The price of landing air service from Cleveland Hopkins Airport to Europe has turned out to be far higher than local officials had initially indicated.
The Plain Dealer reported that a document on the website of the City of Cleveland contained details of the financial package offered to Aer Lingus to launch four-day-a-week service to Dublin starting next May.
City, county and state government agencies agreed to offer the Irish airline nearly $12 million in revenue guarantees for the service for up to three years.
Most of that money is coming from JobsOhio, a private economic development agency of the state that is funded by liquor sales.
The local contributions toward the service are $825,000 from the county, $600,000 from the city, $600,000 from the Greater Cleveland Partnership, $275,000 from Destination Cleveland and $100,000 from Team NEO. JobsOhio, is contributing $9.4 million.
The funding is not a direct subsidy to Aer Lingus but is funding being made available to get the service started.
It will be paid if the flight fails to meet certain monthly performance goals. It can also be used to pay for such things as marketing of the service.
The newspaper’s story said that providing revenue guarantees has become a standard practice among cities seeking expanded air service, in particular international air service.
“It’s almost a part of doing business,” Megan Ryerson, a professor of transportation at the University of Pennsylvania told The Plain Dealer. “It may not make or break a deal, but it can really facilitate one.”
The Aer Lingus service will be the first direct scheduled flights between Cleveland and Europe since service to Iceland ended in 2018.
Tags: Aer Lingus, airline service, airline service in Northeast Ohio, airlines in Northeast Ohio, Cleveland Hopkins Airport, JobsOhio
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