Boone County Commission approve $50,000 for air service revenue guarantee

The Boone County Commission agreed to participate in a revenue guarantee agreement with United Airlines, which will begin to provide air service to Denver and Chicago starting Aug. 1.

The commission will contribute $50,000 to the $600,000 guarantee. Cole County also approved $50,000 and Jefferson City is providing $100,000. The University of Missouri is shelling out $200,000. Private investments make up the final $200,000.

The airline is guaranteed $600,000 in revenue its first year and if it doesn’t hit that benchmark, it can dip into the fund to make up the shortfall in empty seats.

When American Airlines began service in Columbia a few years ago, several entities contributed to a similar guarantee for two years and $3 million. The city only dipped into the fund once in two years, and the money was returned in full to the investors with interest added.

“We really need to step up and contribute our fair share,” said Commissioner Fred Parry. “We’re going to hope it’s just like American Airlines and we will get our initial investment back plus interest.”

New data from the city shows a 24 percent increase in ridership at the airport. For the first quarter of 2017, 17,491 people arrived at Columbia Regional Airport, while 17,446 people departed from mid-Missouri. Numbers from the same time last year show 14,215 arrivals and 13,987 departures.

“A rising tide raises all ships,” said Parry. “We believe that’s what happening at our airport.”

Parry said the commission is looking forward to the competition between American and United.

“I think that it is competition but it also increases the capacity of the airport. It also helps increase the number of options travelers have and encourages them to use our airport,” he said.

Parry said Monday’s Monday’s video of a man being dragged off a United Airlines flight for not giving up his seat on an overbooked flight didn’t affect the commission’s decision to approve money for the guarantee because they didn’t feel like airport officials were in a strong position to raise issue with it.

“If there were several airlines knocking on our door wanting to provide service to Columbia Regional Airport then perhaps we could raise it as an issue and use it as some type of leverage,” he said. “We’re hoping that’s just an isolated incident.”