(STILLWATER, OK) – City of Stillwater and Oklahoma State University (OSU) plan to enter into a Memorandum of Understanding (MOU) to secure funding needed to keep commercial air service at Stillwater’s Regional Airport (SWO). American Airlines, the commercial air service provider through SWO, has set financial requirements for the City and other regional airports to meet based on hardships from ongoing impacts of COVID-19.
Through the MOU between the University and City, the financial obligation would be equally shared.
The agreement provides a Minimum Revenue Guarantee (MRG) to be capped at $2 million per fiscal year with a set distribution schedule as follows:
· Up to $1 million from January 1 - June 30, 2022
· Up to $2 million from July 1, 2022 - June 30, 2023
· Up to $1 million from July 1 - December 31, 2023
Subsequent MRG payments for fiscal years 2023 and 2024 will be dependent on allocation of funding through the normal fiscal year budget processes of City of Stillwater and Oklahoma State University.
“Due to the severe impact of the COVID-19 pandemic on air travel across the nation, especially regional markets, American Airlines requested financial support to continue air service throughout the recovery period of the pandemic,” said Paul Priegel, Stillwater Regional Airport Director. “Through our partnership with OSU and their continued support, we are protecting our investment and will continue to provide commercial air service through SWO for the next two years.”
Throughout the nation, airlines are faced with increased operational costs due to high fuel prices and lower ridership. The unprecedented shortage of pilots and other staff positions have forced airlines to make decisions that include moving pilots to larger aircraft with substantial larger ridership than at a regional airport.
“Providing this commercial air service has been imperative to maintain our healthy economy and protect our existing assets. Many of our local businesses depend on the airport’s daily flights to connect with clients and employees all across the United States. The airport provides jobs to Stillwater residents, including OSU alumni and students in the aviation industry,” said Mayor Will Joyce.
The Stillwater Regional Airport catchment area accounts for a service area of approximately 190,000 people and there have been more than 225,000 ticketed passengers since 2017.
“This is another example of the strong, collaborative efforts between the University and the City. I am proud that both continue to work together to provide the best available services for our community and those around us,” said Councilor Christie Hawkins.
Historically, the primary customers through SWO have been business travelers which helped the Stillwater market thrive prior to ongoing impacts of COVID-19.