Province finalizes funding deal for YQR's direct flights to Minneapolis

FILE - The tail of a WestJet plane is seen in Calgary, Tuesday, May 3, 2016.THE CANADIAN PRESS/Jeff McIntosh

The provincial government recently finalized a funding agreement for Regina International Airport’s direct WestJet flights between Regina and Minneapolis.

According to an order-in-council document from June 12, the province would pay up to $1.5 million to WestJet over the next three years if the airline doesn’t meet its sales target over that period.

“Simply put, this is essentially a top up, almost like an insurance policy to ensure that if the flight does not meet with revenue targets set by WestJet, then we will be able to provide them additional subsidy to ensure those are met. If the flight stands on its own. Nothing is paid out,” James Bogusz, president and CEO of the Regina Airport Authority, explained.

The direct flight between YQR and WestJet began on April 28, but Bogusz said the airport has been after a U.S. service since 2018.

“The deal with WestJet specifically, this is well over three years of discussion, and just thrilled that WestJet offered this place,” he said.

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Bogusz explained that they use different forms of incentives regularly with airlines, including the minimum revenue guarantee that is in place with WestJet.

The incentives are meant to get the routes going, not continue into perpetuity.

“The intention is not to send the money over and over. The intention is get this route to be self fulfilling,” he said, noting that it takes about a year for a route to really get established. “The hope is then it stands on its own two legs. We have no interest in subsidizing airlines currently. These are just to kind of get things going and then hopefully see these things be very successful.”

“The government really stepped up and supported us with this funding that we could put toward the incentive program,” he added.

Bogusz said other organizations also contributed towards the incentive program.

“The rest of the incentives are private but they were provided by the Airport Authority and other partners, including the Hotel Association and also Economic Development Regina,” he said.

In the future, Bogusz said they will keep trying to bring in direct flights to new U.S. cities. For years, Bogusz said residents have been asking the airport to do their best to restore non-stop service to a major U.S. hub.

“This is a critical part of ensuring that our city can keep growing and to provide a connectivity that's really needed for both the business and leisure community.”

A statement from the Ministry of Trade and Export Development said minimum revenue guarantees have been used as a tool in jurisdictions across North America to attract flight options. 

"The Government of Saskatchewan is committed to fostering a competitive business environment in the province and direct flights to the U.S.," the statement read. 

"Direct flights to Minneapolis connect Saskatchewan with a major U.S. hub airport creating more options for travelers and investors. They also make it easier for business travelers and tourists getting to and from Saskatchewan. Spin-off benefits from servicing the new flight also stimulate the local economy and support Saskatchewan’s tourism industry."