Salem officials are still determining the future of the city-run airport after Avelo Airlines announced Monday it would shutter its West Coast operations, ending weekly flights from Salem to Las Vegas and the Los Angeles area.

Meanwhile, business leaders who spent years trying to bring commercial flights to Salem, said they’re working on recruiting a new airline to serve Oregon’s capital.

Avelo’s abrupt departure came after less than two years of flights out of Salem, while the airline had subsidies in effect to start up its operations. 

Airline leaders said the decision didn’t reflect on Salem’s performance, and city data shows flights were mostly full, particularly on the route to Burbank in the Los Angeles area.

The airline also faced protests in Salem and other cities over its decision to fly deportation flights out of the southwest, though company officials said the protests didn’t impact business or contribute to their decision to leave.

Some 2,100 passengers flew out of Salem in June, city data shows, with a near equal number coming in.

Avelo is closing its Burbank base in December and ending flights to all other West Coast cities. Its last Salem flight will be Aug. 10.

The departure is likely to reignite disagreements in Salem over whether the city should continue efforts to recruit an airline.

City councilors haven’t publicly commented on Avelo’s departure.

They’re due to receive a briefing in a July 28 city council meeting and will discuss the issue Aug. 18.

Councilors were unanimous in a 2023 vote to to use $2.4 million from the city’s general fund to pay for terminal upgrades and beef up airport operations.

Supporters, largely from the business and tourism groups, cited the economic benefits to Salem and convenience for travelers. Detractors raised concerns about the city’s priorities given an impending budget deficit, the viability of air service given the proximity of Eugene and Portland airports, and the environmental and noise impacts of commercial flights.

Brent DeHart is an aviation fueling business owner who leads the Fly Salem Steering Committee. He said now is the ideal time to recruit a new airline. Salem has an upgraded terminal and data showing people will fly to and from the city — factors not in place when Avelo was in talks.

Avelo flights to Burbank in June were 87% full, down slightly from 90% in June 2024, he said. The airline’s Las Vegas flights, which started year-round and then became seasonal, were 77% full in June, up from 72% in 2024.

“Those are very good and sustainable numbers typically,” DeHart said in an email. 

That occurred as domestic air travel nationwide declined.

Air service costs and benefits

Getting Avelo to Salem took a patchwork of government and private money. Some of that spending was to improve the airport in ways that can be used by any carrier.

Other money subsidized Avelo’s costs to fly to Salem.

Salem set aside $1.2 million to pay Avelo over its first two years if flights didn’t bring in as much revenue as expected. None of that money came from city coffers — $850,000 was a federal grant, and $350,000 was from private donations raised by Travel Salem.

Through the end of June, Salem spent $854,733 of that total, or 71%, city spokeswoman Erin Neff said. Of that, about $600,000 came from the federal grant, which has to be returned if unused. About $250,000 came from private donations. 

Airport operating costs increased with commercial service, and Avelo didn’t stay long enough for the city to begin making money to offset those increases. 

The city waived airport fees for the airline during its first two years of operation in Salem, according to the contract – a standard incentive used by airports to lure new airlines.

READ IT: Avelo’s contract with the city of Salem and minimum revenue guarantee

Had Avelo stayed longer, the company would have paid $1 per departing passenger starting in year three, and $1.50 per square foot of rented terminal space at the airport.

Other city money was used for terminal improvements and equipment, most notably the 2023 renovation at a little under $2 million.

A $540,000 state grant in 2022 allowed the city to buy equipment and vehicles needed to serve aircraft.

The city keeps that equipment, so those costs won’t be repeated if another airline comes to town.

“There’s a disconnect in people’s minds that the money was spent for Avelo,” DeHart said. 

The money modernized the terminal, he said. 

“It’s turnkey ready to go with no further financial investment,” he said.

The airport has also attracted additional federal money for improvements because it had commercial air service, DeHart said.

In 2025, the airport received $1.7 million from several federal grants for security, terminal and aircraft parking improvements, Neff said.

A city airport consultant said in the fall that Avelo’s first year of operations brought $19 million to Salem’s economy through spending from visitors on hotels, restaurants and more.

A new airline?

Travel Salem and the Salem Area Chamber of Commerce support the effort to recruit a new airline.

Both sent out a survey shortly after Avelo’s announcement to gauge support for a new airline and see where people want flights to go.

That came as budget carrier Breeze Airways announced Thursday it was beefing up its West Coast operations to fill many routes vacated by Avelo, including adding flights to Eugene and Redmond. Salem wasn’t on the list.

DeHart said a group is working on an incentive package for a new carrier, which would include revenue guarantees and airport fee waivers. It’s not yet clear where the money for those efforts would come from, and the city council likely would need to commit to any city spending.

“Fly Salem feels very confident with a competitive incentive package that we would also be on the list for airlines to take up the vacating routes,” he said.

RELATED COVERAGE:

Councilors won’t act on Avelo contract, saying it’s financially risky

One year in, Avelo has received $446k from grant to subsidize Salem operations

Avelo cancels Salem-Las Vegas flights, shifting to seasonal route

Contact reporter Rachel Alexander: [email protected] or 503-575-1241.

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