A lack of affordable airfare options to and from Missoula is often cited as the main barrier that prevents high-tech businesses from coming here or keeps those in town from growing.
Tom Stergios, the general manager of Advanced Technology Group’s Missoula Solutions Center, doesn’t mince words when he expresses his frustration about the situation.
“The cost of flying in and out of Missoula is the single biggest challenge that we face in building a growing business in Montana,” he said.
His downtown Missoula office employs more than 60 people who tell some of the largest companies in the world how to better manage their customers and billing systems. Thirty-four of the firm’s staffers earn about $81,000, three times the county’s median wage.
Economic growth advocates want companies like ATG to expand here. That’s why it’s disturbing that the choke point comes not from the company’s business plan, but from the high cost of travelling in and out of town, which ATG consultants have to do often.
“For ATG, the problem is not the number of flights, number of carriers, or direct flights – rather it is the prohibitive cost of those flights, particularly Midwest and East Coast destinations,” Stergios explained. “We had dozens of flights to New York, Boston, and the Philadelphia area that averaged $800 to $1,000, often with advance notice.”
Christina Quick Henderson, the executive director of the Montana High Tech Business Alliance, said startups are especially hindered by a lack of affordable travel options.
“With technology, more businesses are able to do business on the phone, so to be competitive, many times you just have to physically be there,” she said. “You have to bite the bullet and get on a plane, and airfare here is not competitive. And you sometimes have to take multiple flights.”
Henderson said she’s spoken with Paige Williams, the founder of The Audience Awards in Missoula, a tech company that created a video contest platform.
“She travels frequently to L.A. and New York because her business is oriented around the entertainment industry,” Henderson said. “So if she’s trying to close a deal with a client, she has to pay for a very expensive plane ticket.
"That’s tough for a startup where they are saving every penny and trying to be concerned about cash,'' Henderson said. "It’s difficult to not have ease of travel to grow the business while still maintaining a good financial bottom line for the company.”
Henderson said that many venture capital firms and investors will steer clear of putting too much cash into a Missoula company if they can’t easily jump on a plane to get here.
“Having more affordable airfare would remove a significant barrier for doing business for Missoula companies,” she said.
Another oft-cited complaint among Missoula business owners is that Bozeman can attract and keep more high-tech jobs because the airport there has more direct flights to major hubs like Dallas/Fort Worth. However, there soon may be some relief on the horizon.
Earlier this month, airport officials in Missoula learned they’ll be getting a $600,000 grant from the Small Community Air Service Development Program from the U.S. Department of Transportation.
Cris Jensen, the director of the Missoula International Airport, said the money will go toward a revenue guarantee to attract an airline like United Airlines, which would fly to either Dallas/Fort Worth or Houston. The $600,000 will be matched with $400,000 from community backers and $200,000 from the airport for a total package of $1.2 million.
Besides giving Missoulians another direct route, the new connection will increase competition and potentially drive down prices.
Jenn Ewan of the Missoula Economic Partnership said that her organization considers it a priority to help businesses gain access to affordable travel options.
“We here at the MEP get a few direct cold calls, at least one or two a month, from companies across the country who want to do business here,” she said. “We are competing with places like Denver, Salt Lake and Austin. They’d like to move their operations here, but airfare is a factor, depending on their business type. If they are a high-tech business, if they want to expand, they want to entice people into the workforce.”
Ewan said she’s never had a company say they didn’t move here solely because of airfare prices, but that is one thing they considered.
“It’s a combination of factors,” she said. “Housing prices, especially for companies coming from the Midwest, are a problem. The workforce here is an issue. But airfare does come up frequently.
"Typically these tech companies don’t just do business locally, so they need flights to New York, Washington, D.C., Dallas, a year-round Chicago flight, year-round to Atlanta and a direct flight to Boise.”
Ewan said Bozeman had a three-year head start on giving a revenue guarantee to United Airlines for a Texas flight because Big Sky Resort, a luxury ski destination, kicked in much of the money because they were seeking tourists.
“We didn’t have as much leverage,” Ewan explained.
She said her organization has pledges for the money from businesses who have a stake in getting a Texas connection, so it’s just a matter of collecting the money. She didn’t have a timeline on when the new connection would be up and running.
“The direct flight to Texas, if you are looking to travel to the southeast, forces other airlines to compete,” she said. “Inevitably, it will drive down the cost. And Dallas has more international connections if they are doing international business. And Texas is such a huge market, especially in regards to tourism. We perceive it being helpful.”
Henderson said that she’s heard direct flights are an obstacle in Bozeman as well.
“It’s a statewide challenge,” she explained. “More flights and more affordable flights are always going to be a benefit.”