Everyday Willard Airport and its community partners work to better connect central Illinois to the world. The effort helped to convince American Airlines to upgrade all CMI service to larger jets – each flight now features first class, main cabin extra, and economy. Service performs well with nonstops to both Chicago O’Hare and Dallas/Ft. Worth, connecting to more than 220 destinations in a single stop, every day of the week.
But Willard’s internal data shows many of those who live in Champaign County drive to other airports for nonstops flights when they travel to places like Orlando, Tampa, Las Vegas, and Phoenix. Willard has recently met with low-cost carriers who could provide nonstops. But there are hundreds of airports just like Willard seeking the same service – many with much more lucrative incentives.
“We designed our air service incentive program to be best-in-class,” said Willard Executive Director Tim Bannon. “But, under federal law, there’s only so much an airport, itself, is allowed to do.”
Willard’s incentive program includes marketing support, fee waivers, and funding to defer start-up costs. That’s all the FAA allows by regulation. But other communities are developing much richer incentives through other sources of funds.
Successful communities often offer an airline minimum revenue guarantee (MRG). An MRG is a contractual agreement with an airline that guarantees the airline a minimum amount of revenue from a particular route. In essence, the MRG serves as a financial safety net for the airline, ensuring that it does not incur losses on a particular route during startup.
The purpose of an MRG is to encourage airlines to operate routes that may represent risk to the airline in the short term but have the potential to generate long-term benefits for the airport and local economy. By offering an MRG, airports/governments can incentivize airlines to introduce new routes in their targeted markets and jump over other markets that are not offering risk sharing incentives for new service.
The University of Illinois has pledged $500,000 in MRG funding for a vacation route. The Airport, working alongside the Champaign County Economic Development Corporation and Experience Champaign-Urbana, is seeking a match of $500,000 from the community to make the service possible.
“We know from the successful air service development campaigns in other communities that we will have to offer an MRG to secure service to a vacation destination,” said Bannon. “We hope many in the community will join the effort to show prospective airlines that Champaign-Urbana is ready to fly.”
