Branson Airport Believed to Be First Private Commercial Airport
A group of investors broke ground last month on what's believed to be the country's first privately operated commercial airport. Construction is already underway on a plot of land near Branson, Missouri. KSMU's Missy Shelton reports on how investors and local officials hope this will impact the area.
Living in Southwest Missouri means Branson is a relatively short drive away for many people. What about for people who live hundreds of miles away? Well, many of them drive too. But a group of investors thinks even more people would come to the tourist hot spot if they could fly directly into Branson. Enter Steve Peet, CEO of Branson Airport, LLC.
"We have just an intrinsic belief that there will be a large demand for air service direct into Branson. Branson gets about 8 million leisure tourists there a year now. We don't need to capture a very large percentage of that in order to run a profitable operation. In fact, that's not even our target audience, the people who are currently coming to Branson. It's spurring new people who wouldn't consider driving great lengths."
That's good news for city officials...such good news, in fact that the city has agreed to pay the private investors more than 8 dollars for each passenger who arrives at the airport...Steve Peet says that's a revenue stream that will help make the venture profitable and Branson Mayor Raeanne Presley says it's going to be a win-win for the city.
"I think there's very little risk because it is a pay for performance. It wasn't as though we said we'd write them a check and see how it all worked out. If they bring passengers here, then we pay for those. And they've calculated that out based on what they believe the revenue upside will be to the city and we've been conservative in those numbers."
Some critics have wondered if the city will just be paying the airport investors for visitors who normally would come to Branson by car. Taney County decided against a pay for performance agreement for that very reason though they say they appreciate Branson's willingness to offer the payments. Chuck Pennell is presiding commissioner of Taney County.
"The airport will bring in visitors that may have been coming here before and we didn't want to pay extra money. That'd be a negative impact on the county. We wanted to go the step of knowing that it was new visitors because that's the claim they made when they approached us is we're going to bring new visitors. Ok, well how are we going to know they're new?"
That's a question that Branson Mayor Raeanne Presley says the city doesn't need answered.
"That's impossible to track. I know when the agreement was made, ther was a lot of discussion. 'What if they were just flying into another airport and now they were flying into this one?' Were those really new visitors and you'd be paying revenue. It really becomes an impossible thing to track. So you just be conservative in your numbers and take the obvious assumption that if they come to an airport ten miles away from Branson, they're probably going to visit sometime during their stay."
It's costing the private investors about 140 million dollars to build the airport and infrastructure, including roads going out to the site. County officials allowed the group to create a transportation district so they could issue tax-free bonds. Taney County Commissioner Chuck Pennell says it's a good way to get an airport built with virtually no drawbacks for the county.
"You know they don't have airplanes landing yet, of course but it's looking to be a very good possibility that this is going to happen and bring a benefit to us. The county commission's confident there is no risk to county government in this process. We've had it researched by two different attorneys in the last three or four years."
Though privately developed and operated commercial aviation is a new concept in the U-S, it's more common in Europe for the private sector to be involved in commercial airports. As development of the Branson airport moves forward, the aviation industry in the U-S is likely to pay attention. Of particular interest, the ability of private investors to attract a commercial airline to serve the airport, especially with five major carriers already operating out of the Springfield airport 50 miles up the road. Spencer Dickerson with the American Association of Airport Executives says there could be other pitfalls.
"Number one is the public accountability and public responsibility. Airports have been successful in this country because they've been under public ownership and public control. And that ensures transparency, access for everyone who wants to use a facility. So, that's probably the biggest obstacle to a private operation: Would you be able to have those same characteristics?"
Bransport Airport CEO Steve Peet says he's serving the public good by building the airport. And he says market forces will ensure the public accountability of his operation...If the fees the airport charges passengers are too high, they won't come. And with a profit-driven operation, the investors simply can't afford to let that happen.