With no local businesses having bought advance tickets for Kiwi International Air Lines flights from Niagara Falls International Airport, Niagara County Legislator Robert R. Villani suggested Friday that the county settle for written commitments instead of cash.
Niagara Falls Area Chamber of Commerce president Charles K. Steiner, whose group is spearheading the sales effort, said Friday, "The interest is there. The necessary commitments, however, are not meeting the goal. . . . There is no money."
Villani, a member of the county Industrial Development Agency and a legislator, said, "They're not doing well as far as sales are concerned, but they're getting commitments. . . . We may have to reconsider it and ask for written commitments."
On Sept. 16, the Legislature approved a contract with the IDA making a $550,000 loan for the airline contingent on the sale of 300 books of 10 one-way fares from Niagara Falls to Newark, N.J.
The price was not specified, although Kiwi executives had said their fares might be as low as $99.
Kiwi sought the loan to pay start-up and marketing costs for a daily Niagara Falls service and asked for at least $250,000 in advance purchases to show Niagara Falls' viability as a market for the discount carrier. IDA Chairman David W. Supon commented, "Kiwi is going to come to this airport more because we want them to come than that they want to come."
Last month, Kiwi announced it would add Boston and Tampa to its schedule. It did not ask for any loans or advance sales from those cities.
In order to convince the Legislature to back off on the cash sales requirement, Villani said, "I need a good, strong personal guarantee (for the $550,000 loan)."
That guarantee, another requirement written into the contract the Legislature approved, has not yet been received. IDA Executive Director John R. Simon said last week that Joseph Logan, the principal owner of Wasatch International, a company that has a $2 million debt position in Kiwi, was to provide that guarantee.
However, no personal financial information for Logan or anyone else involved in Kiwi seems to have been received.
Villani said he wants to know what collateral will be put up. "We'll check to make sure those assets are free and clear, too," he vowed.
Supon said the sales effort is dogged by a "catch-22." He said Kiwi wants to make sure the market exists here, while the market wants to know whether the airline really will be there.
"I know that it's pretty tough to sell something that doesn't exist yet," Supon said.
Villani said businesses "seem to fear the idea of coming out with dollars. I think corporations are leery of paying for something they're not getting."
Steiner said the sales effort will continue, with the Greater Buffalo Partnership and the Niagara Frontier Transportation Authority becoming involved in the push. Villani said the NFTA also has agreed to help analyze Kiwi's financial statements.
But Villani and Supon said that a shipment of financial data from the airline this week was inadequate. Supon said Simon "mentioned that they had sent some documents, but it wasn't everything we asked for."
Villani said some of the financial data was not fully audited as the IDA had requested. Simon could not be reached for comment.