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Jeff Bourk confirmed Frontier Airlines will not resume service at BKG in the spring.
Jeff Bourk confirmed Frontier Airlines will not resume service at BKG in the spring.

Year in Review: 1. Southwest Airlines exits struggling Branson Airport

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BRANSON, JUNE 8—After just over a year operating at Branson Airport, Southwest Airlines (NYSE: LUV) flew out permanently June 8.

The move marked a blow to the struggling airport known by its code of BKG, which had been banking on the “Southwest effect” to Band-Aid its delicate financial situation.

A second blow came this month when Frontier Airlines announced it would not continue flights at Branson Airport in the spring, BKG Executive Director Jeff Bourk confirmed.

Upon announcing Southwest’s decision to leave in December 2013 – after its arrival in March – Southwest spokeswoman Michelle Agnew told Springfield Business Journal the decision to exit airports comes down to the viability of its markets.

“It’s a combination of many factors,” she said at the time. “The market did not meet the demand that we needed to remain viable in that market.”

Since construction of the $148 million private airport in May 2009, BKG posted $21 million in combined net operating losses in its first four years in business. With Southwest on board in 2013, BKG recorded $3.9 million in operating income – not including depreciation or interest expenses.

As of November, the airport’s current financial position on paper puts annual revenue at $4.56 million, not including interest and depreciation, with net cash flow of $653,481 in large part due to Dallas-based Southwest’s early year activity and the airport’s pay-for-performance agreement with the city of Branson. Before the exit of Southwest, airport officials had anticipated revenue of $8.3 million this year with total passengers of more than 178,000. That projection fell to 73,600 passengers without the major carrier.

As a stopgap measure, on June 12, Branson Airport signed startup charter flight service Buzz Airways. The Smyrna, Tenn.-based charter-flight service entered the Branson market with nonstop flights to Chicago and Houston. The new carrier helped fill service holes when Southwest’s nonstop flights to Orlando, Chicago, Dallas and Houston stopped. The airport continues to search for a major carrier.

Its money woes continue, specifically its debt obligations.

In June 2007, airport organizers secured nearly $115 million in bonds for development, but an April 2011 default on debt service payments led to a funding and forbearance agreement. Airport officials asked for up to $23 million more in November 2012 in a forbearance amendment. In September, the airport secured a third debt-service extension. The amendment was approved by bondholders and bond trustee UMB Bank.

BKG expects a 2015 operating loss of $1.33 million on $3.35 million in revenue, with total passengers projected to land at 94,248.[[In-content Ad]]

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