Joplin Billed for Balance of Airline Guarantee

The city of Joplin has been billed by American Airlines for the remainder of a $600,000 revenue guarantee given to obtain flight service to Chicago.

Airport Manager Steve Stockam confirmed Tuesday that an invoice had been submitted for more than $222,000, the balance available from the guarantee made by city of Joplin and the Joplin Area Chamber of Commerce Foundation.

Chicago flights began in June. The first invoice for a payment under the agreement was received by the city in November. It was for about $377,000.

The agreement limited the revenue-guarantee payments to the first year of flight service.

Mayor Gary Shaw said Tuesday that he had not yet had an opportunity to review a notification sent to him from city staff that the payment was sought. He said he will look into it but that if the amount falls within the $600,000, the agreement would require the payment.

He said that American Airlines had to spend a large amount of money to offer the flights.

The first bill came in at more than city and chamber officials expected,they said. After that, the airport's consultant, Mike Mooney of Volaire Aviation Consulting, attended a City Council meeting to talk about the status of Joplin’s air service to both Dallas and Chicago.

Mooney told the Globe then that the airline likely would ask for the entire amount of the revenue guarantee before the agreement expires because the airline spent $20 million to set up the Chicago service for Joplin.

Stockam previously said a revenue guarantee is standard in the industry to provide service to smaller airports.

The city agreed to provide two-thirds of the guarantee amount, $400,000, from the city's half-cent transportation sales tax fund and the Convention and Visitors Bureau 4% lodging tax.

Businesses through the chamber foundation agreed to cover $200,000.

The city paid out more than $251,000 for its share of the first bill, and the chamber paid nearly $126,000.

Toby Teeter, chamber president, could not be reached late Tuesday for comment on the new bill.

After the first bill, Teeter said: "The business community views the revenue guarantee as an investment in a sustainable Chicago connection to the world. Yes, we’re disappointed by the amount of minimum revenue guarantee to be redeemed. But we remain confident that Chicago air service will continue to serve our community for years to come."

The Chicago service was important to business because it provides connections to the East Coast and worldwide destinations, the airport manager has previously said.

Fares only fully count toward Joplin's revenue guarantee for passengers whose destination is solely Chicago. Revenue from destinations beyond Chicago do not count because other cities get credit for the portions of the fare to their airports, city officials have said.

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