CHEYENNE – Air service is returning to Cheyenne, and the new connecting flight to Denver comes with a lower minimum revenue guarantee, which is a subsidy paid to the airline until the flight becomes self-sustaining.
The minimum revenue guarantee for SkyWest Airlines, paid by the Cheyenne Regional Air Focus Team, is $883,000 for the first year of air service, which includes $150,000 from both the city and county and $528,000 from the state of Wyoming.
Comparatively, the most recent minimum revenue guarantee for flights to Dallas was $1.995 million and the request from the city and county was $624,000 each. CRAFT Director Wendy Volk said the connecting flight is the best decision for the time being, given the financial downturn caused by COVID-19.
“This is a much more palatable price point for a minimum revenue guarantee. I think once we get in a different economic environment, by all means, we can go back to looking at additional hubs, like Dallas or wherever makes most sense,” Volk said Monday.
When the city and county were going through their budgeting processes in the spring, CRAFT asked each entity to budget $260,000 for a new minimum revenue guarantee, although no specific flights had been identified at that time. After Wyoming’s capital city lost its only flight in early April, Volk wanted CRAFT to have the funds ready if a new air service opportunity arose.
“We came in below what the city and county put in their budget, and we feel really very positive about that,” Volk said.
According to Volk, securing the connecting flight was also a smart move in terms of protecting the taxpayers' money.
If Cheyenne Regional Airport doesn’t reach 10,000 enplanements a year, it will lose $1 million in funding from the Federal Aviation Administration for maintaining the airport. Looking at data from similar flights, Volk said they should easily reach that goal with the new air service to Denver.
"That magic number of 10,000 enplanements is always something in the back of our mind," she said.
This story originally appeared online at WyomingNews.com and on the WyoNews app at 5 a.m. Tuesday, Aug. 18.
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