TO: Mayor and City Council
THROUGH: Krishna Namburi, Interim City Manager
FROM: Brian D. Martin, PE, Public Works Director
SUBJECT:
title
Cessation of Avelo Airline Flights at Salem-Willamette Valley Airport.
Ward: Ward 2
Councilor: Nishioka
Neighborhood(s): Southeast Mill Creek Neighborhood Association (SEMCA); Southeast Salem Neighborhood Association (SESNA)
Result Areas : Strong and Diverse Economy
end
SUMMARY:
summary
Avelo Airlines announced on July 14, 2025, that it will cease operating commercial passenger flights out of Salem-Willamette Valley Airport on August 10, 2025. The cessation of flights out of Salem is part of a larger corporate realignment that shifts Avelo’s western-based aircraft and resources to its east coast operations and discontinues air service at 10 western airports by the end of December 2025. Avelo Airlines is currently the only airline operating out of Salem-Willamette Valley Airport. Staff is determining the adjustments needed to airport operations to account for the lost revenue and still maintain the airport ready for potential resumption of commercial air service by another airline or airlines.
end
ISSUE:
Information only.
RECOMMENDATION:
recommendation
Information only.
body
FACTS AND FINDINGS:
Withdraw of Avelo Airlines from the Western United States
Avelo Airlines announced on July 14, 2025, that it will cease operating commercial passenger flights out of Salem-Willamette Valley Airport on August 10, 2025. The cessation of flights out of Salem is part of a larger corporate realignment that shifts Avelo’s western-based aircraft and resources to its east-coast operations. This move discontinues Avelo air service at ten U.S. airports including:
Hollywood/Burbank, CA (BUR) Las Vegas, NV (LAS)
Redmond/Bend (RDM) Pasco/Tri-Cities, WA (PSC)
Eureka/Arcata/Humbolt County, CA (ACV) Eugene, OR (EUG)
Sonoma County/Santa Rosa, CA (STS) Kalispell, MT (FCA)
Salem-Willamette Valley (SLE) Medford, OR (MFR)
Flights will discontinue at different cities throughout the summer and fall until Burbank ceases operations in December 2025.
Avelo’s Minimum Revenue Guarantee
As of June 30, 2025, 71 percent of the $1.2 million existing MRG Fund had been paid to Avelo Airlines. Any remaining federal MRG grant funds at the end of the contract period in October 2025 will remain with the federal government and the remaining local match component will be returned to the individual donors or they can elect to direct their prorated refund amounts towards a new MRG for a new airline.
Avelo’s Air Carrier Operating Agreement
The terms of the agreement allow Avelo to terminate the agreement and all of its future obligations at any time if Avelo terminates its operations at the airport and bases no employees at the airport. There is no penalty to Avelo for terminating the Agreement for this reason.
Financial Impact
It is estimated that the Airport Fund will receive approximately $238,000 less revenue for the remainder of FY26 due to the cessation of commercial air service, assuming no new airline begins service this fiscal year. That revenue amount includes foregone parking fees, fuel flowage fees, ground equipment rental, and airline landing fees that would have begun in October 2025.
Status of Airport Operations
Providing commercial air service at the airport in the future requires that security certifications be maintained at its current federalized (Part 139) status. Terminal, runway, and taxiway facilities, along with ground equipment, must be maintained at a high standard of quality and readiness. This requires that a higher level of staffing at the airport be maintained than what existed prior to commercial air service operations. The Transportation Security Administration’s (TSA) passenger and baggage screening equipment will remain in place for at least the next several months.
Airport Management and Staffing
John Paskell, Airport Manager, submitted his resignation on July 16, 2025, to be effective August 1, 2025. Mr. Paskell has administered the airport for 14 years and has worked tirelessly to improve the physical and financial condition of the airport and has played a key role in the airport’s success as a leading general aviation airport in Oregon and has been a lead member of the team that brought commercial service back to Salem in 2023. Upon his departure, Aaron Ison, Airport Security Program Manager, will serve as the Acting-in-Capacity Airport Manager beginning August 2, 2025.
In addition, Joey Langenhorst, Airport Operations Program Manager, submitted his resignation on July 17, 2025, to be effective August 29, 2025. Mr. Langenhorst has served the Salem-Willamette Valley Airport for 13 years and has worked with tremendous dedication to keep the airport facilities maintained and certified to Federal Aviation Administration standards. We are planning on covering his duties by reassigning existing Operations staff.
Until a final decision is made on the future of commercial air service at the airport, we are recommending that no new staff be added to backfill the two vacancies. This will result in approximately $206,000 in salary savings over the next 6 months, which is the earliest we could expect to see a new airline. Projected savings through the end of FY26 would be approximately $340,000
Capital Improvement Projects at Salem-Willamette Valley Airport
The airport is in the process of moving forward with several federal and state-funded capital construction projects through the planning, design, and construction process. These projects include:
- Construction of Concrete Hardstand(s) and Security Fencing
- Resurfacing of Taxiway Alpha (North) - Design
- Airport Terminal Expansion Plan, Design, Partial Construction
All of these projects will continue to move forward as federal funds are available. The update to the Airport Master Plan and upcoming Airport Resiliency Study will also both continue to move forward.
Future Council Work Session
A City Council Work Session on the future of the Salem - Willamette Valley Airport is tentatively scheduled for Monday, August 18, 2025.
BACKGROUND:
The City of Salem signed a 10-year operating agreement with Avelo Airlines in September 2023. Avelo Airlines began commercial passenger service at Salem-Willamette Valley Airport on October 5, 2023, with twice-weekly flights to and from Burbank, California, and Las Vegas, Nevada. A third flight per week to and from Burbank was added during the Thanksgiving/Christmas holiday periods in both 2023 and 2024. Avelo briefly operated flights between Salem and Sonoma County/Santa Rosa, CA, from May 2024 to September 2024. Flights to and from Las Vegas were paused from January 2025 through April 2025, resuming in May 2025.
The City of Salem made a $1.9 million capital investment in 2023 to the Salem-Willamette Valley Airport terminal and campus to prepare it for commercial air service. An additional $540,000 of State grant funding was spent to acquire ground support equipment. Marion County contributed $50,000 in FY24 and $50,000 in FY25 towards terminal furnishings. The City’s General Fund will provide $696,210 in FY26 to sustain 4.5 FTE positions to support commercial air service. positions. An additional $1,015,390 was allocated to fund additional Fire and Police personnel for commercial air service. These public safety staff are rotated to other duties between commercial flights.
As an incentive to attract and sustain airline operations during its first two years of service at Salem, a Minimum revenue Guarantee (MRG) fund of $1.2 million was established using an $850,000 Federal grant and $350,000 in local community contributions. The MRG contract with Avelo expires in October 2025.
Mark Becktel, AICP
Assist. Public Works Director - Operations
Attachments:
1. None