Riverton inks new deal with Denver Air ConnectionFeb 15, 2017 By Alejandra Silva, Staff Writer
The Riverton City Council has renewed its contract with Denver Air Connection for another year, which will ensure the airline keeps serving Fremont County's only commercial airport through 2018.
The airline began its current one-year contract July 1 after negotiations with the Fremont Air Service Team, a private task force created by the city to supplement the service provided by Great Lakes Airlines, which saw enplanements drop in recent years amid price increases and a decline in reliability. Denver Air flies a 30-passenger jet airliner from Riverton to Denver and Sheridan.
FAST requested the renewal Tuesday at a special meeting of the city council in order to get rolling with summer ticket sales.
"Part of us doing that now, fairly early in the year, is we are not able to advertise flights and the seats on the flights without a contract in place," said Missy White, who chairs the task force.
The existing contract with DAC runs until June 30, and FAST already is working with Sheridan County Airport and DAC to secure the details of the new contract, said public works director Kyle Butterfield.
The second-year contract will the same as the first, except for an amendment with a few changes. First, instead of requiring a minimum of 13 flights per week, the contract will now require an average of 13 round trip flights to be available per week at the Riverton airport.
"The reason behind this change is to allow Riverton and Sheridan County Airport to alter the typical weekly schedule and offer more flights on days that will produce higher levels of revenue," Butterfield said, noting holidays and weekends as instances with higher levels of flights are scheduled. The second updated a reference in "Exhibit B," which addressed the schedule and operational models for the first year of service. Now it will simply represent the models of the second year of service, Butterfield said.
The financial obligation for the minimum revenue guarantee -- which supports the commercial air service -- will also be slightly reversed. Butterfield said the MRG is calculated by subtracting the difference of the cost to operate an air service route against the projected revenues for that route and is a way to cover an airline's risk when operating a new or unproven air service route.
"Should sales produce revenues that exceed the projected revenues for the route, then payment required for the MRG is reduced," Butterfield's report read.
The contract now states an MRG obligation of roughly $3.7 million, as opposed to the $3.9 million in the current contract. The Riverton and Sheridan airports will continue to have to pay their 50/50 share. Riverton will have to pay roughly $1.8 million.
After applying for the Air Service Enhancement Program, the Wyoming Aeronautics Commission on Jan. 10 awarded about $1.1 million to FAST for the second year of service with DAC.
About $208,000 will carry over from the existing contract year and be applied to the new MRG obligation. Roughly $547,000 will be left to be covered by sources in Fremont County.
"We are aware of the need to find additional funding partners for the minimum revenue guarantee," White told the city council.
Last year, Riverton allocated $200,000 for the first contract year and this year plans to set aside another $200,000 in their fiscal year 2017-2018 budget. The City of Lander and Fremont County Government also contributed in the first year.
Business at the airport has changed since the first time FAST came before the council with big ideas for the airport, White said.
"What a difference a year makes," she said. "A year ago when we came before you, we weren't sure if we were going to have air service in Fremont County... It's quite delightful to now, be here in front of you and say that we had a really successful year."
White gave the council an update on enplanements and said they were "happily reversing" a trend. In 2014, the airport saw fewer than 4,000 passengers boarding per year.
Service at the airport was "spiraling downward" when Great Lakes was dealing with cancelations mostly due to a shortage of pilots after new federal pilot requirements were implemented.
Great Lakes attempted to reassure the council that service would get better, but that didn't happen, White said.
With the arrival of Denver Air, passenger numbers doubled in a "fairly short time," White said. She noted that while air travel declines in January, industrywide, after the holiday season, that didn't happen at Riverton Regional.
"We saw very little (decrease). It actually stayed well about the previous months," White said. "It's exactly the way we want to be seeing things."
She credited the "impeccable" reliability of DAC, the return of screenings by the Transportation Security Administration, a fast pre-check option, a new website to schedule flights, and a better gate at the Denver International Airport.
People are also aware that the airport has new, improved service, she added.
"The flying public is knowing it, people are believing," she said. "Which was one of our early concerns."
Great Lakes also has improved its service as well in recent months. The airline now offers a "code share" arrangement with United Airlines as Denver International Airport.
Officials are keeping a close eye on bookings. The goal is to get to 10,000 enplanements, which Riverton Regional used to do with regularity. Reaching that number ensures $1 million in annual federal funding instead. $150,000. The money goes toward funding airport improvement projects.
"That seems likely to happen," she said of the 10,000 boarding mark this year.
FAST is also working with DAC to develop a frequent-flyer program that would provide discounts or coupons after booking a certain number of flights with DAC.