- Stillwater, Oklahoma and Oklahoma State University are paying American Airlines $4 million to continue flying to the city.
- The airline is the sole operator of the airport and risks losing air service altogether without funding.
- Some airports benefit from the government’s Essential Air Service program which ensures that they always have air service.
A small town in Oklahoma and its local university are paying $4 million over two years to allow American Airlines to fly daily to the city.
Dallas-based American Airlines began flying to Stillwater Regional Airport in Oklahoma in 2016 but recently planned to back down due to unprofitability. However, on Monday, the Stillwater City Council approved a joint agreement between the city and Oklahoma State University to keep the service afloat, according to Stillwater News Press.
Currently, American is the only airport serving the cityoffering service to Dallas/Fort Worth through its wholly owned subsidiary, Envoy Air.
“We are proud to continue to serve Stillwater and provide the local community with access to our global network,” American told Insider in an email statement confirming the agreement.
The OSU and the city each plan to contribute $500,000 for the first half of 2022 to keep the airline operating, according to Stillwater News Press. Then the entities will each contribute $1 million for the 2022-2023 fiscal year, which begins July 1, 2022, and an additional $500,000 for the second half of 2023.
According to a memorandum of understanding approved by the OSU board of trustees in January, the university agreed to enter into the deal because the city would not be able to provide sufficient revenue security on its own.
Airport manager Paul Priegel said in a January meeting with city council that the allocated funding will help the city continue to develop its aviation sector. According to Priegel, for every 10,000 people who board a plane at Stillwater, the airport will receive $1 million to invest in improvement projects, such as better infrastructure.
Although Stillwater was on the verge of losing commercial service, Priegel explained during the meeting that the airport was actually thriving before the pandemic.
“We had seen substantial growth and were getting bigger and more frequent planes,” he said.
While Stillwater funds a second life, this is not the reality for other small airports. Instead, high fuel prices, weak demand and pilot shortages have caused major airlines, like United and Delta, to suspend operations to those communities indefinitely, citing unprofitability as the main factor.
Henry Harteveldt, travel analyst and president of Atmosphere Research Group, told Insider that airlines do not have a civic responsibility to continue serving unsustainable markets.
“Following the most financially brutal 18 months the global airline industry has seen due to the COVID pandemic, airlines will seek deals that they believe will give them an edge, but if a city is not profitable, they will cut it,” he explained.
Despite the threat of losing air service entirely, several airports are benefiting from government aid Essential Air Service (EAS) Program. The program ensures that some small communities do not lose air connections to the rest of the country, although Stillwater is not one of them.
One EAS town losing its only air service is Ogdensburg, New York, located on the border with Canada. SkyWest’s United Express flight will end in 2022 after giving 90 days notice of departure in January, according to local news channel WWNY.
SkyWest is bound to stay on until a new operator is in place, WWNY reported. However, as Ogdensburg is an EAS airport, two airlines have requested to resume operations, including Boutique Air and Air Charter Express, according to the Ministry of Transport.
However, not all airports are eligible for EAS, leaving some cities without any operator. Williamsport Regional Airport lost commercial air service in 2021 when American Airlines pulled out after the federal payroll support program ended, reported the Philadelphia Inquirer.