in this program shall comply fully with all applicable laws, rules, and regulations with respect to this program. If HMCAA, FAA, or any other authority competent jurisdiction determines that this program is not in compliance with applicable law or HMCAA’s bond covenants, HMCAA reserves the right to suspend, modify, or terminate the program and any incentives owed under existing Air Service Incentive Agreements without further liability or obligation to any carrier. Carriers agree to reimburse HMCAA for any incentives provided if it is determined that the incentives were provided in violation of any applicable law, rule, or regulation by any authority of competent jurisdiction, including the FAA.
RESERVATION OF RIGHTS
HMCAA reserves the right to modify, amend, or substitute this program during the term of the program, provided that any modification, amendments, or substitution will not impact any existing Air Service Incentive Agreements.