City council approved a $150,000 US pay out to Horizon Air on Monday, honouring a revenue-assurance agreement between Initiatives Prince George and the American airline.
Last year the city authorized Initiatives Prince George to offer up to (U.S.) $400,000 in a risk-sharing agreement with the carrier to bring direct flights to Seattle from Prince George.
Horizon Air launched the daily flight on May 1. In September, the airline announced it will cancel the service on Oct. 5.
Horizon Air vice-president of marketing and communication Dan Russo said an unprecedented 30 per cent increase in fuel prices and planes flying 70 per cent empty caused the cancellation.
“This city council, at the advice of a consultant and Initiatives Prince George, agreed to expose the taxpayer to this risk,” Coun. Don Zurowski said. “We tried it and there were a number of reasons it wasn’t as successful as we hoped.”
Zurowski said in hindsight the decision was a mistake, but council needs to take some risks to promote economic opportunities.
It was a prudent business decision for Horizon Air and Initiatives Prince George to cancel the agreement before the full year term was complete, he added.
“I believe Horizon will keep Prince George on the radar for future opportunities,” Zurowski added.
Coun. Brian Skakun said it was a difficult decision to support the initiative offer.
“We took a chance on this. In my opinion sitting in council chambers and doing nothing is not an option,” Skakun said. “(But) there comes a time when you have to cut your losses, and that’s what happened.”
The city and Initiatives Prince George will continue to work on attracting air carriers offering additional destinations, he added.
Coun. Debora Munoz said she would be hesitant to approve a similar agreement in future.
“I’ll be very cautious investing taxpayer money in risky private-business endeavors,” she said.
Mayor Colin Kinsley said it was better to have tried and failed than to have not tried at all.
“It’s unfortunate to lose it. (But) I want to congratulate my council colleagues for taking a risk.”