Joplin could get as many as three hubs for airline connections depending on the bid accepted by the U.S. Department of Transportation for service here.
Three bids were received to provide airline service under the federal Essential Air Service subsidy program. Those bids were taken after American Airlines in August applied for an EAS subsidy in order to continue Joplin flights.
American Airlines bid sought a subsidy of nearly $1.53 million a year to provide 12 round-trip flights a week to Dallas under it’s American Eagle brand. That is similar to the existing service. Joplin had won American service to Chicago more than a year ago, but the airline stopped those flights when COVID-19 hit earlier this year, nearly stalling airline travel.
Another bid was received for Joplin service. That one is for service by SkyWest, the regional brand for United Airlines. United offers 12 round-trip nonstop flights per week for a three-year term to Chicago and/or Denver. That bid asks for a subsidy of $1.2 million the first year, $795,943 the second year and $498,452 the third.
The third bid was from a small airline, Boutique Air, but that bid did not meet Joplin’s specifications and was excluded from DOT consideration, said Steve Stockam, airport manager. He sought and obtained City Council approval at a special meeting Thursday night to recommend to the DOT that it consider the United bid for Joplin.
Joplin started receiving federally subsidized flight service in 2004 after losing a branded carrier and watched its airline business fade away. During that era, the city worked with a consultant to recruit another name brand service until American Airlines agreed to come here in 2011 with flights to Dallas. It received EAS subsidy for a few years, but business became brisk enough the last two years it quit applying for the subsidy.
Last year, the city and members of the Joplin Area Chamber of Commerce paid out a $600,000 guarantee to establish a second hub with American in Chicago.
So why the change in endorsement to United Airlines?
“We learned a tremendous amount about the potential of the Joplin community when we had Chicago and Dallas flights,” Stockam told the Globe on Friday. “One of the things we heard with United that was a huge uptick is we had the ability to have more than one hub.”
Joplin experienced more than a 50% increase in international travel and an increase of more than 30% in connectivity and the point-to-point market of Joplin-to-Chicago flights, Stockam said.
“We now have solid numbers” of customers coming in and out of Joplin on flights. “Really, for us to take that next step (up) in our operations, we need a two-hub operation.”
That was an important point in discussions with the bidders, Stockam said. “American was open to having another hub for us, but their emphasis is going to be on a Charlotte (North Carolina) hub and not Chicago.”
Stockam said American is transitioning out of Chicago altogether in favor of Charlotte. “While that would help us some, it is not what we need,” to serve those who fly in and out of Joplin, especially international passengers and those who come to Joplin for business reasons.
Joplin passengers, when surveyed in past years, expressed preferences for hubs as Dallas, Chicago, Denver and Houston.
“What is very telling from our 2019 numbers is that Chicago generated more point-to-point customers in nine months than Dallas did in 12 months. So we know our No. 1 destination is Chicago. To have those international connections is important to us.”
The SkyWest/United bid specifically is one flight a day in and out of Chicago and one to and from Denver.
“That gives us very good connections east and west,” Stockam said. “It does not give us connections to the South and Southwest.
“When talking to United about whether there could be a second daily flight to Chicago, United said they had been looking at our market and that they could (also) provide Houston, thus giving us three hubs. They think adding a third flight might be beneficial to the community through Houston.”
Stockam said Houston would provide that Texas connection as well as connections in the South and Southwest.
“Looking at a United system with three major hubs would be one of the best possible scenarios we could hope for,” he added. If the third hub came along, it likely would be after United sees that the other two hubs have stable business.
When he spoke to the council on Thursday, Stockam also said that the financial markets have rated American Airlines as having the highest probability of the major airlines of filing for a Chapter 11 bankruptcy in 2021 or 2022.
He is not forecasting that American will do that, he said, but that information is out in the financial markets.
“That is based partly on how much cash they are burning a day to stay open,” Stockam said. “Of course, those things can change from day to day.”
But considering what Joplin has been through the past 10 years struggling to rebuild its airline service, Stockam believes the community might be better off with a different carrier.
“This is kind of bittersweet for me,” he said. “We have had a great success with American. We appreciate everything they’ve done in Joplin. But given what they need to do post-COVID, and what we need as a community, we just don’t go along together right now.”
Joplin had to submit a recommendation on the bids before Nov. 30.
The airport director expects the DOT to make a decision on awarding the bid perhaps sometime in the first half of December or by Jan. 1.
If SkyWest/United would be awarded the bid, it would likely take them until March or April to get equipment prepared and hire workers to staff the Joplin airport.
Until the decision is made, American will remain. If a new carrier is chosen, there would be a seamless transition between the two airlines, Stockam said.
United would use 50-passenger CR-J jets. Currently, American uses 50- and 75-passenger jets, but is phasing out the smaller jets.
The DOT has the final say on which airline it will be, Stockam said.