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$2.4 million could be returned to flight investors

Thursday, September 4, 2014 | 6:00 a.m. CDT; updated 6:41 p.m. CDT, Thursday, September 4, 2014

COLUMBIA – Flights to Chicago and Dallas from Columbia Regional Airport have been profitable for 17 consecutive months, which means those who contributed to a revenue guarantee fund that helped bring the airline to town might get most of their money back.

American Airlines, which started three flights in February 2013, hasn't tapped into its $3 million guarantee fund since March 2013. The fund was set up to ensure the profitability of one daily flight to and from Chicago O’Hare International Airport and two daily flights to and from Dallas/Fort Worth International Airport.

The fund was established by the following contributions:

  • The city of Columbia: $1.2 million
  • Jefferson City: $100,000
  • Boone County: $500,000
  • MU: $500,000
  • Cole County: $100,000
  • Private businesses, including Ameren Missouri and Boone County National Bank: $600,000

Since the fund was started, only one payment has been made. In March 2013, the fund paid $22,562 to American Airlines to compensate for relatively low passenger numbers on the first two weeks of flights.

The fund has accumulated about 1.6 percent interest in fiscal year 2014. At the end of July, the balance was $3,081,530.

City Manager Mike Matthes said that in February 2015, 80 percent of the fund and interest will be returned to contributors if the flights continue to be profitable and they choose to get their money back. The remaining 20 percent will continue to act as a guarantee for the second Chicago flight that was added in April.

“They are all very happy with the performance that we haven’t had to use the fund,” Matthes said. “Most of them didn’t expect to get the money back. … They went in knowing that we might have to use it.”

Matthes said the passenger demand analysis for this year will be available for the public in a couple of weeks. According to the analysis, the top three flight destinations from Columbia are Orlando, Fla., Phoenix and Dallas.

In February 2015, contributors will be able to choose whether to withdraw their investment with interest or leave it to support potential new flights.

Public Works Department spokesman Steven Sapp said passenger loads on American's 50-passenger regional jets have remained high, even after the addition of the second flight to Chicago in April. 

"Most airlines consider things are going pretty well when they can be in a load of 70 percent,” Sapp said. “We are averaging somewhere between 83 to 84 percent over the past year. That’s extremely good.”

MU senior Laura Mikytuck takes an American Airlines flight to her hometown, Dallas, every semester. Mikytuck said that though ticket prices can be cheaper at airports farther away, she prefers flying from Columbia. Round-trip tickets usually cost about $300.

“It’s more expensive,” Mikytuck said. “But they have free parking, and it’s just a 20-minute drive.”

Mikytuck said a trip to Dallas takes around 1.5 hours and the service on the plane is satisfying. She's not a big fan of the schedule, though. One flight leaves Columbia at 6:45 a.m., and the other at 2:35 p.m.

Supervising editor is Scott Swafford.


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