The Air Service Challenge

As small airports struggle to attract airline service, the success of St. Cloud Regional Airport showcases why smaller communities need air-service too

Air service in the United States has become very interesting in recent years. Delta and Northwest Airlines merged forming a larger carrier in 2008. Following that there was a roller coaster of other mergers occurring throughout the years: Frontier/Midwest, Southwest/AirTran, United/Continental and soon the possibility of the New American. This activity has definitely taken its toll on the U.S. aviation industry and smaller communities in particular.

Newly merged airlines concentrate efforts on cost control and being competitive, and they have a tendency to cut flights in smaller markets. Because smaller aircraft are more costly to operate and oil prices continue to rise, these new airlines are often forced to trim their fleet of smaller aircraft, which are heavily used in smaller markets.

St. Cloud, Minn., is a good example of a community impacted by mergers. This college town of around 60,000 people is a 1 1/2-hour drive from the Twin Cities. For more than 15 years, the St. Cloud Regional Airport was serviced by Northwest Airlines. The carrier averaged five flights a day through St. Cloud, typically on a Saab 340 propeller plane. The aircraft had 34 seats and the flights were connecting through Minneapolis where the airline had its largest hub.

But when Delta Airlines and Northwest merged, it changed everything. Airport Director Bill Towle states, “Following the merger, the new Delta had a different business plan. Air service to smaller communities was no longer part of the plan.” Therefore St. Cloud was cut from the carrier’s route map—leaving the airport without an air carrier.


Band Together

With the loss of its main carrier, it was essential that the airport and the city work together to bring service back to the growing community.

The airport performed a passenger-demand analysis study and attended air service conferences to establish relationships with airlines. Through these efforts, the City of St. Cloud and the airport identified a need for flights to Chicago O’Hare International Airport. The airport is currently pursuing a major carrier to provide this air service.

The airport also applied for and received a $750,000 Small Community Air Service Grant in 2011. Plans are to use this grant to offset the loss an airline would incur when starting new airline service in St. Cloud. It is hoped that these funds will help the airport attract airline service by reducing or eliminating an airline’s risk. The funds come with a couple caveats, however. The airport has just three years to use them, and it must be used specifically to obtain air service to O’Hare.

The city and the Greater St. Cloud Development Corporation have also teamed up to start a Travel Bank, designed to get area businesses to pledge to fly out of St. Cloud if an airline offers service to Chicago. To date, this partnership has been a huge success. The Travel Bank hoped to receive $5 million in pledges but it received well over $6 million, according to Towle.

“The collaborative effort between the business community and the region in general shows we want air service. What businesses committed in pledges is a guarantee of only a portion of their travel budgets,” he explains.“With the installation of reliable, cost-effective service, much more could be expected.”

The airport’s terminal also has been remodeled to attract air service. This renovation included expanding the terminal’s gate hold area, so that if two airlines were flying at the same time, there would be enough seating for passengers. Rental car counters and a baggage claim area were also added.


Land a Launch

While attaining service to Chicago is a primary need, the airport did not limit its talks to just major carriers. In 2012, the airport successfully landed low-cost carrier Allegiant Airlines, which offers two flights weekly to Phoenix-Mesa Airport. According to Micah Lillard, public relations specialist at Allegiant, “St. Cloud has been a great route for us. We were happy to offer a convenient, low-cost option for residents headed to the Phoenix area.”

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