Columbia City Council discusses funding for American Airlines flights
The city guaranteed American Airlines $3 million in revenue in a two-year period.
Oct. 16, 2012
The Columbia City Council discussed the possibility of bringing American Airlines to the Columbia Regional Airport during its meeting Monday night.
In the contract, American Eagle Airlines, a subsidiary of American Airlines, agrees to fly two trips daily to the Dallas/Fort Worth International Airport and one daily flight to Chicago O’Hare International Airport beginning in February 2013. Each flight can carry no more than 50 passengers.
In the agreement, the city guarantees American Airlines at most $3 million in revenues in a two-year period. The city will pay about $5,000 for each one-way flight to Dallas and about $4,400 for each one-way flight to Chicago. Columbia would only pay this money to American Airlines if the flights don’t gain their expected revenue.
In the agreement, the city, MU, Jefferson City, local businesses and Boone and Cole counties agree to split the amount that they would have to pay to American Airlines in case there aren’t enough people flying. They would put the money into a fund that would pay the airline every month. If American Airlines received its expected revenue, the money would be given back to the city with interest.
Columbia officials don't expect the agreement to cost $3 million because they expect the public to meet the demand for the new flights. To help spread awareness and to raise the demand for Columbia Regional Airport, the city is hiring Zimmer Radio Inc. for marketing. Columbia is paying $68,000 per year for services, and Zimmer Radio is planning to donate about $150,000 per year for advertising.
“We believe that 981 people from this area on average go on flights every day,” Mayor Bob McDavid said. “We’re looking to get 40 percent of them. Only 11 percent are flying out of our airport.”
The expansion of flights might help students traveling back and forth from MU, but businesses are also excited about this investment in the airport. Columbia Chamber of Commerce President Don Laird said 39 businesses pledged $640,000 to guarantee revenue funds to help the city get American Airlines.
“For the businesses, they want these flights not just for themselves or their employees,” Laird said. "They want it to make it easier for customers and clients to get into town.”
Eugene Elkin wasn’t as happy about the agreement as Laird. He expressed concern about the city spending too much money on projects, especially after cutting an insurance subsidy to retired firefighters. He said he thinks the city will end up giving up too much money because there won’t be enough people flying.
“I know this because I lived here,” Elkin said. “We’ve seen this so many times. I’ve seen airlines come and go. I want it to succeed, but you’ve got to be careful on how far you stretch your money.”
City Council will hold a special meeting at 8 a.m. Oct. 22 to approve the measure. Council members Helen Anthony and Fred Schmidt will not be in attendance, but McDavid expects the measure to pass with no opposition.