Anytime people talk about Lubbock being remote and hard to get to, we should reference that it is much easier to get to and better supported by the airline industry than some of our peers.
“American is willing to continue such air service only if it is able to limit its economic risk by receiving a revenue guarantee,” an agreement between the airline, the city and the university said.
The deal comes as dozens of small communities across the country are facing the loss of air service from major air carriers that no longer see a profit outside of major cities. American Airlines has cut service to nine airports in the U.S. since the beginning of the COVID-19 pandemic, including cities such as New Haven, Conn., and Joplin, Mo., in late 2021 when rules from the $60 billion in federal airline stimulus expired and left rural areas on their own to support air service.
Other even smaller cities were cut early in the pandemic and service hasn’t returned.
“Due to the severe impact of the COVID-19 pandemic on air travel across the nation, especially our community, American Airlines has requested financial support in order to continue air service throughout the recovery period of the pandemic,” Stillwater Regional Airport’s staff wrote in a presentation to Stillwater’s City Council. “Airlines are facing increased operational costs due to unusually high fuel prices and lower ridership.”
Stillwater agreed to cover half the costs and OSU the other half.
In the fall, United Airlines said it was cutting service to 11 small airports, including Killeen-Fort Hood and Easterwood Airport in College Station, both in Texas. Killeen-Fort Hood and College Station are also serviced by American Airlines, leaving one air carrier at the airports that previously had two.
For cities such as Stillwater, American Airlines is the only option for travelers and college students not wanting to drive two hours or more to Oklahoma City or Tulsa to catch a flight.
The deal means the local government and the university will cover any revenue short of $4 million, starting this June and ending at the end of 2023.
It’s common for airports to extend aid to airlines to lure routes and increase service. Usually, that includes money for billboards to advertise routes or discounts on airport gate and landing fees.
In this case with a revenue guarantee, the city and university could end up paying substantially less or even nothing at all if enough passengers book flights. But it also puts the risk on the city and school, not American Airlines, which lost nearly $2 billion in 2021 and is seeing increased costs from fuel along with a shortage or regional airline pilots.
A small town and its university are paying American Airlines up to $4 million to keep flying there
American Airlines has flown to Stillwater, Okla., since 2017, but that relationship was at risk until the city and Oklahoma State University brokered a deal.
Fort Worth-based American Airlines has inked a deal with the city of Stillwater, Okla., and Oklahoma State University that will pay the carrier up to $4 million over the next two years to keep daily flights.“American is willing to continue such air service only if it is able to limit its economic risk by receiving a revenue guarantee,” an agreement between the airline, the city and the university said.
The deal comes as dozens of small communities across the country are facing the loss of air service from major air carriers that no longer see a profit outside of major cities. American Airlines has cut service to nine airports in the U.S. since the beginning of the COVID-19 pandemic, including cities such as New Haven, Conn., and Joplin, Mo., in late 2021 when rules from the $60 billion in federal airline stimulus expired and left rural areas on their own to support air service.
Other even smaller cities were cut early in the pandemic and service hasn’t returned.
“Due to the severe impact of the COVID-19 pandemic on air travel across the nation, especially our community, American Airlines has requested financial support in order to continue air service throughout the recovery period of the pandemic,” Stillwater Regional Airport’s staff wrote in a presentation to Stillwater’s City Council. “Airlines are facing increased operational costs due to unusually high fuel prices and lower ridership.”
Stillwater agreed to cover half the costs and OSU the other half.
In the fall, United Airlines said it was cutting service to 11 small airports, including Killeen-Fort Hood and Easterwood Airport in College Station, both in Texas. Killeen-Fort Hood and College Station are also serviced by American Airlines, leaving one air carrier at the airports that previously had two.
For cities such as Stillwater, American Airlines is the only option for travelers and college students not wanting to drive two hours or more to Oklahoma City or Tulsa to catch a flight.
The deal means the local government and the university will cover any revenue short of $4 million, starting this June and ending at the end of 2023.
It’s common for airports to extend aid to airlines to lure routes and increase service. Usually, that includes money for billboards to advertise routes or discounts on airport gate and landing fees.
In this case with a revenue guarantee, the city and university could end up paying substantially less or even nothing at all if enough passengers book flights. But it also puts the risk on the city and school, not American Airlines, which lost nearly $2 billion in 2021 and is seeing increased costs from fuel along with a shortage or regional airline pilots.
