SHERIDAN — Representatives from the Sheridan and Johnson counties Critical Air Service Team told Sheridan City Council Monday that while the short-term outlook for local air service is positive, its long-term future is still up in the air.
CAST Administrator Renee Obermueller and CAST Vice President John Stopka said the local service’s revenue has begun to stabilize after a rocky year, but whether that service will remain in place through another year will depend on a state program that is still taking shape.
In January, CAST warned council that an industry-wide surge in fuel prices had increased Denver Air Connection’s operating costs above what it estimated and could lead CAST to ask the city for more air service funding this year.
But Monday, Obermueller told council that the DAC’s interline agreement with United Airlines brought in $112,000 in revenue between Feb. 10, when it took effect, and May 11.
That boost in revenue means CAST likely will not ask for additional funding this year, Obermueller said.
“For fiscal year 2019, our estimates are shaking out real close to what we anticipated,” Obermueller said. “We still have June to fly, but June is always a good month for us.”
In fiscal year 2020, Obermueller said CAST was estimating that Sheridan and Sheridan County’s contributions to the DAC’s minimum revenue guarantee would increase from $250,000 to $350,000 because it plans on offering more flights. The city uses revenues from the Optional One-Cent Sales Tax to contribute to the MRG and would have to include that increase in its budget for fiscal year 2020.
Though CAST’s current contract with the DAC is scheduled to expire June 30, it has already negotiated a contract extension that ensures the service will continue operating out of the Sheridan County Airport through Jan. 11, 2020.
Whether CAST continues with DAC beyond that date will depend on whether it chooses to participate in a state air service program that will develop over the next month.
In 2018, Wyoming’s Legislature allocated $15 million for the creation of the Commercial Air Service Improvement Council to develop a strategy for improving air service at critical airports throughout the state. The council chose to pursue a capacity purchase agreement, with the intention of leveraging the combined purchasing power of critical air service communities to secure a favorable agreement with an air service provider.
In April, the state announced it was negotiating a contract with SkyWest Airlines.
The state will need to finalize a contract with SkyWest by June 30 or $3 million of the $15 million that the Legislature allocated to the Commercial Air Service Improvement Council will revert to the Air Service Enhancement Program, which has subsidized several communities’ current air service agreements.
Obermueller said the state intends to sign a contract with SkyWest before that deadline, but that contract will likely be contingent on all of the communities that bundled into the proposed capacity purchase agreement — Rock Springs, Gillette, Sheridan and Riverton — signing a memorandum of understanding indicating they will participate in the capacity purchase agreement.
If the state does finalize that contract, CAST will have a decision to make.
Obermueller said the finalized contract would include specific details SkyWest’s service and allow local officials to compare that service with what the DAC currently offers.
CAST is scheduled to hold a community air service discussion with SkyWest 4 p.m. Tuesday at the Sheridan County Courthouse.