The federal grant that Evansville Regional Airport officials want to use to launch daily flights to Indianapolis has been extended, and local officials are talking with a Montana-based airline about providing the service.

Nelson Bailes, marketing director for the airport, said the U.S. Department of Transportation (DOT), which administers the grant, has agreed to extend the grant until Dec. 31, 2008. The grant otherwise would have expired Sunday.

But the DOT officials have also said that unless Evansville and South Bend officials have another airline willing to start the intrastate service flights on hand by Sept. 24 it will withdraw the grant.

Bailes said that does not mean the intrastate service would have to start by Sept. 24, but by that date an airline would need to be working with airport officials toward starting the service.

Evansville airport officials have been interested in launching flights to Indianapolis since US Airways discontinued those flights after the September 2001 terrorist attacks.

They combined with South Bend airport officials, who seek to introduce South Bend to Indianapolis flights, in acquiring a $1 million federal grant to launch the intrastate airline. Both airports have also contributed $500,000 to help defray start-up costs on an airline they expect to become profitable.

About $500,000 of the total $2 million in start-up money was spent when ATA Airlines operated the intrastate airline for 75 days in early 2006. ATA discontinued that service, however, when it filed for bankruptcy.

Bailes also Tuesday said that airport officials have recently talked with representatives of Big Sky Airlines of Billings, Mont. - an airline that works with US Airways, Delta and Northwest Airlines to serve smaller cities.

Big Sky is interested in operating the intrastate airline, but would become more interested if the company had other flights in this region - something officials are looking into, Bailes said.

"The better they can utilize their aircraft, the more profitable it becomes for them and us," he said.

Bailes said airport officials, which at one time were talking with US Airways about starting the intrastate airline, are now more interested in having US Airways provide flights between Evansville and the US Airways hub in Charlotte, N.C.

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