Sunday, July 03, 2016

What Billings Logan International Airport (KBIL) needs to land a new airline

Kathryn's Report:

Gazette opinion: What Billings needs to land a new airline

Billings efforts to land a direct flight to Dallas moved closer to launch last week with the award of a $750,000 federal grant.

The Billings Tourism Improvement District, Billings Chamber of Commerce and Big Sky Economic Development have partnered with Billings Logan International Airport to expand air service to Montana’s largest city. The private partners have committed to raising $700,000 in private contributions that, along with the $750,000 federal grant, can guarantee revenue and marketing to start a new direct air route between Billings and Dallas.

Shane Ketterling, assistant Billings airport director, received the good grant news Thursday in a call from the office of Sen. Jon Tester.

“We were thrilled,” Ketterling said, adding that Tester’s staff offered to help in any way they could to move the service expansion forward.

Letters of Support

More than two dozen letters of support were part of the 57-page grant application, including letters from Tester, Sen. Steve Daines, Rep. Ryan Zinke, School Superintendent Terry Bouck, Montana State University Billings Chancellor Mark Nook, Burlington Northern Sante Fe Railroad, NorthWestern Energy, Billings bank executives and hoteliers.

Crucially, one letter came from American Airlines. “American Airlines strongly supports the strategic plan for a revenue guarantee, marketing campaign and fee waivers to support nonstop services to Dallas-Fort Worth International Airport,” Michael Barich, senior manager of domestic route planning in Fort Worth, wrote on April 7. Barich stated that the grant wouldn’t guarantee that the airline started serving Billings, but “will help the potential case for the service.”

Analysis of air passenger data has for years demonstrated that Dallas is the top final destination for Billings travelers among cities with no direct flight from Billings. United, Delta and Alaska provide daily service to Denver, Salt Lake City, Minneapolis, Portland and Seattle. Allegiant flies to southwest cities. But there’s a southeast gap in Billings’ flight map — a gap that service to Dallas will fill.

Over the past decade, Billings has seen an increase in air passengers, but a decrease in available flights and seats. The result is full flights and ticket prices that are higher than most cities. The average ticket in Billings costs slightly more than in Bozeman and significantly more than in other Northwest cities.

In 2006, Billings logged 10,890 airline flight departures with 568,738 seats. In 2015, there were only 9,720 flights with 526,315 seats. While flights decreased 11 percent and seats went down 7 percent, passengers were up 3 percent.

Ramp-up revenue 

The Billings strategic plan includes a revenue guarantee for American during the first 12 months of service as passenger volume ramps up. Additionally, the plan calls for spending $200,000 to market the new service.

If Billings and American successfully conclude negotiations this fall, nonstop service between Billings and Dallas could begin in June 2017.

American entered the Montana market on June 2 when it started daily nonstop flights to Bozeman from Dallas. The service provided on 50-passenger Mesa Airlines jets brings one flight into Bozeman daily and takes one flight out.

The fact that Bozeman landed a direct flight from Dallas bodes well for Billings’ chances. There could be economies of scale for American if it serves multiple Montana markets.

This public-private partnership between Billings business organizations and the city is the model Bozeman has used to expand its airline service. The key missing ingredient in Billings — until now — has been private business contributions toward a ramp-up revenue guarantee.

The federal grant to expand service was the second big award announced last week for the Billings airport. The city also received approval of $1 million in Federal Aviation Administration Airport Improvement Program funding to help with planned upgrades of the terminal.

Although Billings leaders have met with American Airlines in Dallas, the airline decision makers haven’t seen our city. We invite American to visit Billings, to see that our thriving city is a great market for air service to Dallas as well as destinations south and east.

Thanks to everyone who is cooperating to launch new airline service in Billings. Finally, Montana’s largest city has the public-private partnership, and the seed money to land new flights to serve our unique and growing market.

Original article can be found here:

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