Revenue program for expanded air service in Missoula ready for takeoff
By Martin Kidston
An effort to generate revenue to entice expanded air service to Missoula has gained momentum over the past few months, with dozens of area businesses contributing incentive packages ranging from resort excursions to guided outings on local rivers.
Now, the Missoula Economic Partnership will hit the streets in effort to sell the deals to help the city raise money and compete for enhanced air service. Proponents believe the outcome will drive down local airfares, help businesses' bottom line and bring new visitors to Missoula.
“We want more direct flights to major hubs across the U.S.,” said Jenn Ewan, vice president of MEP. “The business traveler will see a price reduction if they book enough in advance with the airline. That will force competition to drop prices. But we really want to focus on the tourism aspect, getting people here.”
Last year, MEP joined local business leaders and the Missoula County Airport Authority in forming the Air Service Task Force, a volunteer group that set out to examine the revenue models used in nearly a dozen U.S. Cities.
After the study, the task force settled upon a successful model used in Jackson Hole, Wyoming. The program calls upon local businesses to donate an incentive package, from dining deals to outdoor adventure. The packages are then sold to businesses that apply them toward a range of uses, from corporate retreats to investor rewards.
The money generated goes toward building a pool of funds to match federal aviation grants or entice airlines to expand local service.
“Their takeaway is, the business receives one of those packages that fits into a specific financial tier,” said Paige Pavalone, a contractor working on the effort for MEP. “People that kick in the incentive packages, their takeaway is that we (MEP) offer a marketing and social-media strategy for them, to offer that intermediate promotion.”
Airport officials have said that airlines are asking communities to share the risk when entering new markets. Landing new air service has grown increasingly competitive, and other cities have already established revenue models to sweeten the deal.
In January, American Airlines began nonstop service between Bozeman and Dallas/Forth Worth after receiving a revenue guarantee to cover any loss to the airline if it didn’t fill seats. The new route was backed by a $650,000 Small Community Air Service Development grant – one matched by support from Big Sky-area resorts and the Bozeman Chamber of Commerce.
“Everyone takes a swing at that grant every single year and different cities throughout the country are in competition for it,” said Pavalone. “The bigger we can build that insurance policy – that cushion of money – the stronger the likelihood is that they'll look at us. It shows we have a lot of community support from financial investors.”
Expanded air service has been identified as a key to economic growth in Missoula. Ewan said MEP is often engaged in negotiations with national companies that are considering Missoula as a base of operation.
But as things currently stand – and when given another option – Missoula tends to lose out due to the cost of air service and the city's lack of direct connections.
“The cost of air service is so significantly higher than it is flying into the East Coast, so it kind of cuts us out of that equation,” Ewan said. “We lose in that space. If we have more direct flights to major hubs, it would enhance our opportunities.”
Ewan said the list of companies contributing incentive packages grows by the week. Those on board include Lewis and Clark Rafting Adventures, the Montana Distillery and the Missoula Winery, among others.
Area resorts have also signed on with incentive packages, including Paws Up, Triple Creek Ranch, the Ranch at Rock Creek, Tin Cup Lodge and Holland Lake Lodge. Discovery Ski Area has offered multiple package deals to be sold toward a revenue guarantee.
The task force is looking to raise $500,000 this year.
Cris Jensen, director of Missoula International Airport and a member of the Air Service Task Force in Missoula, said the support has been strong.
“I'm pleasantly surprised by how people received and grasped this concept,” he said. “I thought this might be a tough sell, but it's not. People absolutely understand it.”
Contact reporter Martin Kidston at email@example.com