City Agreement Calls for $600,000 Revenue Guarantee to United Airlines

Mar 3, 2017

Credit KBIA

  COLUMBIA — A proposed agreement with United Airlines calls for the city to provide a $600,000 one-year revenue guarantee on flights to and from Denver International Airport.

United Airlines on Monday announced new flights to and from Denver and Chicago starting Aug. 1. The revenue guarantee would ensure that it makes at least $600,000 on its flights to and from Denver for the first year, according to a memo to the Columbia City Council.

The city and Columbia Chamber of Commerce will try to raise money to cover the guarantee from private donors and community partnerships. It would fall to the city, however, to cover any shortfalls.

The revenue guarantee is far less than the $3 million, two-year guarantee it initially made to American Airlines for its flights to and from Chicago and Dallas/Fort Worth in 2012.

The city in February 2015 returned 80 percent of the money that investors — including Boone County, Cole County, Jefferson City and MU — contributed to the American Airlines guarantee fund. American required just one payment of $22,562 in March 2013 to compensate for low passenger numbers on two weeks of flights.

The city retained the other 20 percent of the money in the fund to continue a revenue guarantee on American's second daily flight to and from Chicago.

 

The city's agreement with United also includes a waiver of landing and rental fees at Columbia Regional Airport in the amount of $125,000. The city also would provide $250,000 worth of marketing for United's Denver flights.

In addition to the new flight services, the city of Columbia hopes to increase the economic impact in mid-Missouri, given that a larger terminal is scheduled to be constructed starting within 2017.

The United agreement will be introduced for first reading at the Columbia City Council's regular meeting on Monday and is scheduled for a final vote at the council's March 20 meeting.