Horry County Council and Its WestJet Guarantee

By Paul Gable

The vote by Horry County Council earlier this week to set aside a contingency fund of $1 million to guarantee Canadian airline WestJet from suffering losses on new passenger service to Myrtle Beach International Airport continues to be a topic of discussion by the general public.

Several times this past week I was asked the question, “What is Horry County Council thinking by guaranteeing a private business against losses?”

My first inclination was to respond that ‘Horry County Council thinking’ is an oxymoron, but I settled for ‘I don’t have the slightest idea.’

A friend of mine said he hoped there was something else we didn’t know about the deal that would justify such a move by county council.

Acting county council chairman Gary Loftus was quoted as saying the county fund doesn’t make a difference because there is almost no chance it will be used.

If that is so, why did county council feel the need to vote 10-1 to approve something that will not be needed?

Maybe a glimpse of that ‘something else’ comes from a comment made to a local newspaper from a writer in Ottawa, Canada. The writer said he had checked the price of a roundtrip ticket to Myrtle Beach and found it to be almost $800. He went on to say a person can fly from Toronto to Florida or England for approximately half that price.

“I hate to spoil the party but WestJet is going to be a real disappointment for the airport…, the writer went on.

If ticket prices are high and per plane occupancy is low, the county’s fund is going to make up the difference for WestJet to the tune of guaranteeing revenue equivalent to 60% occupancy per flight, estimated to be the break-even point for the flights.

It is not a new phenomenon for county council to look at airport operations through rose colored glasses.  The airport is expected to open its newly expanded passenger terminal facilities, at a cost of $130 million plus financing, in early April.

The expansion was justified with passenger growth projections that were obviously too high when council bought into them in 2007. According to those projections, the airport was supposed to have more than 1 million departing passengers in 2012.

That projection was missed by a mere 25%, but who’s counting?

Obviously no one and the result is while county council may not always get what it pays for, it generally gets what it deserves for the rather cursory examination it gives to many issues that involve the expense of real taxpayer money.