(Riverton, WY) – The Riverton City Council approved an amendment to the air service agreement with SkyWest Airlines on July 2, ensuring continued commercial air service for the community despite rising costs.
The council voted unanimously to increase the block hour rate from $3,531 to $4,343 for fiscal year 2025. This adjustment comes as SkyWest renegotiated its contract with pilots and faced significant inflation pressures.
City Administrator Kyle Butterfield explained the importance of maintaining commercial air service for Riverton and Fremont County.
“Communities with commercial air service have economic activity, and the study that was recently performed for our area specifically brought $20 million of economic activity to Fremont county,” Butterfield said.
The amended agreement is part of Wyoming’s capacity purchase agreement (CPA) program, which aims to improve commercial air service in critical need airports across the state. Under this program, the state covers 60% of the cost, while participating communities contribute 40%.
Councilman Dean Peranteaux emphasized the airport’s critical importance to the region.
“Our airport is critically important to not just Riverton, but Fremont County. When you look at the overall economic impact of what this airport brings to our communities, I believe it was over $20 million,” Peranteaux said.
The projected annual subsidy for fiscal year 2025 is now $4,132,907, up from the previous estimate of $3,992,000. However, Butterfield noted that actual costs could be lower, as the city is invoiced based on actual usage.
Despite the increased costs, recent passenger numbers have been encouraging. June 2024 recorded the highest number of departing passengers for any month since 2002, with 1,976 passengers.
“We doubled capacity, but did not see a month over month drop, the amount of passengers that were flying, or the percentage of the available seats that were filled, and it was about 70%,” Butterfield reported.
The council discussed potential options if costs exceed projections, including reducing service levels or seeking additional funding from partner entities across the county.
Mayor Tim Hancock expressed concern about the rising block hour rate, noting it has nearly doubled since 2019. Butterfield attributed much of the increase to the impact of the COVID-19 pandemic on the air transportation industry.
“We didn’t even know what Covid-19 was. We’d never heard of it before. And Covid-19 decimated the travel and transportation industry to the point that it changed the cost projections, service models across the country,” Butterfield explained.
He added that being part of the CPA program likely helped Riverton maintain air service during the pandemic when many other communities lost service.
The amendment also allows for potential future extensions of the agreement. The current contract structure provides for three primary years, followed by two three-year extensions and a final four-year extension.
Funding for Riverton’s portion of the air service costs comes from the optional half percent economic development tax. This tax also supports other local initiatives, including ground transportation and ambulance services.
While approving the air service agreement amendment, the council also discussed ongoing negotiations with other Fremont County entities regarding the allocation of the economic development tax funds. Some disagreements have arisen over proposed changes to the memorandum of understanding (MOU) governing the tax distribution.
The council indicated a preference for maintaining the current MOU rather than pushing for changes that lack unanimous support from all participating entities.
As Riverton moves forward with the amended air service agreement, city officials remain optimistic about the future of commercial air service in the community. They see it as a crucial component of economic development and quality of life for residents.
“If we can do everything we can to improve the economy in Fremont county, we’re also improving the dollars that are circulating in the community, which means we’re increasing the potential for sales tax revenue, which means we can support more general fund activities,” Butterfield concluded.
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