Slow bounce back – Big Sky Airlines turns 25

Montana’s own airline starts its second quarter-century with an eye toward regaining profitability and connecting the people of some of the state’s far-flung towns with other Montana cities and larger hubs throughout the West.

By JOHN HARRINGTON – IR Business Editor

http://www.helenair.com/articles/2004/05/16/business/e01051604_01.txt

Big Sky Airlines turned 25 recently, and airport executives are traveling to each of the airline’s 19 cities (in four states) to celebrate.

The airline began operations in 1978, with service between Billings, Helena and Kalispell. Helena travelers could fly to Billings or Kalispell for $33 each way, according to the original flight schedule.

Today, Big Sky serves a dozen Montana cities, including seven in the eastern part of the state whose air service is subsidized through the federal Essential Air Service program. More than 170 of Big Sky’s 295 employees work in Montana. The airline’s 19-seat jets also fly as far east as Bismarck and as far west as Seattle.

President Kim Champney said even a small regional airline like Big Sky was hurt by Sept. 11. He said the drop-off in traffic didn’t happen as quickly as it did for larger carriers, but there was a decline in passengers, and people are slow to return to the skies.

"Our numbers have not come back as quickly (as some of the major national carriers), which I feel is a function of distance," Champney said. "A certain element of the public has gotten back into their cars and are driving now."

Champney said even at remote outposts like Glendive or Williston, N.D., Big Sky has to follow all the same procedures as the national carriers.

"We fill a different market niche, but we operate under the same rules," he said. "In maintenance, security, safety and oversight, we have to have all the same infrastructure that a larger airline does."

The seven Montana cities that enjoy Essential Air Service subsidies are an important piece of Big Sky’s business. Congressman Denny Rehberg repeatedly goes to bat for the service, which has come under increasing Congressional scrutiny in recent years.

"If a 75-year-old woman in Sidney has a heart attack, she needs to be able to get to Billings quickly," said Jay Martin, Rehberg’s deputy chief of staff. "This service is about maintaining a quality of life and standard of living in these smaller communities, and it needs to be protected."

Helena airport manager Ron Mercer said that from the Queen City’s perspective, Big Sky is popular with business people from around the state, particularly Billings, who have government business to attend to. He also said flights from Helena to Kalispell earn their share of traffic.

"The Kalispell flight does better than we anticipated," he said. "That’s just far enough and tough enough a drive that people are willing to fly up there."

From the state’s point of view, a number of state departments rely on the airline to get workers to hearings and meetings in far-flung locations like Glasgow and Havre.

"They fill a nice niche for us," said Tom Gustin of the procurement bureau in the Department of Administration. "They’re not competing with other airlines. They’re competing with windshield time."

Gustin said use of the airline for state travel is widespread among departments, with natural resources and conservation, labor and the governor’s office all taking advantage.

Champney knocks on wood when asked about the airline’s safety record, which includes so significant accidents in 25 years.

"That’s something we’ve got a constant focus on," he said. Safety’s not something you can take for granted. If you don’t have safety, nothing else matters."

There’s one drawback to the top-notch safety record though, especially with flights over the varied terrain and through the gusty winds of Montana.

"It makes our pilots very attractive candidates to move to other, bigger airlines," Champney said, admitting that losing pilots to the big leagues was a bigger problem before Sept. 11.

Profitability remains an issue. Big Sky was purchased by Mair Holdings of Minneapolis in late 2002. Mair, which also operates Mesaba Airlines, reported a loss of $3.5 million for the quarter ended March 31. A large portion of the loss was attributed to the cancellation of hundreds of Mesaba flights in January during contract negotiations with pilots.

For the quarter ended March 31, Big Sky reported a total passenger count of 22,226, down from 26,311 (15.5 percent) from the same quarter last year. The airline’s load factor increased, though, from 32.4 percent in 2003 to 35.6 percent in the first three months of 2004.

"We’ve been scaling back the last 12 months to try to get costs in line with revenues," Champney said. "What we’re trying to do right now is get to a point where we get rid of our excess equipment and get to a system that’s break-even. Then we can look to the future."

That future will in all likelihood include a prominent spot in Helena. The airline recently hired three workers here (its services were previously contracted out), and once complete, the expanded airport will include a Big Sky counter where previously the airline shared space with another carrier.

John Harrington can be reached at 447-4080 or [email protected].