SHERIDAN — The Sheridan and Johnson counties Critical Air Service Team supports SkyWest Airlines’ proposal to take over as Sheridan County Airport’s commercial air service provider, CAST President Shawn Parker told Sheridan City Council Monday.
If CAST’s local partners — the city of Sheridan and Sheridan County — back the group’s recommendation, SkyWest would replace Sheridan County Airport’s current commercial air service provider, Key Lime Air — which operates as Denver Air Connection — when its current contract expires in January.
Finalizing an agreement with SkyWest would require the city of Sheridan and Sheridan County to sign memorandums of understanding indicating they will participate in a capacity purchase agreement between the state and the airline, which the Wyoming Department of Transportation’s Aeronautics Division drafted in an effort to improve commercial air service in four of the state’s critical air service communities — Sheridan, Gillette, Riverton and Rock Springs.
That agreement is contingent upon all four communities agreeing to participate.
The state is shifting resources away from the program that has historically subsidized air service in those communities, and participating in the CPA would ensure the state continues subsidizing local air service.
Parker told council that while CAST is proud of what it’s accomplished with DAC, switching to SkyWest makes more financial sense.
“We had to, as CAST members, pull ourselves out of the emotional side of our agreement with the Denver Air Connection to really look at what was good for the community,” Parker said. “I’ve loved working with the DAC guys for almost five years now…but CAST also understands that the city and the county can’t afford to go on our own. “
DAC’s offer, according to a comparison provided by WYDOT’s Aeronautics Commission, includes a $1,448,485 minimum revenue guarantee — a fee CAST and its partners would have to pay regardless of how the service performs; those groups currently pay 40% of DAC’s MRG, with the state contributing the remaining 60% through a program expected to conclude within a year.
In year one of SkyWest’s offer — which is only six months because SkyWest cannot take over until DAC’s contract expires in January — the airline requests an MRG that will not exceed $716,410; the state, though, would pay 60% of that, leaving local partners to split the remaining 40%, $286,564.
In years two and three of the SkyWest offer, the airline’s MRGs would not exceed $1,828,140 and $1,991,049 respectively; those numbers, Parker noted, would require local entities make roughly the same contribution they currently make to the DAC’s MRG, assuming the service does not grow. If the service exceeds expectations, those numbers could be lower.
The SkyWest deal would also offer CAST and its partners more stability, Parker said.
An industry-wide hike in jet fuel prices led to increased ticket prices and decreased ridership on DAC this past year. Should the DAC face a similar circumstance in the future, CAST and its partners could see the airline’s MRG increase as a result.
The agreement with SkyWest stipulates that the airline will absorb any extra fuel costs if fuel prices exceed $3 per gallon and those costs threaten to raise the MRG above the contract’s “not to exceed” threshold.
SkyWest also plans to offer more weekly flights than DAC and can offer passengers more competitive ticket fares and the opportunity to collect and use frequent flyer miles through a codesharing agreement with United Airlines, which would give passengers significantly more options than the DAC’s current interline agreement with United, Parker said.
Council did not take action regarding Parker’s presentation Monday.
Mayor Roger Miller announced he would not veto council’s approval of Charter Ordinance 2202 — which council passed to update and clarify the duties and responsibilities of both Sheridan’s mayor and city administrator — and asked the public to weigh in on the ordinance via a public referendum. Council passed CO2202 with the intention of clearing up confusion regarding Charter Ordinance 2158, which a previous council used to create the city administrator position in 2015. Miller has repeatedly called for the outright elimination of Sheridan’s city administrator position.
The public has a 60-day window to submit a petition to the city with a number of signatures equal to 10% of the city residents that voted in the last general election following the second public publication of CO2202, which will be Wednesday. A valid petition would trigger a special election, during which the majority of voters would decide whether CO2202 takes effect.
Though CO2202 effectively replaces CO2158, council never repealed CO2158. That means that if citizens successfully repeal CO2202, CO2158, and the city administrator, would remain in effect. Though the referendum would not decide whether Sheridan’s city administrator remains in place, Miller said he hopes a successful referendum vote would signal that the public wants to see council eliminate CO2158.
Council Vice President Thayer Shafer and Councilor Jacob Martin reiterated their support of CO2202 and argued having a city administrator is the most efficient way to manage the day-to-day operations of a growing city staff and budget.