CHICO, Calif. - The airline industry has taken a massive hit due to the coronavirus pandemic. Limited flights and those that are in the sky are almost empty, due to stay-at-home orders and traveler restrictions.
Action News Now Morning Anchor Julia Yarbough looked into how what is happening on the national stage might impact plans for local growth.
One of the nation's largest airlines, Delta, just this week reported a $534 million loss for the first quarter.
The carrier anticipates the summer travel season plummeting 90% compared to this time last year. That economic crunch across the industry could now have a ripple effect on growth plans for Chico and ongoing efforts to return commercial air service to the region.
Yarbough spoke with Chico Public Works Director Erik Gustafson about coronavirus and the city's vision for growth in light of the pandemic.
“It’s a big concern for us as the coronavirus has caused demand for air travel to fall to zero,” says Gustafson. “Our hope is it recovers after this big downturn and pause; that in a couple of years we'll be back on track and hopefully attract commercial air service."
The federal government recently awarded Chico a $500,000 in a Small Commercial Air Service Development grant, known as SCASD.
The city has four years to use those funds, which will be part of a "revenue guarantee bank".
That is essentially a fund, in which money is set aside to assure a carrier choosing to establish air service in Chico will not lose money.
Even so, the coronavirus pandemic is adding another layer of uncertainty and new challenges to the process of securing an interested carrier.
“We've just sort of given airlines the space they need to figure out their business models and plans through this pandemic,” explains Gustafson. “But we hope to pick up conversations in the coming months when this is over.”
Gustafson says communication with potential carriers turned from discussing air service, to Chico offering airlines runway space to park any idled planes. Gustafson says to date, no airlines have taken the city up on that offer.
Regarding a timeline for possible air service? Gustafson says realistically it could be two or even three years before we might see a commercial deal.
As for the grant money, Gustafson says the city is able to request extensions on usage to move beyond the four-year deadline.