Sound Off: Grant subsidizes losing effort

By Mike Lauver

On Feb. 5, the Oak Harbor City Council unanimously approved receiving a Federal Grant from the U.S. Department of Transportation. The News-Times reported on this action on Feb. 13 (“Kenmore Air tries to find profits on Whidbey Island”). The article and some of the information contained in it do not provide either a full or true characterization of the grant that the city will now be responsible for.

The grant requires limited marketing assistance provided by ‘in-kind’ contributions and other cash contributions outside the grant funds. The actual money from the grant, $180,000, is for free ground transportation from NAS Whidbey to Lupien Field.

I would like to clear up one misconception once and for all: Kenmore Air is not a competitor of Whidbey Seatac Shuttle. We serve two different markets, we do not expect to draw from their passenger base and we doubt very much that they have or will affect ours. We welcome air service, my professional life has been in aviation up until the advent of the shuttle service and I am an aviation booster. However, in business you either make it or you don’t: We have and they haven’t.

Mr. O’Neill, of Kenmore Air, reaffirmed to the council that they have been losing money in Oak Harbor since their arrival here. The grant is no more than a subsidy to a non-performing business at the expense of the taxpayer. My concern is over the veracity of the grant application and the subsidizing of a non-viable business, whether it’s an air service or a taco stand.

Here are the facts: Kenmore will not commit to remain in Oak Harbor for any period of time; their current agreement with the airport expires in May of this year; the airport has a foreclosure action pending against it; the airport is the subject of ongoing litigation; the city will expend up to $180,000 of your money on Kenmore’s behalf and then bill the USDOT for reimbursement; the city has not validated the very questionable information in the grant application; the grant writer, BWR, did not address any of the questions posed to it with fact or data.

Despite all of the questions, the council is so focused on being able to associate a nine-seat, single-engine ‘airline’ with Oak Harbor, it has accepted the responsibility for this grant.

City Administrator Paul Schmidt assured the council that if Kenmore left town (as they did after their seaplane misadventure here) the city would simply cancel the grant and would stop paying the vendor contracted to provide the $180,000 worth of ground services. Is this the way the city does business, contract with someone who will have high start-up costs and employees who will be counting on a job, and then terminate them with no regard for the economic consequences?

Mr. O’Neill claims they have had a ‘tough go’ of it over the past three years. Well that certainly is true, if you can’t attract passengers with $29 fares, it just isn’t going to happen. But then again if 22 months since start-up in May of 2006 is three years by Kenmore’s calculation, then anything is possible.

Maybe they’ll make up in volume that which they lose on individuals. Oh, and thanks, but I’ll pass on that $100 ticket like the rest of the travel market.

Mike Lauver is part owner Whidbey Seatac Shuttle, Oak Harbor.

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