City pays nothing to American Airlines from revenue guarantee in March

Monday, April 22, 2013 | 5:09 p.m. CDT; updated 10:08 p.m. CDT, Monday, April 22, 2013

COLUMBIA — During the month of March, American Airlines sought no money from the revenue guarantee established by the city to reimburse the airline if profits from its flights between Columbia Regional Airport and Chicago and Dallas fell short.

Will Livsey, regional manager of business development for the airline, said in a news release from the city that "load factors and yield on American Airlines flights" to Dallas-Fort Worth and Chicago O'Hare airports remain high.

City officials also said they were happy with the situation.

"This is excellent news, which validates all of the market demand studies on which we based our decision-making process," City Manager Mike Matthes said. "This is no guarantee of future success but a very hopeful indication that we will have a long and fruitful relationship with American Airlines."

The news came on the heels of a report earlier this month that American had tapped the revenue guarantee for $22,000 as reimbursement for lower than anticipated profits during its two weeks of flights in February, according to a previous Missourian report. Two major snowstorms might have contributed to smaller passenger numbers during that time.

American is entitled to money from the guarantee if each flight to or from Chicago fails to bring in at least $4,403 or if each flight to or from Dallas-Fort Worth fails to bring in at least $5,012.

Under its agreement with the city, American can receive no more than $1.5 million in revenue guarantee reimbursements in each of its first two years of flight service to and from Columbia Regional Airport.

Money for the guarantee came from the city of Columbia, Jefferson City, Cole County, Fulton, MU, the Columbia Chamber of Commerce and various businesses.

Supervising editor is Scott Swafford.

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