What’s a Minimum Revenue Guarantee (MRG)?
- Data demonstrating demand in the “catchment area,” which we have in the “Leakage and Retention Study.”
- Community and regional support—especially the business community. This is in place and growing. See Letters of Support page.
- A marketing plan to promote the new service: Travel Salem has prepared a two-year marketing plan, and it has been funded by the ROAR Grant. See Grants page.
- And now, lastly, a Minimum Revenue Guarantee (MRG).
Here’s How It Works
- A Small Community Air Service Development (SCASD) Grant through the US Department of Transportation of $850,000.
- Local private sector contributions. The participants will deposit money into the dedicated fund only after an airline commits to starting a new service. Our need is a minimum of $350,000 to match the SCASD Grant, up to $1 million at a later date.
- If enough tickets are purchased, filling approximately 85% of seats, the MRG is never used, and the funds are given back to the donors after the 2 year period.
- We only need to capture about 10% of existing ticket buyers in our area to fill the planes to 85%.