SeaPort Airlines (Portland International) has held off launching flights to Greenville, MS following disagreements with the operator of Memphis International over the financial terms of SeaPort's use of a passenger gate and waiting area in the airport's main concourse.

The Sun Herald says the flights, which were to have commenced on Monday, January 12, have now been postponed indefinitely.

"We thought we had a deal with the Memphis airport a year or so ago," Tim Sieber, SeaPort's executive vice president, said Tuesday. "We're trying to work with the airport to work out a financial model that will work. Originally, they said USD11,000 a month; that was a year ago. Then they came back at a little more than USD19,000, which wouldn't work under our model."

The Oregonian carrier won an Essential Air Services contract to ply the route on the back of a USD1,483,080 proposal. Using a Cessna (single turboprop) 208B Grand Caravan, the service is to operate 18x weekly.

According to Sieber, SeaPort's proposal hinged on airport charges totalling USD11'000 per month and that any more and the service would no longer be viable.

"When you're trying not to go over USD59 a seat — SeaPort's target price one-way between Greenville and Memphis after the first month's USD39 fare each way — and USD10 a seat is going straight to the airport, it doesn't work," he said.

For their part, airport authorities have insisted they cannot budge on the new quoted rates given federal regulations.

"I have to charge them rates and fees that are nominally the same as I charge other airlines. And there are federal rules I have to abide by. My hands are somewhat tied as to how low I can go," Scott Brockman, the president and chief executive officer of Memphis International Airport, said.

The rise in gate fees is attributed to Delta Air Lines's decision to dramatically trim its operations out of the airport. The resulting loss in revenue forced the airport to increase rates for all other operators.

While talks between the parties affected are scheduled to go ahead, SeaPort has warned that the US Department of Transportation may have to request a new round of proposals should a solution not be found.