Wyoming state-run air service moves forward, framed as essential to economic diversification
Josh Galemore, Casper Star-Tribune
A plane parks at Casper/Natrona International Airport earlier
this winter. The Wyoming Legislature passed a bill that will allow
the state to create a state-run air service plan.
Of all the ideas to diversify — some say save — Wyoming’s economy, more reliable air service is hardly the most exciting. That distinction likely goes to the plan for making Wyoming a “cryptocurrency” hub, or perhaps it goes to doubling-down on research for drones and flying cars.
But reliable transportation in and out of the state stubbornly remains a top priority for local businesses and those considering relocating here.
“One of the first questions asked is about transportation: air service, highway transport, rail,” said Dave Hanks, CEO of the Rock Springs Chamber of Commerce. Sweetwater County is one of several communities that currently receives WYDOT-subsidized air service.
“We have multinational corporations here — headquarters in Turkey and Belgium and all over the world — so it’s very important for us to have connectivity,” Hanks said.
With similar messages echoed by corporate leaders across the state, WYDOT presented an ambitious plan to lawmakers over the summer: The state would effectively create a state-run airline. Many lawmakers initially balked over several parts of the proposal, including its cost, its supposed interference with private market and its lack of clarity.
The impending departure of Allegiant Air from Casper, announced last week, signaled more than the end of popular discount flights to Las Vegas. It showed the extent to which Wyoming is dependent on the whims of commercial carriers to serve relatively rural areas.
In the end, the economic development committee rejected the plan last fall. But Gov. Matt Mead’s Endow Council, focused on diversifying Wyoming’s economy, placed securing reliable air service at the top of its preliminary report in January. Sen. Michael Von Flatern, R-Gillette, then individually sponsored the same legislation that the full committee had turned down.
With more clarity — and perhaps more time to consider the matter — the Legislature agreed to the plan during its four-week budget session this winter. If all goes according to plan, “Air Wyoming” could take to the skies as soon as next fall.
Air Wyoming —
without the branding
The plan is to use a so-called “capacity purchase agreement” to ensure reliable, convenient and affordable air service across Wyoming. Those are the contracts that large carriers currently have with regional providers like GoJet or SkyWest.
“What the likes of United and Delta and America do is say, ‘We want 100 of your airplanes, we’re going to brand them as American Airlines and we’re going to pay you to fly them and tell you where to fly them,’” Nick Wrangler, a consultant hired by WYDOT, explained to lawmakers last year.
Under the WYDOT plan, the State of Wyoming would assume the role of carrier, negotiating a contract for a provider to offer certain flights, at certain times, to and from certain cities and at prices dictated by the state.
Improved air service and internet access top the list of funding requests for Endow, Gov. Matt Mead’s economic diversification project. Endow’s leadership presented the $56.3 million request to state lawmakers Friday.
That stands in contrast to the current arrangements through which the state offers minimum revenue guarantees to airlines serving small markets. Carriers are assured they won’t make less than a certain amount of money if passengers don’t buy tickets. But local airports have no say over when the airline schedules its flights or how much it charges for tickets, and carriers can always cancel flights or suddenly pull out of the market.
In addition to offering more reliability and control, it is expected to be less expensive than the current state subsidies for air service. Von Flatern said a statewide capacity purchase agreement would cost the state roughly $15 million over 10 years as opposed to the current $32 million being spent over the same period for existing payments to airlines operating in the state.
One reason for that is individual airports have far less bargaining power than when they band together.
“If the State of Wyoming is stepping in and doing that it carries a lot more clout,” said Hanks, of the Rock Springs chamber.
The bill passed by the Legislature creates an advisory group composed of lawmakers, members of the Endow Council as well as WYDOT and local representatives. Von Flatern said that by this fall the group should have an ideal plan in mind and begin negotiating a contract with an airline. That agreement will then have to be approved by the Legislature early next year.
“They have to decide things like how many airplanes will be needed, how many airports will be involved, what time of day will the flights be, what will the general pricing be,” Von Flatern said. “They’ll have to hustle.”
2019 take-off goal
WYDOT aeronautics division administrator Amy Surdam said her agency’s goal is to have the new flights, dictated by the state in consultation with local communities, taking to the skies by September 2019.
Once that happens, passengers shouldn’t expect to see plane bodies skinned with the WYDOT logo or tails adorned with Steamboat. Wyoming isn’t creating its own version of Aeroflot, the former flag-carrier for the Soviet Union that still features a winged hammer and sickle as its logo.
“We aren’t going to do any branding,” Surdam said. Nor will people have to navigate a state website to make flight reservations. “You’d still be able to go onto Expedia or Orbitz or the United platform.”
While some small carriers, like GoJet, do not appear to offer their own ticketing platform and exclusively serve larger airlines, Surdam said the goal is to find a carrier that can brand their own planes and sell their own tickets.
Rock Springs, Riverton, Sheridan and Cody currently rely on subsidized air service for at least part of the year. Von Flatern said he expects those airports to sign on to the new plan but that it would be open to all commercial airports in the state.
Cheyenne recently lost commercial air service when locally-based Great Lakes Airlines announced the abrupt end of service after years of unreliability. The move underscored the tenuous nature of many Wyoming communities to the national air service network.
Rural communities have been plagued by a combination of increased and decreased federal regulation in recent years. The deregulation of commercial airlines in the late 1970s put an end to the requirement that carriers serve small communities that were not profitable, or less lucrative than busier routes. The federal government stepped in with its own subsidies to incentivize airlines to fly to small cities anyway. But following a commuter airline crash in New York state in 2009, the Federal Aviation Administration increased the level of experience that pilots on smaller flights must have, making it more difficult for regional carriers to hire pilots.
Despite President Donald Trump’s budget request last spring to eliminate subsidized air service to Cody and Laramie, it appears that both airports will continue to have the cost of commercial flights covered in part by the federal government.
The Trump administration has also proposed eliminating the federal subsidies, which in Wyoming are used by Cody and Laramie, though Congress has not approved those cuts.
Casper is one of the few airports in Wyoming that does not rely on any subsidies for its air service, and airport manager Glenn Januska said he is unlikely to participate in the statewide plan. However, he added that if other WYDOT funds are freed up by the new arrangement, Casper might pursue money to help cover start-up costs for a carrier looking to come into the Casper/Natrona County International Airport, such as waiving landing fees or paying for marketing if American Airlines wanted to start offering service to Dallas or Phoenix.
“If they go into a new market ... they are looking for communities to absorb some of the risk for doing that,” Januska said. “What we’ve always looked at is some fund availability to help reduce the risk.”
Whatever the final details of the new plan, Von Flatern said that without air service many other economic diversification efforts will be for naught. He noted that even a city like Gillette, which similar to Casper does not rely on subsidies, has seen its regular service reduced as the local carrier was forced to cut flights in order to serve a contract to provide more planes elsewhere. Von Flatern said the state-run service agreement could fix problems like that.
“Lack of reliable air service is just the killer of economic diversity,” he said. “When you can no longer fly out of a town, you just really hurt the towns. You handicap them and this is what that’s trying to alleviate.”