For a community that has long yearned for consistent air connectivity, the recent departure of Avelo Airlines from Salem Airport marked a significant setback. After a successful but ultimately short-lived tenure, the airport, officially known as Salem-Willamette Valley Airport (SXV), once again finds itself without a commercial airline, leaving a void for both business travelers and tourists. The cessation of flights on August 10, 2025, has reignited a critical debate among city officials, business leaders, and residents: what is the true cost of commercial air service, and what will it take to secure a sustainable future for the airport?
The current situation is far more complex than a simple change in airline strategy. It involves a confluence of factors, including the rising cost of airline subsidies, the ongoing expansion projects at the airport, and the critical need to retain essential infrastructure like TSA security equipment. This article will provide a detailed and engaging look at the current state of Salem Airport, outlining the challenges and opportunities ahead. We will explore the financial hurdles, the strategic efforts to court new carriers, and the long-term vision that will shape the future of air travel in the Willamette Valley.
Table of Contents
The Avelo Airlines Chapter: A Retrospective
The arrival of Avelo Airlines in October 2023 was a landmark event for the city of Salem. It marked the return of scheduled commercial passenger flights after years of dormancy, fulfilling a long-standing desire for convenient air travel. Over the course of its operation, Avelo flew approximately 90,000 passengers on 820 flights to and from destinations like Burbank and Las Vegas. This service brought an estimated $32.5 million in visitor spending to the area, according to a city report.
The success of the service was, however, heavily reliant on a Minimum Revenue Guarantee (MRG) fund of $1.2 million. This fund was created through a combination of an $850,000 federal grant and $350,000 in local community contributions. The MRG was designed to protect the airline from financial losses in its early stages of operation, ensuring a certain level of revenue even if ticket sales were lower than projected.
- High Passenger Load, Low Revenue: While passenger loads were strong—with a 74% load factor in the first quarter of 2025—the airline’s strategy of offering lower fares to sustain these numbers meant it frequently drew from the MRG fund. This reliance on the subsidy, along with a broader corporate realignment by Avelo, led to the airline’s decision to discontinue its West Coast operations.
- A Valuable Lesson: The Avelo experience demonstrated a clear demand for commercial air service in Salem. However, it also underscored the financial fragility of the market and the significant investment required to attract and maintain a low-cost carrier. The city’s investment in terminal and equipment upgrades, coupled with the reliance on a Minimum Revenue Guarantee, highlights that a successful air service requires substantial financial commitment from the community.
The Search for a Successor: Courting New Carriers
In the wake of Avelo’s departure, a multi-pronged effort is underway to attract a new airline. The City of Salem, along with local tourism and aviation advocates, is actively engaging with potential carriers to fill the void. This includes a consulting firm, which has been hired to help with the recruitment process.
- The Incentive Problem: The primary hurdle in this recruitment drive is the need for a new and much larger Minimum Revenue Guarantee. Due to rising costs in the aviation industry, initial conversations with consultants indicate that a new carrier would likely require a subsidy of $1.5 million to as much as $4.0 million to operate one or two destinations. This is a significant increase from the $1.2 million offered to Avelo.
- The Federal Grant Lifeline: The most promising source for this new funding is the next round of Small Community Air Service Development (SCASD) grants from the U.S. Department of Transportation. Applications for these grants open in the fall of 2025, with awards expected in early 2026. Securing this funding is a top priority, as a grant would provide the financial foundation needed to attract a new carrier. However, these grants require a local match, meaning the city and private donors will still need to contribute a significant amount.
- Potential Candidates: While no airline has publicly committed to a new service, advocates are in discussions with several carriers, including Breeze Airways and Alaska Airlines, which have been mentioned as potential candidates for some of Avelo’s former routes. The goal is to secure a letter of intent from an airline as soon as possible, as this is crucial for retaining valuable airport infrastructure.
Critical Infrastructure: The Race to Retain TSA Equipment
One of the most pressing issues facing Salem Airport is the status of its Transportation Security Administration (TSA) equipment. The passenger and baggage screening equipment, a costly and complex asset, was left in place by the TSA for a limited time after Avelo’s departure. The equipment’s continued presence is contingent upon the city demonstrating a viable plan to resume commercial air service.
- The 90-Day Deadline: According to city officials, without a letter of intent from a new airline, the TSA could begin removing its equipment as early as November 2025. If this happens, it could take years to get the equipment back, a process that would require a new application, federal approval, and significant lead time. This would essentially reset the entire effort to re-establish air service, making the recruitment of a new airline even more difficult and expensive.
- A Priority for Advocacy: The urgency of this situation has made the acquisition of a letter of intent a top priority for city councilors and aviation advocates. The ability to show the TSA a clear and committed path forward is a critical step in preserving the airport’s ability to handle passenger flights in the future.
Airport Development: A Long-Term Vision
Beyond the immediate crisis of securing a new airline, Salem Airport has several ongoing infrastructure projects aimed at improving its long-term viability and operational capacity. These developments are a testament to the city’s commitment to the airport’s future, regardless of the current challenges.
- Runway and Taxiway Upgrades: Projects are underway to rehabilitate key areas of the airfield. A reinforced concrete parking pad is being built to prevent asphalt damage from heavy aircraft, and the north portion of Taxiway A is scheduled for rehabilitation. These projects, funded largely by federal and state grants, ensure the airport remains compliant with Federal Aviation Administration (FAA) standards.
- Master Plan and Resiliency Study: The city is also in the process of updating the airport’s master plan, a long-term strategic document that will guide development for the coming decades. A state-funded Airport Resiliency Study will assess the seismic stability of the primary runway, a crucial step for ensuring the airport can serve as a hub for post-earthquake relief flights in a seismically active region. These projects show a commitment to a future that extends beyond short-term commercial service.
- The Broader Context: The state of Oregon, as a whole, is investing in its aviation infrastructure. The efforts at Salem Airport are part of a larger plan to enhance regional connectivity and economic development, reflecting a belief that airports in communities like Salem are vital to the state’s economic health.
Summary of Key Points
- Avelo’s Exit: Avelo Airlines ceased its commercial air service from Salem Airport on August 10, 2025, despite strong passenger numbers, due to financial factors and a corporate realignment.
- Financial Hurdle: The city now needs to secure a new Minimum Revenue Guarantee of up to $4.0 million, a significant increase from the previous subsidy. The next round of federal SCASD grants is the most likely funding source.
- TSA Equipment Risk: The airport risks losing its crucial TSA security equipment by November 2025 if a new airline does not provide a letter of intent to resume flights.
- Ongoing Development: The city is continuing with significant infrastructure projects, including runway upgrades and a new master plan, demonstrating a long-term commitment to the airport’s future.
- Recruitment Efforts: A dedicated team is actively courting new carriers like Breeze Airways and Alaska Airlines, with a primary focus on securing the necessary funding and a firm commitment from an airline.
FAQ Section
Q1: Why did Avelo Airlines leave Salem if flights were busy? A: While flights from Salem Airport had a good passenger load, Avelo Airlines‘ business model of offering low fares meant they frequently relied on the Minimum Revenue Guarantee to cover costs. The airline’s decision to cease service was part of a larger corporate realignment to shift resources away from the West Coast.
Q2: What is a Minimum Revenue Guarantee (MRG)? A: An MRG is a financial incentive offered to an airline by a community to mitigate the risk of starting a new route. The community agrees to make up the difference if the airline’s revenue from ticket sales falls below a certain pre-agreed-upon threshold. It’s a way to subsidize and support a new flight service until it becomes self-sustaining.
Q3: How important is the TSA equipment? A: The TSA equipment is critical for processing passengers and their baggage, and without it, the airport cannot operate commercial air service. Losing this equipment would mean a lengthy and expensive process to re-establish the security infrastructure, which would make attracting a new airline a much more difficult proposition.
Q4: Are there any other airports near Salem I can use? A: Yes, the closest and largest airport is Portland International Airport (PDX), which is about a one-hour drive north of Salem. There is also Eugene Airport (EUG) to the south, which offers additional flight options.
Conclusion
The future of commercial air service at Salem Airport is at a pivotal moment. The departure of Avelo Airlines has left the community with both a challenge and an opportunity to define a more sustainable path forward. While the financial demands for a new airline are significant, the community’s demonstrated demand for flights and the ongoing infrastructure upgrades provide a strong foundation. The immediate priority is to secure a new Minimum Revenue Guarantee and a letter of intent from a carrier to retain essential TSA equipment. By doing so, Salem can transform this period of uncertainty into a strategic step toward a more connected and prosperous future.
Disclaimer
This article is for informational purposes only and is based on publicly available reports, news articles, and official statements as of August 2025. This content does not represent a guarantee of future events or a legal opinion. The situation at Salem Airport is subject to change based on ongoing negotiations, funding decisions, and airline strategies.
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