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San Jose’s Subsidy for Airlines

San Jose International Airport Terminal B. Photo: Ken Paul

San Jose’s latest corporate giveaway is $740,630 to Frontier Airlines and Alaska Airlines over the next 18 months, approved unanimously by the City Council on Tuesday, September 12. The City of San Jose doles out millions of dollars every year to “help airlines offset initial large costs to start new service by waiving landing fees, ticket counter fees, and gate fees and provide marketing support.”

The money is supposed to help offset costs for the airlines to launch new flights between San Jose International Airport and Dallas, Denver, Austin, and San Antonio. That’s money coming from San Jose taxpayers and going directly into the profits of large airlines.

“It takes a lot of money to invest to get the airplane, the crew, the expenses and operate those flights,” said San Jose Director of Aviation John Aitken (408-392-3611) at the meeting. “We’re trying to, even at a very small percentage, share that start-up cost.”

“Gaining better access to national and international markets and technology centers has long been a priority of the region’s businesses,” states Aitken’s August 21 memo, which justifies the city’s ongoing corporate subsidies as “revenue positive”, claiming the new flights generate $42.5 million in economic activity in San Jose.

“Do you anticipate of us getting to any point in the next three or four years… in which things like this will not be necessary?” asked City Council member Sergio Jimenez.

“I think this program will evolve, whether or not it totally disappears is something we need to talk about,” replied Aitken. “Our facility is getting tight, and at some point we’ll have to make different choices.”

Mayor Sam Liccardo defended the corporate giveaway. “I think it’s important to emphasize that we get a lot of money than we spend, that’s for sure.”