San Jose gives new airline room to fly

San Jose officials waived more than $1 million in fees for Spirit Airlines as the company takes off at San Jose Mineta International Airport.

The San Jose City Council voted unanimously Tuesday to grant the airline approximately $1.7 million in fee waivers and marketing dollars. Airport and city officials said the waivers will incentivize more airlines to come to San Jose, ultimately boosting the local economy.

Spirit Airlines made its debut at SJC in February, making San Jose the seventh California city to work with the popular airline. San Jose relies on business travel revenue, which saw a 51.8% drop last year. Bringing the airline on board was an attempt to increase the city’s leisure travel, which saw a 16% decline in 2022. Spirit is currently the only domestic low-cost carrier at SJC, airport officials said.

“San Jose Mineta International Airport’s support program is envisioned to help airlines offset high initial risks and costs,” airport spokesperson Keonnis Taylor told San José Spotlight. “(It’s) our way of being a good partner by helping a new airline be successful in serving our community.”

Taylor said fee waivers make up the majority of the $1.7 million. According to a city memo, waivers will total more than $1.5 million, and includes Spirit Airlines’ landing fees at the airport. An additional $175,000 will be used toward marketing, and advertising to help introduce new airlines is a common practice, she added.

Spirit is already selling tickets for flights to Dallas, Las Vegas and San Diego, which begin June 7. SJC is expected to pull in more than $5.6 million in revenue from the airline in the next 18 months, with net revenue estimated at $3.9 million, according to the memo. Major airports like Los Angeles International Airport and San Francisco International Airport have also attracted airlines with initial cost reductions, the memo states.

Councilmember David Cohen said revitalizing business travel lost during the COVID-19 pandemic is crucial. The local hospitality industry has already taken a hit, and one of downtown San Jose’s major hotels is looking to sell a portion of its rooms. While the city council has oversight on airport spending, SJC’s dollars for new airlines comes from the airport and not the city’s general fund, he added. Cohen is the council liaison to the city’s airport commission.

“Our airport really has been rated as one of the most convenient places to fly. It’s certainly the most convenient airport in the Bay Area,” Cohen told San José Spotlight. “One of the important things that companies and others who are holding conventions look for is convenient places to fly in and out, so we want to rebuild that convention business that’s been lost since COVID.”

Councilmember Dev Davis, whose district includes the airport, said generating more leisure travel means local businesses benefit and city tax revenue gets a boost.

San Jose tourism has yet to recover to pre-pandemic levels. The city’s tourism arm, Team San Jose, reported $34.2 million in revenue in 2021, after climbing back from zero dollars in revenue in 2020. Other efforts are in the works to attract travelers, including the 49ers bidding to bring the Super Bowl back to Levi’s Stadium in 2026.

“The more people we have flying into San Jose and staying in San Jose, they’re going to eat downtown. They’re going to shop at our stores, they’re going to pay sales tax, they’re going to keep people employed,” Davis told San José Spotlight. “That’s revenue that we are able to (use to) help provide services to our residents.”

Contact Loan-Anh Pham at [email protected] or follow @theLoanAnhLede on Twitter.