Tonight USA Today and KYTV are reporting what we confirmed earlier: AirTran will provide the new Branson Airport with one-flight-a-day, daily service between Atlanta and Branson beginning in May. We congratulate Branson airport investors and management.
No doubt many of you are wondering how Branson did it—or more to the point—how come AirTran is flying to Branson rather than Springfield? The answer lies in the business details. But since both the airport and AirTran are private companies, details probably won't be forthcoming.
The answer is almost certainly money. In short, AirTran is being subsidized to fly to Branson. We’d hazard a guess that the amount is in the neighborhood of $2 million a year.
We base that guess on the fact that AirTran is currently given $6.5 million a year to provide service in Wichita. That’s for three flights a day, Sunday through Friday, with two flights on Saturday. So, one flight a day in Branson might reasonably be expected to cost about $2 million a year.
Why doesn't Springfield subsidize airlines? There are two main reasons: 1) the airport is publicly owned. As such, it can't subsidize one airline without subsidizing all of them. That doesn't work from a business point of view because the airport has to generate revenue in order to stay up to date, open and operating. 2) Subsidizing air service was faddish several years ago, but is rarely done now because it generally does not work. Once the money goes away, the service goes away. It tends to be a bad investment.
How does this impact our airport? Not much––we already provide service to Atlanta: four flights a day on Delta. In the long run the new Branson service may have a positive impact for SW Missouri customers because competition between AirTran and Delta may drive down fares at both airports.
The task facing the Branson airport now is to establish and grow the new service and to make it viable over the long term––without the benefit of subsidies. That will be a huge challenge in the current economic environment and we wish both AirTran and the Branson airport the best of luck.