The City of Columbia Makes First Payout to American Airlines
COLUMBIA - The city of Columbia announced unfilled seats on American Airlines means it will cut a check to the airline for $22,562. The payment is part of a revenue fund guarantee. This is the first payout for American Airlines since it began flying out of Columbia Regional Airport on Feb. 14. The city guaranteed the airline will make at least $5,012 for each flight to Dallas and $4,403 for each flight to Chicago. The city is in agreeance with American Airlines to pay the difference if the quota is not met. Greg Cecil, Chairman of the Columbia Regional Airport Advisory Board said there is only one way to cut the cost of the revenue fund.
"We don't want to have to pay anymore money [from the revenue fund] and if we fill the planes we won't have to," said Cecil.
The agreement is for two-years and guarantees American Airlines $3 million in revenue. Cecil thinks the revenue fund will pay off in the long run.
"Hopefully we can offer air service out of Columbia to destinations people want to get to and at a competitive price," said Cecil.
He said it is difficult for a small city like Columbia to get a major airline like American Airlines to fly out. The revenue fund ensures people from the area have travel options. The city of Columbia put the revenue guarantee model in place to look like a model Manhattan, Kan. had in 2009.