American Airlines

Missoula International Airport has submitted its application for a U.S. Department of Transportation grant that could help it join forces with Bozeman to compete for nonstop American Airline service to Dallas-Fort Worth.

Missoula airport and development officials weren’t surprised by American Airlines’ announcement last week that it would make its first inroads into Montana in Bozeman.

“In fact, we were hoping it would happen” after Missoula’s application for a $750,000 federal grant failed last fall, airport director Cris Jensen said Tuesday.

Missoula International joined forces in November with Bozeman Yellowstone International to court American for seasonal service to Dallas/Fort Worth to and from both cities.

The Fort Worth-based airline accepted Bozeman’s bid, which included a larger revenue guarantee and $750,000 from a Small Community Air Service Development Grant awarded by the U.S. Department of Transportation a couple of years ago.

Missoula and Billings, which also tried to lure American for its Texas connection, were left out in the cold for now.

“We had every indication” that would happen, said James Grunke, director of the Missoula Economic Partnership. “What we don’t realize when we read the headlines is that it took four years for American to get (to Bozeman).”

Missoula understood its first attempt was a long shot, especially after its grant application was rejected.

The $5 million grant pot was distributed to 11 airports across the country. Montana’s lone recipient was Great Falls, which is using $385,000 for a revenue guarantee to attract new service to Chicago on United Airlines.

Bozeman’s bid included a match of another $750,000 in pledges from resorts in the Big Sky area and from the Bozeman Chamber of Commerce, as well as a marketing commitment of $210,000 – a package totaling more than $1.7 million. Bozeman flights to and from Dallas/Fort Worth will run from June to October, then resume in December to April.

Even had it received the grant, Missoula’s revenue guarantee was considerably less. Missoula business leaders and Destination Missoula raised $500,000 in pledges.

“I think what happened, in all honesty, was we had three weeks to put it together and we weren’t prepared,” Grunke said. “We should have been thinking of that stuff a year in advance. Those are all things we’re trying to get better at.”

The original concept was to parlay the federal grant money and local guarantees into a shared service between Missoula and Bozeman – perhaps connections four days a week with Bozeman and the other three days with Missoula.

“That was probably a best-case scenario,” Jensen said. “When we didn’t get the grant it weakened our case considerably.”

“American said it’s an interesting idea but let’s concentrate on Bozeman first,” said Grunke. “We do think it’s really positive for Montana and us that they’ve entered the state.”

In essence, Jensen said, American is using Bozeman as a testing ground for Montana.

“If they’re successful, and I do believe they’ll be successful, it makes it easier to get American into the state,” the airport director said. "This will give us more time to enhance our incentive package and kind of get ready."

Missoula last received a Small Community Air Service Development Program Grant in 2008 for $485,000. It was used to add a seasonal nonstop United Airlines flight to San Francisco in 2010.

“We have every intention to pursue another one,” said Grunke. “But it doesn’t necessarily mean we would be pursuing American. Maybe we want year-round to San Francisco or Chicago, or perhaps New York to Missoula. Over the coming months we’ll try to identify a route that makes sense, apply for a grant for that and then begin the negotiating process with the airlines.”

A new application will entail a new start to again assembling incentive packages from businesses, Grunke said.

“We’ve got zero incentives now,” he said. “They always look for them on a case-by-case basis. It’s a long negotiating process with an airline. They call it ‘risk sharing.’ They want to make sure the market proves itself."

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