City pre-purchased $100,000 of Aeromar tickets
The over 40 page contract tells us what deal was reached to have Aeromar here and just how much it’s going to cost taxpayers to have access to Mexico City.
LAREDO, Tex. (KGNS) - The third airline to take residence at the Laredo International Airport is already booking direct flights to Mexico City on a weekly basis.
In January, the City of Laredo and Aeromar signed on the dotted line for a three year contract.
We’ve shown you the airline’s inaugural flight, but now we look into what the contract between both entities looks like. The over 40 page document tells us what deal was reached to have Aeromar here and just how much it’s going to cost taxpayers to have access to Mexico City.
The oldest airline in Mexico City took residence in the gateway city a few months ago.
COVID-19 put a hitch in the airline’s plans to start flights in May, but finally at the start of October they took to the skies.
At the inaugural first flight city, county, and federal officials boarded the plane and made their way to Mexico City.
Interestingly, tickets are one of the conditions in the contract between the City of Laredo and Aeromar.
We found that the city pre-purchased 286 round trip tickets at a cost of $100,000.
They will be used by city employees traveling to Mexico City for business purposes and will be distributed by the city authorized entities for the purpose of promoting the air service.
According to airport director Jeffery Miller, the pre-purchase of tickets helps with revenue guarantee and is a pretty standard practice in the airline industry.
In the contract it shows that Aeromar needs to make a minimum of $600,000 each quarter for the next three years.
If they don’t, the city will give them $200,000 to help offset their losses.
The incentive limit from the city for the term contract is $800,000, another standard practice for the industry.
Additionally, the city is waiving the airlines rental fees 100% for the first year. After that, it will be reduced to 75%. Some of the rental spaces include the ticket counter and office.
In order to get this, scheduled air service must meet a minimum of two weekly departures and a minimum of 136 weekly departing seats.
Lastly, $150,000 will be used for establishing and advertising new direct flight services during the term agreement.
The city is already using half of the amount for marketing you may notice around town.
Miller says that these incentives are approved by the Federal Aviation Administration.
The last time Laredo had a direct flight to Mexico was back in 2012.
The airline at the time, Aeromexico, would go to Monterrey.
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