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Item 1.B.
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| City Council Regular | |
| Date: | 01/23/2023 |
| Title: | Approval of Air Service Consulting Agreement with Mead & Hunt, Inc. |
| Presented by: | Shane Ketterling, Assistant Director of Aviation and Transit |
| Department: | Airport |
| Presentation: | No |
| Legal Review | Yes |
RECOMMENDATION
Staff recommends that City Council approve the Air Service Consulting Agreement with Mead & Hunt, Inc. for a five-year period.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
The Airport staff has over the years used air service consulting groups to work to bolster the number of flights and destinations for the Billings Logan International Airport (BIL). The airlines annually receive more requests for service than they can possibly provide, and it is important that BIL stay in front of the airlines to help ensure that the service levels received do not trend backwards during the current pilot shortage.
An air service consultant can assist the Airport by providing the type of data that airlines are interested in. It has been learned over the years that the airline planners are actually unaware of all the pertinent data points that could have an impact in the number of seats needed for our market or for the implementation of direct destinations that make sense. In 2016, with the help of an air service consultant, BIL held a number of discussions with American Airlines to bring direct service to BIL from Dallas. The air service consultant was also able to help the community secure a Small Community Air Service Development Program (SCASDP) grant from the U.S. DOT for $750,000, and helped coordinate the effort with the Billings Chamber and Big Sky Economic Development to secure a local share match of $746,000. This subsequently led to enough of a revenue guarantee to secure the new American Airlines service which started on July 2, 2017, and now includes additional Summer flights to Chicago and Winter flights to Phoenix.
Given the effects of COVID and the subsequent pilot shortage, the airline industry is still struggling to regain the luster achieved in 2019, and since BIL was short on average of 17,000 seats per month this past Summer, some significant air service work will need to be accomplished in the future, and an air service consultant will be needed to help achieve the needed access to the airlines for BIL to make the case for additional seats in 2023 and future years.
Staff advertised a Request for Qualifications (RFQ) on November 18, 25, and December 2, 2022. Five RFQ packets were requested and three responses were received, from MBA Aviation, Volaire Aviation Consulting, and Mead & Hunt Inc. An RFQ selection committee evaluated and ranked the proposals based on each firm's ability to provide the requested scope of work items and on its air service experience and successes. Based upon these rankings, the committee recommends the City Council approve the Air Service Consulting Agreement with Mead & Hunt, Inc.
An air service consultant can assist the Airport by providing the type of data that airlines are interested in. It has been learned over the years that the airline planners are actually unaware of all the pertinent data points that could have an impact in the number of seats needed for our market or for the implementation of direct destinations that make sense. In 2016, with the help of an air service consultant, BIL held a number of discussions with American Airlines to bring direct service to BIL from Dallas. The air service consultant was also able to help the community secure a Small Community Air Service Development Program (SCASDP) grant from the U.S. DOT for $750,000, and helped coordinate the effort with the Billings Chamber and Big Sky Economic Development to secure a local share match of $746,000. This subsequently led to enough of a revenue guarantee to secure the new American Airlines service which started on July 2, 2017, and now includes additional Summer flights to Chicago and Winter flights to Phoenix.
Given the effects of COVID and the subsequent pilot shortage, the airline industry is still struggling to regain the luster achieved in 2019, and since BIL was short on average of 17,000 seats per month this past Summer, some significant air service work will need to be accomplished in the future, and an air service consultant will be needed to help achieve the needed access to the airlines for BIL to make the case for additional seats in 2023 and future years.
Staff advertised a Request for Qualifications (RFQ) on November 18, 25, and December 2, 2022. Five RFQ packets were requested and three responses were received, from MBA Aviation, Volaire Aviation Consulting, and Mead & Hunt Inc. An RFQ selection committee evaluated and ranked the proposals based on each firm's ability to provide the requested scope of work items and on its air service experience and successes. Based upon these rankings, the committee recommends the City Council approve the Air Service Consulting Agreement with Mead & Hunt, Inc.
ALTERNATIVES
City Council may:
- Approve the Air Service Consulting Agreement with Mead & Hunt, Inc; or
- Not Approve the Air Service Consulting Agreement with Mead & Hunt, Inc. and advise staff on how to proceed.
FISCAL EFFECTS
The fiscal effects for this consulting service will generally run between $20,000 and $35,000 annually based on past efforts, but could run more for a significant project similar to the American Airlines effort. These funds are budgeted in the Airport's budget each year depending on the estimated work effort needed.