This week, I had a chance to go back over the presentations made during the Mammoth Lakes Tourism open house on Nov. 12. I was struck by the following.

In his air service presentation, MLT’s John Urdi talked about “right-sizing” air service. This is why he noted a 17.2% reduction (7,666 seats) in winter air service capacity for the coming year.

Urdi told The Sheet the seats removed were during non-peak days and times. “Reducing these seats allows us to branch out and conservatively go into markets like Denver and Las Vegas.”

Last year’s actual winter air service numbers outlined in the presentation showed 20,340 passengers at a 50% load factor.

That implies a seat capacity of 20,340 x 2 or ~41,000 seats last year. Winter air subsidy was approx. $3.3 million ($1.5 million from TBID (tourist tax) and more than $1.8 million from MMSA). That factors to about an $80 subsidy for every seat.

Remove 7,666 seats @ $80/seat and you’re reducing your air subsidy by about $617,000. Granted, that’s on the asumption all things are equal, and Urdi said they’re not. New markets carry more risk and may carry fewer passengers and a greater subsidy, It’s hard to imagine, however, that there will not be an overall savings when you remove 8,000 seats on non-performing flights.

The way the subsidy is determined now is that TBID pays the first $1.5 million and MMSA pays anything above that. So MMSA pays the last dollar.

If you remove $617,000 in potentially subsidized seats, MMSA is the sole beneficiary of a “right-sizing.” A reduction in seats (and air service) should trigger a reduction in air subsidy for both parties, not just one. That hasn’t happened, and it should.

Further, when the TBID was passed, it was advertised to generate $4.7 million a year, of which MMSA would pay $2.2 million in TBID. The idea was that MMSA’s TBID contribution would cover the Town’s air subsidy. In reality, last year (according to MLT), TBID generated $3.7 million, of which MMSA’s contribution was just $1.2 million. Meanwhile, MLT paid $2.25 million in air subsidy.

So it appears MMSA is short on the front end and the back end.

MLT (the taxpayer) appears to be backfilling these holes.

Perhaps it’s time to reexamine this deal.