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Columbia airline guarantee fund makes first payout

Columbia airline guarantee fund makes first payout

April 8th, 2013 in News

COLUMBIA, Mo. (AP) - The city of Columbia paid $22,562 to American Airlines after the airline's first two weeks at Columbia Regional Airport as part of an arrangement that guaranteed the airline revenue when it agreed to start service there.

The payout was expected as the airline adjusts to its new market and because heavy snow hit the city on Feb. 21 and 26, said John Blattel, director of the city's Finance Department. The airline began service in Columbia on Feb. 14.

A two-year, $3 million revenue fund was set up to persuade American to provide service from Columbia to Chicago O'Hare International Airport and Dallas/Forth Worth International Airport, The Columbia Daily Tribune ( ).

The fund includes $1.8 million from Columbia, $600,000 of which came from private investors. Boone County and the University of Missouri each contributed $500,000, and Jefferson City and Cole County each gave $100,000.

The city pays American when flights on its 50-seat American Eagle commuter jets have fewer than 32 seats filled. American is guaranteed to make at least $5,012 on each flight to Dallas and $4,403 on each trip to Chicago.

In the first two weeks of service, only three flights had fewer than 30 passengers, Blattel said.

Blattel said the city also pays a fuel adjustment charge when the price of jet fuel exceeds $3.30 per gallon, but he said that made up a "very small" part of the payment to American.


Information from: Columbia Daily Tribune,