City Council to discuss American Airlines agreement

Monday, October 15, 2012 | 12:03 p.m. CDT; updated 7:12 a.m. CDT, Tuesday, October 16, 2012

COLUMBIA — American Airlines is asking for more than guaranteed revenue from the city of Columbia in exchange for providing daily flights to and from Chicago and Dallas-Fort Worth. It also wants to protect itself from the possibility of rising jet fuel prices, save money on landing and facility fees and ensure a minimum level of advertising for the flights.

Proposed agreements that would make the flights a reality will be up for discussion at the Columbia City Council's Monday night meeting. The agreements are broken down into four separate ordinances. They include the following details:

If you go

The Columbia City Council's regular meeting begins at 7 p.m. Monday in the council chambers of the Daniel Boone City Building, 701 E. Broadway.

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  • The city would guarantee American Airlines average revenue of $5,012 per Dallas flight and $4,403 per Chicago flight. If the airline's monthly average revenue falls below those amounts, the city would compensate it from the guarantee fund.
  • If the average price of jet fuel rises above $3.30 per gallon, the city would compensate the airline for increased costs. If the average price falls below $3.20 per gallon, the airline would provide the city with credits reflecting the lower costs.
  •  The city would exempt the airline from landing fees and facility rental costs of up to $250,000.
  • Zimmer Radio, which owns several area radio stations and is a local advertising agency, would agree to provide $150,000 worth of advertising per year for the airport, while the city would pay for $50,000 worth of advertising per year.
  • Either party would be allowed to terminate the agreement with 90 days written notice.
  • Any money remaining in the revenue guarantee fund after the two-year guarantee period would be returned to the organizations that contributed to the fund proportionately to how much they contributed.

The Columbia Chamber of Commerce provided the Missourian with a list of 39 organizations that contributed to the revenue guarantee fund.

"It's a moving list, and we're planning on adding to it," chamber president Don Laird said. "We've taken into consideration that other firms that do business with the airport might ask for revenue guarantees."

As it stands, Delta Airlines offer daily flights to and from Atlanta-Hartsfield International Airport and Memphis International Airport. Frontier Airlines will begin offering flights to and from Orlando, Fla., on Nov. 20.

"It could happen, but I don't think it's a prominent issue," Laird said of those airlines asking for revenue guarantees. He noted that Delta's flights between Columbia and Atlanta and Memphis have been successful, operating at more than 80 percent capacity.

There is also some concern among people who worked on the revenue guarantee that jet fuel prices will rise, Laird said. According to Index Mundi, the price of jet fuel has increased from $2.68 per gallon in June to $3.19 in September.

"Fuel price is obviously an issue," Laird said. "That's why the airline asked for it to be in the contract."

Earlier this year, the city hired airline consultant Michael Boyd to recommend how to expand air service into Columbia. Boyd said he arranged a meeting between city officials and a United Airlines representative to discuss new flights to the airline's hub in Chicago.

Boyd said Columbia probably would not reach a deal with United if it adds the American flights. "Now that American's jumped in, United won't be there."

The consulting firm Mead & Hunt, of Illinois, also has advised the city on its airport this year. Ron McNeil, an employee for the firm, said the company provided city officials with data showing that most travelers in the region were driving to airports in St. Louis or Kansas City to fly out of them. The firm recommended adding service to another hub to draw more passengers to Columbia Regional and identified revenue guarantees as a "strong method" for attracting airlines.

The agreement is subject to the approval of the City Council and American Airlines.

In other action tonight, the City Council will:

  • Consider a request from 8 Ball Commercial Properties of Tipton to withdraw a proposal to rezone residential property at Grindstone Parkway and Rock Quarry Road to accommodate plans for a Break Time convenience store. Neighbors in the area submitted a protest petition to the city, which means five of the seven council members would have to favor the rezoning in order for it to pass.
  • Consider an agreement with several agencies to create “an open space/green infrastructure plan” for the city. The agreement calls on the city to chip in $40,000 for the planning effort, which would be coordinated by the Greenbelt Land Trust. Other participants would include Boone County and the state departments of conservation and natural resources The total cost of the project is estimated at $100,000 to $120,000. A report to the council from Parks and Recreation Director Mike Hood notes that the Imagine Columbia’s Future vision calls for preserving “farmland, scenic views, natural topographies, rural atmosphere, watersheds, healthy streams, native species and unique environmentally sensitive areas” throughout the city and Boone County. A parks sales tax approved by voters in 2010 also earmarked $1.5 million to acquire and preserve critical open space and natural areas.
  • Consider a six-month moratorium on illuminated window signs with electronic changeable copy. The proposed ordinance is in response to complaints about a sign placed in a window of the A.W. Smith Law Firm at the southwest corner of Broadway and Stadium Boulevard.
  • Consider an amendment to the city’s stormwater ordinance that would allow sites with at least 85 percent impervious surface to be defined as redevelopments. The move would exempt owners of such sites from complying with some recently approved changes to stormwater management regulations.

Supervising editor is Scott Swafford.

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