Gary/Chicago International Airport is in talks with regional carrier ExpressJet to fly from Gary to major airline hubs such as Denver International and Dulles International in Washington, D.C.
Gary airport Director Chris Curry briefed a committee of state legislators on the development Thursday, telling them ExpressJet would want the airport to guarantee it revenue for its first year of operations at Gary.
"In my opinion it will be extremely difficult to get a mainline carrier in the airport without revenue guarantees," Curry told the Northwest Indiana Transportation Study Committee. The committee was meeting at the headquarters of the Northwestern Indiana Regional Planning Commission, in Portage.
ExpressJet, headquartered in Houston, has served as a regional feeder for major airlines such as Continental and United. It has a fleet of 244 Embraer regional jets and 5,400 employees, according to its Web site.
The airline did not return calls Friday requesting comment.
If ExpressJet did come to Gary, it would be the first established carrier to land at the struggling airport. Others that have come and gone either have been start-ups, such as Hooters Air, or teetering on the brink of bankruptcy, such as Southeast Airlines.
Curry told legislators the airport is weighing whether the routes to Denver and Dulles would be viable.
Revenue guarantees are a common but controversial practice at smaller, regional airports. Typically, an airport will guarantee revenue equal to the fares a target number of passengers would pay. Fares actually paid by passengers are subtracted from the guaranteed amount, and if the target is reached no money is paid to the airline.
In early 2004, Chicago/Rockford International Airport landed Northwest Airlines service to Detroit by offering a $2.8 million revenue guarantee. When the airline ceased those flights in January 2005, the airport was on the hook for $1.2 million.
Curry told the committee that community leaders, including Bill Hanna, executive director of the Northwest Indiana Regional Development Authority, have been in on talks about landing the airline.
Contacted Friday, Hanna said the RDA wants any plan to bring an airline to Gary examined by consultant Landrum & Brown, which currently is preparing a business and strategic plan for the airport. The airport is splitting the $449,732 cost of the study with the RDA.
"All I can say is from the RDA perspective we're focused on the business plan and how these initiatives fit into that," Hanna said.
Hanna would not comment on whether or not the RDA would consider pitching into a revenue guarantee to attract an airline to the Gary airport.
Plans under discussion would have ExpressJet feed United flights at Denver and Dulles, Curry told the legislative committee.
ExpressJet flew under the United Express banner over the summer, flying between O'Hare International and Dulles. But the mainstay of its business has been its flights for Continental Airlines under the Continental Express banner. Those flights operate in the United States, Canada, Mexico and the Caribbean.
RISKY BUSINESS? In early 2004, Chicago/Rockford International Airport landed Northwest Airlines service to Detroit by offering a $2.8 million revenue guarantee. When the airline ceased those flights in January 2005, the airport was on the hook for $1.2 million.
