United Airlines uses full revenue guarantee at Columbia Regional Airport

UPDATE: Representatives from the organizations that donated to the fund said they were surprised to learn that it had been used up, but tried to look at at the big picture.

Of the private businesses, Veterans United put in the most with $50,000. Executive Director Greg Steinhoff said they were pleased with where the airport is now and where it’s headed.

“We made the investment with the idea that it would all be gone potentially,” he said. “When you look at it from this investment for all the flights we’ve gotten, it’s a great deal for mid-Missouri.

Shelter Insurance has a large stake in the airport because they have folks that fly domestically and internationally, so more access to major hubs helps the company in the long run. It donated the second largest of the private groups, $15,000.

“Having United is a big deal to us,” said Public Relations Director Jay MacLellen. “They’ve been in this market six months to a year, it’s still early on. We have to have some time to grow.

Jefferson City put $100,000 into the guarantee fund. Mayor Carrie Tergin said they would have liked to get the revenue back but it was still an investment she supports.

“With COU experiencing a record number of enplanements and expecting more, and looking at passenger counts growing from 20,000 to 200,000 in just ten years, the benefit to United and American from having Jefferson City and businesses support the route through the revenue guarantee has clearly shown an increase in the overall airport looking at the big picture of the investment, not narrowly through the one route,” she said in an email.

Cole County Commissioner Sam Bushman showed some concern. He said the region was spoiled when American Airlines was able to return the revenue.

“As the Columbia Regional airport continues to grow we will need more flights, not less,” he said. “I fly more to the East coast, so I would love to see a flight to Baltimore.”

In a statement, United Airlines spokesman Jonathan Guerin said, “United will continue to offer service between Columbia and Denver and because this is a fairly new market. We are giving the service more time to build. We will continue to review demand for travel and make adjustments as needed.”

ORIGINAL STORY: United Airlines has used the full revenue guarantee funded by both private and public organizations for the first year of its Denver flight.

The fund guaranteed United Airlines up to $600,000 in the first year if revenue fell short because of empty seats.

City manager Mike Matthes sent a letter to revenue guarantee partners Tuesday, which includes Boone County, Jefferson City, the University of Missouri and dozens of local businesses, to tell them that United had invoiced the city of Columbia for the maximum amount.

“The revenue guarantee did exactly what it’s supposed to do,” he told them. “Revenue guarantees are for the purpose of building a new market. Our investments in the revenue guarantee worked as it brought new service, new destinations and new choices to our market.”

Columbia also committed $250,000 for marketing of the Denver service.

A similar revenue guarantee approved by City Council back in 2013 provided $3 million to American Airlines in its first two years to establish flights to Dallas/Fort Worth and Chicago. American used about $22,000 of that fund. The remaining was returned to the investors.

According to city spokesman Steve Sapp, United has stated it plans to continue with the Denver service this year without requesting additional funds.

Matthes said United wants to give the flight a full year to mature.

“United told us they want to be here,” he said. “United is committed to the mid-Missouri market.”

United began service on Aug. 1. It also services two flights to Chicago.