TO: Mayor and City Council
THROUGH: Krishna Namburi, City Manager
FROM: Brian D. Martin, PE, Public Works Director
SUBJECT:
title
Small Community Air Service Development (SCASD) Grant Application for Commercial Air Service Recruitment.
Ward(s): Ward 2
Councilor(s): Nishioka
Neighborhood(s): Southeast Mill Creek Neighborhood Association (SEMCA), Southeast Salem Neighborhood Association (SESNA)
Result Area(s): Safe, Reliable, and Efficient Infrastructure; Strong and Diverse Economy.
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SUMMARY:
summary
The Salem-Willamette Valley Airport is seeking to apply for a grant through the U.S. Department of Transportation’s Small Community Air Service Development Program. If awarded, this grant would provide funds for an Air Carrier Incentive Program in the form of a Minimum Revenue Guarantee (MRG) at the Salem-Willamette Valley Airport.
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ISSUE:
Shall City Council authorize the City Manager to apply for, and if awarded, accept a federal grant through the Small Community Air Service Development Program?
RECOMMENDATION:
recommendation
Authorize the City Manager to apply for, and if awarded, accept a federal grant through the Small Community Air Service Development Program.
body
FACTS AND FINDINGS:
The U.S. Department of Transportation's SCASD program provides financial assistance to small communities on a competitive basis to help them enhance or establish air carrier service. If awarded, this grant would help recruit an air carrier to reestablish commercial air service following the suspension of commercial air service at the Airport in 2025. The application submittal deadline is May 4, 2026.
The airport is seeking $950,000 in SCASD funding to supplement the current local Minimum Revenue Guarantee (MRG) funding pledge of $500,000 per year over a three-year period. The local funding was pledged by local business partners, Travel Salem, Marion County, and the City of Salem. If awarded, the SCASD grant combined with funds already pledged would provide $1.45 million in the first year and $2.45 million in total over the three-year incentive program. The combined funding would better position Salem to attract a legacy airline by helping to offset the risks of starting new air service, particularly in the early years. MRG funds can be used to cover revenue shortfall on the newly established route(s).
Salem's application is well-positioned relative to the program's goals, which include demonstrated community support and willingness to use the service, improving travel options for families as an affordable alternative, reestablishing service after a loss, and support from airline industry partners.
BACKGROUND:
In 2023, Salem was awarded an $850,000 SCASD grant to help attract commercial air service. Combined with $350,000 in local contributions, the resulting $1.2 million MRG fund was used to recruit commercial air service, which began service in October 2023.
Commercial air service was provided out of Salem-Willamette Valley Airport until August 2025. $854,643 from the MRG fund was utilized over 22 months of service. The remaining balance was split between a $244,656 return to the SCASD program and a $100,701 refund to the original community contributors.
Aaron Ison
Airport Manager, AIC
Attachments:
1. US Dept of Transportation Small Community Air Service Development Program Grant Application