City to Pay Horizon $150 Grand U.S.

Monday, September 29, 2008 07:45 PM

Prince George, B.C.- The City will be writing a cheque to Initiatives Prince George to cover some of the losses suffered by Horizon Air.

The City had given a guarantee of up to $400 thousand dollars of losses after the first year.

The flight between Prince George and Seattle didn't last that long, in fact, it was announced the flight was to be cancelled just four months into the agreement. High fuel prices were cited as one reason why the flight was not popular and was operating at a less than profitable passenger load.

That $150 thousand US, translates to $155,894 Canadian dollars.

The last Horizon Air flight from Prince George is October 5th.

Councillor Don Zurowski says "We tried it, it didn't provide the kind of benefit we were looking for,but it was not without value, but clearly, at the five month mark because of rising fuel costs, Initiatives prince George and Horizon air decided to cut the service and the losses. I think this was a prudent business decision by Initiatives Prince George on behalf of Council. The rising fuel costs were detrimental, but we tried."

Councillor Debora Munoz says the flight looked promising when it was first presented, but says she will now "take a highly cautionary approach on high risk private business".

Councillor Murry Krause said "You never make mistakes if you don't try anything, We were trying to diversify our economy, we did the right thing at the time and we're doing the right thing now".

Mayor Kinsley says he is very disappointed because of the loss of connectivity. "Horizon wanted to have a guarantee of $750 thousand to continue, but we had to stop the bleeding. I want to thank my Council colleagues for the courage to try soemthing new. We relied on the consultant, and the fuel costs tore eveything apart. Its unfortunate to lose it but I know something that has guided me is, 'men who try to do soemthing and fail are more successful than those who try nothing and succeed'."

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Posted on Monday, September 29, 2008 07:45 PM in News by 250 News

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Comments

Posted by: MrPG on September 29 2008 8:14 PM

There's a lot of blame being placed on fuel costs, but did the people who put this proposal together think fuel costs would remain stable over time?

Fuel always goes up, and if your business model can't account for that, then it's just poor planning IMHO.

I guess it's easier to save face when you blame something out of everyone's control.

Posted by: YamaDooPolCat on September 29 2008 8:44 PM

"...Councillor Debora Munoz says she will now "take a highly cautionary approach on high risk private business"..."

Local investors and business ideas like the Airport ALR area never got a warm welcome from Deb before, so now things are going to get worse?

Don't look for support from Deb if you need council approval for your next investment in PG.

Posted by: woodwoman on September 29 2008 9:03 PM

i wonder if the City will give me $150K so I can try a new business venture and if it does not panned out - probably due to high heating fuel cost this winter - I can just walk away!!

Posted by: Wolfie on September 29 2008 11:13 PM

Does your venture have the ability to bring 50+ tourists a day to the city from another country? If so, they probably would.

And to Mr. PG... yes fuel always goes up, but I think we can all agree that the past year was extraordinary in terms of the size of the increases.

Posted by: Wolfie on September 30 2008 7:06 AM

Posted by: MrPG on September 30 2008 8:11 AM

Well, I would say that Air Canada and Westjet were able to manage the escalating fuel costs without having to shut down their operations.

I think there should be less focus on fuel cost and more focus on empty planes. When I read this story, I just see a bunch of people trying to save face. "It's not our fault, it's those darn gas prices!"

There's no way the city should be using tax dollars to subsidize private business.

Posted by: diplomat on September 30 2008 9:01 AM

"Councillor Murry Krause said "You never make mistakes if you don't try anything, We were trying to diversify our economy, we did the right thing at the time and we're doing the right thing now"."

Although I dearly would have liked that money to go towards repairing some stretch of lumpy cratered residential street I must agree with Mr. Krause.

Nothing ventured, nothing gained.

Posted by: justsayno on September 30 2008 9:24 AM

I must agree with MrPG - in any business venture you have a plan. Throwing in the towel after just 4 months shows that the planning was not done very well. For the City to say they would pay if it didn't work out, well what business wouldn't go for a deal like that??? That is like having a guaranteed return on your stocks when the markets are crashing.

I'm all for expanding and changing our city, but couldn't we be smarter about it?

Posted by: Rounder on September 30 2008 9:44 AM

The same week Horizon pulled the plug in PG, Alaska/Horizon cut a lot of jobs down south.

"Alaska Airlines said Friday it will cut flights by 8 percent this winter and slash up to 1,000 jobs, as high fuel costs and a weak economy provide a �one-two punch� to the carrier�s bottom line."

"Its much smaller sister airline, Horizon Air, also is reducing flights and staff. Horizon already has eliminated some regional flights and expects to shrink its capacity by about 20 percent in the fourth quarter compared to the same period last year, according to The Seattle Times. Some managers and pilots already have lost their jobs; about 40 pilots will be furloughed in November."

Posted by: MrPG on September 30 2008 9:48 AM

I wonder how many other communities had to pay Horizon out of the tax base in the same manner we did?

Posted by: metalman on September 30 2008 12:09 PM

Mr PG, I doubt that the managers of any other city would have the "wisdom"? to promise a subsidy to any private business if their ambitions did not turn out as was planned or hoped. In my opinion, this whole fiasco was ill conceived from the start. A wonderful plan though, to be able to connect through Seattle directly from ol' PG, but I think it was doomed to fail.
20/20 hindsight on my part I supose.
metalman.

Posted by: lostfaith on September 30 2008 5:08 PM

Posted by: lostfaith on September 30 2008 5:10 PM

Councillor Debora Munoz says the flight looked promising when it was first presented, but says she will now "take a highly cautionary approach on high risk private business".
--------------------------------------------------------------------------------------
Why start now Debra, you didn't care before? What could possibly be the reason for this statement?

Hmmmm, oh election time.

Posted by: lostfaith on September 30 2008 5:12 PM

Councillor Murry Krause said "You never make mistakes if you don't try anything, We were trying to diversify our economy, we did the right thing at the time and we're doing the right thing now".
--------------------------------------------------------------------------------------
"Try" doesn't cut the mustard buddy.

Posted by: lostfaith on September 30 2008 5:13 PM

Posted by: lostfaith on September 30 2008 5:15 PM

This whole Horizon fiasco was put together for the people that wanted connecting flights to their holiday destinations and for no other reason.

Posted by: Harbinger on September 30 2008 5:19 PM

Try? I hope city council bought US dollars when they were at par. US dollars? Bunch of ninnies. Maybe we should be thankful they weren't Euros.I will remember this in Nov.