What Does a Smaller City Have to Do to Attract New Commercial Airline Service?

Mar 7, 2017

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Last week, United Airlines announced it would begin new service to both international and domestic markets. In addition to adding flights between San Francisco (SFO) and Munich (MUC), the carrier also detailed plans to launch service in four new domestic markets — Columbia, MO (COU), Champaign/Urbana, IL (CMI), Rochester, MN (RST) and Santa Rosa, CA (STS).

Columbia Regional Airport (COU) was awarded nonstop routes from two of United’s hubs — daily service from Denver (DEN) and 2x daily service from Chicago (ORD), both beginning August 1. But what does it actually take for a regional airport to get service from an airline like United? Money — and a lot of it.

A proposal from the city of Columbia will guarantee the Chicago-based carrier $600,000 in revenue in one year for flights to and from DEN. A memo to the Columbia City Council (PDF) detailed the proposal, which outlined that COU would get daily, scheduled nonstop service and will guarantee a minimum revenue requirement of $600,000 for one year. In addition, the city of Columbia will waive landing fees and facility rent (for offices and ticket counters) for one year (up to $125,000) and fund marketing support for United’s Denver service (valued at $250,000). In all, the total amount could be worth $975,000.

COU is currently served only by American Airlines, which operates two daily flights from ORD (except on Saturdays, when it only operates one flight per day), and two daily flights from Dallas (DFW). Those routes were launched in 2012, when the city of Columbia guaranteed AA $3 million in two years — far more than the city is guaranteeing United. Of the money raised for the AA guarantee fund, 80% was returned to the city in 2015 — the airline required one payment of $22,562 in March 2013 for two weeks of low passenger utilization. As for the $600,000 the city of Columbia is guaranteeing to United, a councilwoman said that most of it has already been raised, with private companies contributing most of the money.

This is a great example of all that goes into a small, regional airport attracting new commercial airline service. The city, which has a population of around 108,000 people, is home to three higher education institutions, including the University of Missouri (~32,000 students). The city and donors to the fund (including the University of Missouri) are hoping that the additional services connecting the mid-Missouri city with Chicago and Denver will broaden its appeal to out-of-state students. In this case, and in most other just like this, it’s a win-win situation: the city gets more commercial air service (which hopefully translates to more passengers using the airport) and the airline gets a one-year revenue guarantee.

H/T: Columbia Missourian

Featured image courtesy of Notley Hawkins via Getty Images.

Chase Sapphire Preferred® Card

WELCOME OFFER: 80,000 Points


CARD HIGHLIGHTS: 3X points on dining and 2x points on travel, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

Apply Now
More Things to Know
  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®.
  • Enjoy benefits such as a $50 annual Ultimate Rewards Hotel Credit, 5x on travel purchased through Chase Ultimate Rewards®, 3x on dining and 2x on all other travel purchases, plus more.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
  • With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
Regular APR
16.24% - 23.24% Variable
Annual Fee
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.