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Air service grant OKd by city to get revenue guarantee

Jan 10, 2018 By Alejandra Silva, Staff Writer

The city of Riverton hopes to lock in grant funding once again to help pay for the minimum revenue guarantee needed to keep Denver Air Connection at the Riverton Regional Airport.

The city council on Tuesday approved a grant application -- drafted by city staff and the Fremont Air Service Team -- for Wyoming's Air Service Enhancement Program.

In the application, Riverton has signaled its intent to contract with DAC for another fiscal year.

FAST and Sheridan's Critical Air Service Team recently reviewed new proposals from DAC and SkyWest Airlines for providing air service at the Riverton and Sheridan airports.

FAST chair Missy White explained that, in order to fully submit the ASEP grant application, the city must detail the contract that's in place with the airline carrier.

Application

FAST is getting a head start on the fiscal year 2019 ASEP grant application to "ensure a seamless transition of ticket sales for summer travel," public works director Kyle Butterfield reported.

Summer travel typically produces the highest level of revenue for air service providers, he said.

The applications are also reviewed at the state's January business meeting.

FAST and CAST plan to use the model supplied by DAC as the basis for their fiscal year 2019 ASEP grant application, Butterfield said.

The ASEP application requires a percentage of matching funds from the community. The City of Lander and Fremont County Commissioners helped the City of Riverton with the local match portion of 40 percent while the state covered 60 percent of the total costs.

Since July 2016, the city has been responsible for providing a roughly $2 million MRG each year to ensure DAC breaks even. The ASEP grant, established by the Wyoming Legislature in 2004, was awarded to the city in the last two years in the amount of $1.1 million for 2016 and roughly the same for 2017.

Butterfield noted that a study showed that every dollar invested from the program brought an average return of $23.28 of economic benefit to the participating communities.

"We hope to continue that progress," Butterfield said.

Smaller guarantee

Renegotiations have allowed DAC to drop its MRG by 46 percent, White said, meaning the local entities would have to put down less money.

She said the company "worked really hard in bringing down the MRG."

"It's quite substantial," she said. "They're able to do that by renegotiating some of their insurance contracts...They have a different arrangement with their instrumentation provider, and they've also adjusted some of their plane coverage, so between those things they've been able to decrease the price substantially."

Although the total expected MRG is now estimated at almost $1 million for 2018, FAST and CAST would still like to receive that 60 percent match from the state, White said, referring to the ASEP grant.

Increase capacity

While FAST reviewed the proposals from DAC and SkyWest, White said DAC shared plans to increase capacity. In DAC's proposal, the company says it would like to maintain Riverton's morning flight that connects to Sheridan but add a midday flight that flies straight to Denver and back. Sheridan also would have a midday flight straight to Denver and back.

"So both of our communities would grow in capacity," White said. "Which also makes it that much more likely that we hit that magic 10,000-enplanement threshold."

The enplanements benchmark determines whether the airport receives $1 million in federal grant funding.

White noted that, before Great Lakes Airlines pulled out of Riverton late last year, enplanement numbers had dropped consistently, but the passenger totals have since risen. She told the council Riverton is back to doubling enplanement numbers at the airport; the city is also exceeding the goals set by Forecast, the company that monitors and sets ticket prices.

White said FAST reviewed the proposals from DAC and SkyWest based on the financial impact, capacity number and reliability of service.

Supporters

FAST thanked the Riverton and Lander councils and county commissioners for taking a "leap of faith" and allowing the group to pursue better air service for Riverton.

"Two years ago when we first came up here things were looking pretty dire for air service," White said. "It's all the more commendable that folks were able to make that mind shift. ... Had the council not been proactive we would likely be without air service right now in Fremont County."

It took an understanding of where air service was headed to really make that shift, she added.

White said financial support from the ASEP grant and the Small Community Air Service Development Program allowed for DAC to operate in Riverton. She also pointed to local funding in addition to the support from the Riverton and Lander chambers of commerce, the Eastern Shoshone and Arapaho tribes, the Wind River Job Corps, SageWest Health Care, Wind River Hotel and Casino, Central Wyoming College, Wind River Visitors Center and IDEA, Inc.

"We also developed significant community buy-in and support from these and many other entities in the area," she said. "Truly, this is a team effort to obtain and maintain air service in Fremont County."

Thanks to DAC, White said Riverton is able to have more local control over ticket fares while also helping to offer he Jump On Board rewards loyalty program.

"Folks in Casper don't have that ability," White said.

Riverton also offers a bereavement fare program and a child discount fare program.

She mentioned that pre-screening with the Transportation Security Administration is happening in Riverton and doesn't have to be repeated in Denver before passengers board connecting flights.

DAC is currently seeking a partnership that will create a code-share agreement and allow their flights to appear on booking websites, she added.

"That's a great development they're continuing to work on," she said.

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