Great Lakes Aviation, Ltd. (Great Lakes) began daily service to five Montana communities from Billings Logan International Airport on February 1, 2009.  The airline signed the City's Scheduled Airline Operating Agreement and Terminal Building Lease (Signatory Agreement) to lease the ticket counter area last used by America West.  Great Lakes was awarded the Essential Air Service (EAS) contract by the Department of Transportation after Big Sky Airlines suspended its EAS service, left the Airport, and subsequently went out of business. Great Lakes has resumed round trip EAS flights to Sidney, Glendive, Havre, Glasgow, and Wolf Point from Billings.  The Signatory Agreement contract expired on June 30, 2009, and Great Lakes wishes to renew the Agreement for an additional one-year period.

Presently, Northwest, Horizon, and United Airlines operate under the Signatory Agreement, which expired June 30, 2009; Frontier and Allegiant do not operate under the Signatory Agreement.  The Airport staff is working with all the airlines to extend the term of their Agreements for an additional one-year period.

The Council may:

• Approve the Agreement extension for one year;
• Not approve the Agreement extension; or
• Request staff to renegotiate some part of the Agreement extension.

This Signatory Agreement provides Great Lakes with 1,166 square feet of exclusive use space for ticketing and offices, and additional allocated operational space.  Based on the current rate schedule, the Lease would generate approximately $95,000 in annual rentals.  Landing fees are estimated to generate approximately $34,000 per year. 

Staff recommends that Council approve Amendment 1 to the Scheduled Airline Operating Agreement and Terminal Building Lease with Great Lakes Aviation, Ltd. extending the term for one year to expire on June 30, 2010.