POCATELLO — The City Council on Thursday approved a subsidy agreement with SkyWest Airlines to maintain commercial flights at Pocatello Regional Airport.

The City Council unanimously approved the subsidy during its regular meeting at City Hall with the expectation that the money will keep SkyWest, the airport's lone commercial airline, at the airport for at least the next calendar year. The subsidy could provide SkyWest with nearly $1.4 million in 2023.

"So we're kind of in a tough spot right now because we're still working to recover from some of the challenging things airports experienced due to the pandemic," said Alan Evans, manager of Pocatello Regional Airport. "I think as we move forward and realize what's coming our way in this community, air service is going to be very critical and that's why we're trying to hang on to this service. SkyWest has a desire to stay here. They know that it can be profitable and it will be profitable. We've just got to get through this bump in the road."

Under the terms of the agreement approved by the council on Thursday, SkyWest will continue to provide once daily air service between Pocatello and Salt Lake City and the city of Pocatello will pay SkyWest up to $346,459 per quarter in city funds next year if the airline's costs for serving Pocatello Regional Airport exceed revenue. The maximum subsidy the city of Pocatello will pay Skywest under the agreement is nearly $1.4 million.

Evans said that although most communities have begun to recover economically from the COVID-19 pandemic, smaller airlines like SkyWest are still having a difficult time finding pilots. Evans said smaller airlines have increased wages for pilots by about 80 percent in order to attract qualified applicants.

Some of the issues SkyWest has been dealing with were detailed in a Dec. 2 letter sent to Evans from Jeffrey Hartz, the managing director of air services development for Mead & Hunt. Hartz has served as the consultant to staff at Pocatello Regional Airport for approximately 15 years.

"While the pandemic has for the most part been passed by, the lingering effects especially on pilots will likely continue for the foreseeable future," Hartz's letter states. "The ability for regional airlines to retain or replace pilots has become one of the biggest challenges facing the airline industry since 9/11. While there have been steps taken by all airlines to try to reduce the impact of the pilot shortage, it is unlikely to have any appreciable improvement until mid-2023, or possibly later on, for the regional airline industry."

The letter also stated, "All of the major carriers continue to hire at record levels (to replace retiring pilots and rebuild numbers to prepandemic levels), and those pilots predominantly come from the regional airlines such as Skywest or Mesa. Service for smaller communities has been challenged due to the reduced regional airline flying. While there have been new service announcements, there have been relatively few for smaller communities.... This is a trend that will likely continue throughout 2023."

The Pocatello City Council in May approved an agreement to pay SkyWest up to $800,000 for lost revenue in 2022. To date, the city has paid SkyWest about $720,000 for the first three quarters in 2022 and will likely pay the remaining $80,000 for the final quarter, according to Kristy Heinz, the management assistant at Pocatello Regional Airport.

Pocatello Regional Airport is also utilizing COVID stimulus money provided to airports across the country as a result of the pandemic for operational costs, Mayor Brian Blad said.

While the subsidy approved Thursday will preserve SkyWest's daily flight between Pocatello Regional Airport and Salt Lake City for 2023, both Blad and Evans are of the opinion that state lawmakers are going to need to step in and provide some possible resolutions to this issue, which is affecting other regional airports throughout the state. The Twin Falls City Council voted to approve a similar revenue agreement with Skywest earlier this month to keep the airline at the Twin Falls airport.

"We have been faced with some tough decisions, but I think we've got to do something to preserve our airport," Blad said. "I think that as we move forward the state is going to have to start looking at what's important in the air service industry. Our airport is one of the six commercially flown airports in the state and it has the second-largest runway. If the state were to lose an airport like the one we have in Pocatello, that's an extremely expensive proposition to consider."

Both Evans and Blad also touted Pocatello Regional Airport as a huge economic development driver for the region. The airport can not only serve as a benefit for companies that import and export goods, but is also a valuable resource for the managers and administrators for large companies who travel frequently.