|Posted on Monday, September 15, 2003|
We Mean Business. Illinois Business.
MidAmerica welcomes commercial airline tenant Great Plains
MASCOUTAH - When the first Great Plains Airlines commercial turbo or jet to depart from MidAmerica St. Louis Airport takes to the skies on Oct. 7, a whole new era for the county-owned airport will begin.
And for skeptics who question why this business plan will succeed when the Pan Am venture did not, one has only to look at the vast difference in strategies for the answer.
Tulsa-based Great Plains Airlines is piloting two direct flights each weekday from MidAmerica to Dulles in Washington D.C., to Midway in Chicago and to both Tulsa and Oklahoma City. There will also be reduced service on weekends.
For business professionals in Southwestern Illinois, return flights the same day are key, in addition to two practical destinations.
"This is going to be a real catalyst for MidAmerica and for Southwestern Illinois," said Terry Beach, economic development director for St. Clair County. "We first met with Great Plains Airlines in March. We knew they were serious about their plans to expand."
By "catalyst," Beach is referring to aviation-related clients who are close to signing leases with MidAmerica now that the Great Plains deal is in place.
"We're in negotiations with several aviation-related companies of all types, including charter, maintenance, repair and overhaul," he said. "Several of them wanted to see who was going to make the first jump."
As opposed to other commercial airlines' compact-size commuter crafts, the two planes Great Plains is premiering at MidAmerica - the 32-seat Fairchild Dornier 328 jet and its companion turbo prop - have leather seats and 6'2" clearance. The planes are manufactured by DaimlerChrysler.
The county's deal with the airline is this, according to Beach: a $750,000, no-interest loan, $500,000 of that to help Great Plains secure lease agreements for the two aircraft; Great Plains will pay back St. Clair County in five equal payments over five years. The loan is collateralized; should the airline leave MidAmerica, it would be required to reimburse the county. St. Clair County is lending Great Plains an additional $250,000, no-interest loan, Beach said, enabling the airline to maintain the initial aircraft.
"We've seen their financials," Beach said. "And we feel comfortable that this is a sound business loan for St. Clair County taxpayers."
MidAmerica is providing a 12-month abatement of landing fees, gate rentals, support equipment, terminal rental, refueling labor and aircraft parking fees and has agreed to assist Great Plains with job training.
The county also agreed to purchase $100,000 worth of tickets for either promotional or resale purposes.
Airport Director Tim Cantwell described the new partnership is a "formidable" relationship.
"It's a magic fit between a business plan for an emerging airline and a great opportunity that sits here at MidAmerica Airport," he said.
Great Plains Marketing Consultant Tom Kimball said other similarly sized airports across the U.S. offered bigger incentives, but St. Clair County's sense of unified vision, unified mission and regional cooperation among business and government leaders was what sealed the deal.
"It's extremely impressive to speak with an accumulation of officials who have that sense of vision and stamina," Kimball said. "From our very first meeting with MidAmerica, we knew the officials here are a rare breed. Southwestern Illinois exudes growth and vitality. Finding so many people who have the foresight these people do made us want to do business here. What this airport has done is stood the test of time, and in that sense, MidAmerica St. Louis Airport and Great Plains Airlines share that common bond."
The recipe for success in an economy of failing airlines, Kimball said, is to focus on a doable niche and take right risks to move forward.
"To make things happen today, unless you're a Dallas, a Houston or another large hub, you need to grow your own company and focus on what risks to take," he said. "We are looking for the long haul. Our partnership with MidAmerica is a marriage of two companies that were tough as nails and stood in the trenches, particularly since 9-1-1. That, more than anything else, is why Great Plains Airlines chose MidAmerica Airport."
Great Plains CEO David Johnson said the airline pays commissions to travel agents, translating into another economic incentive for Southwestern Illinois.
The airline also offers a frequent flyer rewards program known as the Buffalo Club and serves Krispy Kreme doughnuts on all morning flights.
Johnson said in addition to attracting business travelers, Great Plains' planned flights from MidAmerica to destinations including Albuquerque, Santa Fe, Taos and Angel Fire N.M. will cater to golfers and skiers.
Buffalo Sports Express is the airline's door-to-door vacation excursion