Home Education U of I owes $400,000 airline subsidy

U of I owes $400,000 airline subsidy

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(UPDATED, 1:28 p.m., with additional comment from the University of Idaho.)

Idaho State University will pay $400,000 to subsidize air travel to and from the Palouse for the academic year that just ended.

But U of I officials say the subsidized service is doing what they wanted: It’s helping the university attract students from the densely populated Treasure Valley.

A payout of $400,000 closes the books in the first year three-year contract between the University of Idaho and Alaska Airlines. Under the agreement, Alaska promises to provide five round-trip flights per week between Boise and Pullman, Washington. But there was a catch to the deal: U of I agreed to pay Alaska up to $500,000 if the flights didn’t generate a 10% profit margin.

The airline will receive the full $500,000 grant, but nearby Washington State University has agreed to chip in $100,000, U of I spokeswoman Jodi Walker said last week.

The grant will come from the U of I’s budget reserves, said Brian Foisey, U of I vice president for finance and administration. And the subsidy is not completely unexpected.

When U of I President K. Scott Green presented the contract to the State Board of Education in May 2021, he said he expected the U of I would have to absorb some of the costs, but not the full amount.

It’s unclear exactly why the flights fell short of Alaska’s 10% profit target — and whether that’s a function of higher-than-expected costs, lower-than-expected passenger numbers or some combination of the two.

But in an email to Idaho Education News last week, Walker suggested that ridership was at least part of the problem.

“It takes time to relearn travel patterns, and Moscow hasn’t served Boise for so long,” she said.

In an emailed statement Tuesday, Alaska also took the long view.

“Stimulating new markets takes time,” the airline said. “We expect increased traffic as we enter our second year of service and have no plans to reduce service going forward.”

Boyce-Pullman flights were discontinued for several years resumed in August.

U of I pushed for the Alaska contract in hopes of attracting Treasure Valley students. Treasure Valley is one of the U of I’s recruiting centers, but a six-hour winding mountain drive separates the valley from the Moscow campus.

The U of I also says the air service will help university employees who have to travel to Boise for business.

The U of I doesn’t have exact numbers on student or staff use of flights, but enrollment numbers suggest the air travel subsidy is paying for itself. Last fall, Treasure Valley’s first-year enrollment increased by 56, and Treasure Valley’s total enrollment increased by 228 students. And each undergraduate student generates more than $10,000 in revenue for the U of I, Foisey said.

The state board unanimously approved the contract with Alaska Airlines, and despite the first-year payout, the board supports the decision.

“Students should be able to travel safely and efficiently between Moscow and the Treasure Valley,” board spokesman Mike Keckler said Tuesday. “That is why President Green sees the agreement as a way to improve recruitment and retention at the University of Idaho, and the board agreed to it.”

The contract runs for two more years — and subsidies could continue to reach $500,000 a year.

The U of I is optimistic moving forward, Walker said. Alaska is aiming for an air route and is adding connecting flights from Boise to other destinations. And U of I officials say the rising price of gas may encourage travelers headed to Moscow to consider flying.

“While inflation will likely make flying more expensive, it has already made driving more expensive,” Foisy said Wednesday.

About Kevin Richert

Senior reporter and blogger Kevin Richert specializes in education policy and education policy. He has more than 30 years of experience in Idaho journalism. He is a frequent guest on KIVI 6 On Your Side; “Idaho Reports” on Idaho Public Television; and “Idaho Matters” on Boise State Public Radio. Follow Kevin on Twitter: @KevinRichert. It can be reached at the address [email protected]

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