City of Joplin to pay American Airlines 377 thousand for Chicago flights
Management: Just under break even threshold
JOPLIN, Mo. — Like many others during the holidays, the Oskin family flew into Joplin to visit family.
“I lived in Webb City until I was in the fourth grade. We have family in Grove and Joplin too,” says Jenna Oskin.
They usually make the trek from Chicago by car, but this time was a little easier.
“”This is the first time we’ve flown direct. And the first time with kids. It was perfect. Yeah, we might not have done it if it wasn’t direct,” say Jeff and Jenna Oskin.
Since starting in June, the Chicago flight service at Joplin Regional Airport has helped thousands of people just like the Oskins.
“”We’ve done over 10-thousand passengers per month in the last three months in a row, and it’s been almost forty years since we’ve had those kinds of numbers,” explains airport manager Steve Stockam.
Numbers that are estimated to have brought nearly a million dollars in revenue to the city.
So, why is the city paying American Airlines 377 thousand dollars?
In January, the city entered a minimum revenue guarantee, where if the revenue from Chicago flights doesn’t cover American’s costs for the first year, the city would have to pay them up to 600-thousand dollars to make up the difference.
“The break-even number for that, which is called load factor, was about 75 percent. And so we’ve been typically between 70 and 74-percent,” explains Stockam. “So that in combination with the amount of revenue that goes with how those tickets are sold is where we saw the deficit that came up.”
Stockam says city officials expected to have to pay something.
And they are now working on a way to get more people in Southwest Missouri to use their flights.
“Last year, there were about 830 thousand tickets sold in that area, and we’re only capturing about nine percent of that. So we need to do a better job of capturing those tickets that are being sold within our own area,” says Stockam. “But then we also need to be making sure that those people that are coming into this area have the understanding and the ability to know what’s available in Joplin.”
The fee will be paid through the transportation sales tax, the Convention and Visitors Burea fund, and the Joplin Chamber of Commerce.
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