Revenue Guarantee Fails

Despite a revenue guarantee, Horizon is cancelling its once daily, Q400 nonstop between Prince George, B.C. and Seattle October 5, citing fuel prices and a slowing economy. The revenue guarantee came from a coalition including Initiatives Prince George, the Prince George Airport Authority, Tourism BC, Mayor Kinsley, the Prince George City Council and the Prince George business community.
Under the terms of the contract, cut before the run up in fuel prices, the guarantee was to be paid to Horizon only if passenger loads didn’t meet an agreed-upon minimum. Fuel costs resulted in an increase in airline fares, dampened demand and, coupled with the economic slowdown, for the route drop. Horizon took several initiatives to reduce costs, including restructuring parts of its route system and transitioning to a single fleet of fuel-efficient Q400s.