A SkyWest aircraft at the Gillette-Campbell County Airport.
Air service from Gillette will continue for another year at least.
Campbell County Commissioners will pay for their share of the subsidy for the next year starting July 1, but will use the next six months or a year to consider various options for how to pay for it in the future.
“This obviously has a short fuse on it. It’s a no-brainer we need to have commercial air service here. It’s just a matter of how we do it,” said Commission Chairman Dan Coolidge on Tuesday at a joint lunch with the city of Gillette.
“I suspect we’ll have to participate in this (agreement) this year and then spend the next six months or a year evaluating and looking at other options and figuring out how we are going to pay for it,” Coolidge said. “I’m sure we’ll be having further conversations.”
SkyWest, the Utah-based company that provides Gillette service to Salt Lake City and Denver, wants to request $750,000 more from the state and the county in the new fiscal year to continue air service to Salt Lake City from the Gillette-Campbell County Airport. That would bring the total subsidy to about $2.5 million.
In the current fiscal year, SkyWest got about $1.7 million to subsidize its service between the cities, with Wyoming providing about 65 percent of that amount.
If the state picks up a half of the new cost, the county’s share in the next fiscal year will be about $1.2 million. But it’s unknown yet how much the state Aeronautics Division will pay because the billing will be done retroactively.
What will happen is the county and the state will agree on the contract with SkyWest. Every quarter, after the state does its accounting, it will bill the county for the county’s portion of the subsidy.
“We’ll have a number for ‘not to exceed’ amount in the contract, but we don’t know what the actual amount is yet,” Coolidge said.
City of Gillette help
To help pay the subsidy, the county plans to make a formal request to the city of Gillette so that the city can consider it in this budget session.
Mayor Tom Murphy said the city is considering contributing about $100,000.
“We would like to be able to help the county out on that and I think we will. It won’t be quite a lot of money,” he said. “It’s something.
“And even though it’s not our responsibility, we still feel we need to be community partners in that or at least try to help out in some way,” Murphy said. “There’s been talk at the council level and the administration level of maybe trying to find some money, and $100,000 has been kicked around as a token gesture to help with that.”
The city tries to plan for the next five years in its budgeting, so it’s difficult to find more money, especially given that revenues from the Optional 1 Percent Sales Tax are down by 15 percent this year to both the city and county.
Gillette affects Laramie
The county has been dealing with the dilemma of the raising subsidy for the past several months. They received letters from various local agencies in support of continuing air service in Gillette. If there were no service in Gillette, several local companies, that are also big contributors to local revenues, would suffer, according to a recent poll done by the Campbell County Economic Development Corp.
The service to Salt Lake City is tied to keeping the service to Denver because the company has to fly the planes to Salt Lake for maintenance, from where it flies them to Arizona or California. But before the planes from Gillette get to Salt Lake, they stop in Rock Springs. So it’s not just Gillette’s problem. It’s Rock Springs’ problem, too.
“If both Gillette and Rock Springs opt to do away with Salt Lake, SkyWest, without hesitation, said it will have to pull away the Denver piece because we would have no way to flow those airplanes over,” said Nick Wangler, founder and consultant with Forecast Inc. “But because they are now serving Laramie, which is an essential air service market, they would file notice to leave Laramie as well.”
Given the current woes the air service industry is facing, small communities like Gillette will see no relief in the near future, Wangler said.
Little airports lose
Since 2000, the domestic air service industry lost 41 percent of domestic flights.
“Where you are seeing it is predominantly in smaller communities across the country: in the Gillettes of the world, in the Cheyennes of the world, in the Rock Springs of the world, where you are losing capacity. And it’s not going to get any better any time soon,” Wangler said.
In the past 10 years, about 50 small markets like Gillette lost air service, and that number is expected to increase by another 100 in the next five years.
What those communities will end up doing is driving to a competitive airport that any community in the country has within a couple of hours of driving.
Nationwide, planes are 83 to 85 percent full on average. Flights from Gillette to Salt Lake City are generally 50 to 55 percent full; flights to Denver, about 70 to 75 percent, Wangler said. If planes from Gillette were 80 percent full, the county wouldn’t be dealing with the SkyWest subsidy dilemma.
And from the revenue point of view, Gillette is a small fry for air companies compared to markets like Atlanta, New York or even Denver. Wangler said three years ago, research showed that Jackson was about 170th from the top on the list of the most lucrative destinations to serve for air companies; Casper was about 329. Gillette was even lower.
Given that, Gillette doesn’t have much choice, Wangler said.
“There’s only so much leverage we have and so many things you can ask for because we are sitting at number 400 of things to do. If you ask for something and they change it, it’s great,” he said. “But if you don’t like the result, going back and asking them to undo it or fix it again, it’s kind of a slippery slope.”
Given that Gillette has the lowest air fares in the region, its next step should be to get more people to use the airport.
“We need to get the community to embrace it and get on more airplanes and fly more instead of driving,” Wrangler said. “Nationwide, other communities are doing a lot of what we are doing, which is doing a better job of understanding our metrics, doing more for marketing, doing more for promotion.
Unfortunately, they are going to have to do more for paying more for air service.”
Story and Photo: http://www.gillettenewsrecord.com
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