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Branson Airport traffic rises; Southwest suspends AirTran routes

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The year got off to a turbulent start for Branson Airport LLC, but the sky has cleared recently.

Branson Airport Executive Director Jeff Bourk said routes added earlier this year with Orlando, Fla.-based AirTran Airways and Denver-based Frontier Airlines have buoyed the airport, which entered into a funding and forbearance agreement on April 12 with UMB Bank.

UMB is the trustee overseeing the $114 million in revenue bonds issued to fund the airport’s construction. Under the agreement, the airport has to meet enplanement and revenue requirements to avoid foreclosure.

Through the first seven months of 2011, the most recent data available from the U.S. Bureau of Transportation Statistics, Branson Airport’s passenger traffic has increased by 32.8 percent compared to the same time period in 2010.

“Our two major airlines have significantly increased service, and we’re looking at this relationship with Southwest developing,” Bourk said.

Dallas-based Southwest Airlines (NYSE: LUV) finalized its purchase May 4 of AirTran Holdings Inc. (NYSE: AAI), parent company of AirTran Airways, in a common-stock deal worth roughly $1 billion. As Southwest officials assess its new AirTran markets, they’ve decided in Branson to add flights to Atlanta in 2012 and cut seasonal flights to Houston, Chicago and Baltimore that were slated to run in December.

AirTran has increased its seats in the Branson market by 57 percent this year, Bourk said. Frontier Airlines also increased its seat availability in Branson by 140 percent during 2011, helping make the upward movement in passenger volumes possible. Among the top destinations for Branson passengers are Denver and Orlando, Fla., Bourk said.

Though Bourk declined to specifically comment on the forbearance and funding agreement, he said the new flights have allowed the airport to nearly meet its growth projections made under wits terms.

The agreement stipulates that in order to avoid foreclosure, Branson Airport must meet at least 70 percent of its monthly and quarterly enplanement and revenue projections through June 30, 2012.

According to an Oct. 6 filing by UMB Bank with the Municipal Securities Rulemaking Board, the airport has collected revenues of $2.5 million since April, roughly 11 percent below its nearly $2.9 million projection. Total operating revenues missed the budget by 8.6 percent, offset by expenses coming in at 10.3 percent under projections.

The airport’s enplanements were at 57,036, or 13.4 percent below the projected number of passengers boarding flights.

The airport’s passenger projections in the forbearance agreement range from 4,917 in April 2011 to 22,799 in June 2012, and its operating revenue projections range from $413,673 in April to a high of $732,968 in November.

On Oct. 25, it was reported on SBJ.net that some of the recently added routes are being suspended during the winter season. However, even as it is losing some flights temporarily, it is gaining others.

Southwest Airlines is suspending three seasonal routes in Branson by AirTran to Chicago, Houston and Baltimore, but it is adding three weekly flights to Atlanta following an examination of AirTran’s performance in smaller markets.

Southwest spokeswoman Katie McDonald cited weak demand for the Branson routes to the three cities as the reason for scaling back its winter flights.

“With our latest schedule that has come out, we have exited some routes out of Branson on a seasonal basis, from Dec. 4-April 9. We hope to bring them back with future schedules, but the exit on the seasonal basis was based on weak performance,” McDonald said, declining to outline the criteria for the determination. “Our goal is always to match our flying with customer demand, and unfortunately these routes were not in high demand for the time frame.”

Bourk said the airport anticipated the decision to suspend the routes during the winter, and with the announcement of the new routes to Atlanta beginning Jan. 7, the airport has a net gain of three weekly flights with the airline compared to the beginning of this year.

“It’s the off-season for Branson, so those flights are ending for the season,” he said. “We’ll have more flights with AirTran this January than we did last January.”

AirTran is canceling four flights per week to Chicago, four a week to Houston and one a week to Baltimore, Bourk said.

Southwest added those seasonal routes this year, he said, shortly after the company purchased AirTran. Branson Airport would have 10 weekly flights to Atlanta once the new routes are added in January.

Bourk declined to disclose how many passengers had booked flights on those routes recently removed, but he said AirTran is working with those customers to make other arrangements.

“It’s all about schedule optimization,” McDonald said, adding that Southwest schedules have been closely tied to traffic demand for some time, and now that AirTran is part of its system, those flight routes are under the same scrutiny.

“We are just constantly looking at where the profitability is in our system. We are legally able to work together, but we don’t have our single operating certificate. We are still operating as two airlines, but we are able to work together and share best practices as far as schedule optimization,” McDonald added.

She said it would take several years to fully integrate the systems even after the single operating certificate is obtained, which is expected to happen in first-quarter 2012.
Bourk said once the two airlines are acting as one, Branson Airport should benefit.

“When that’s in place, that is going to be exciting because that will mean you’ll be able to go to Southwest.com and buy tickets to and from Branson to any place that Southwest flies,” Bourk said.[[In-content Ad]]

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