News
Big Sky Airlines plans new direction
Kim Champney envisions regional carrier Big Sky Airlines emerging on a steadier course from its turbulent period of reduced routes and work force cuts in recent months.
By BECKY BOHRER
Associated Press Billings Gazette
The president and CEO of Billings-based Big Sky said changes are under way to improve the airline’s financial situation and to better fill its 19-passenger planes. And options for the future are being pursued, he said, including a partnership with a major airline.
"We intend to be here for the long term," Champney said.
While airline officials work on plans they hope will guide Big Sky into the future, they say they are also faced with a more immediate goal of breaking even.
Effects of 9/11
Profitability has been a concern, particularly after the terror attacks in 2001 shook the flying public’s confidence and left the industry reeling, Big Sky executive vice president Craig Denney said.
Initially, the airline lost up to 20 percent of its passenger traffic; later it began to recover that but didn’t fully, Champney said. A softer economy didn’t help: As businesses scaled back, the airline again felt the pinch, he said. Business travelers who previously flew, drove instead.
It also lost an Essential Air Service contract for the Dallas area, officials said.
"That has been a large obstacle to overcome," Champney said. In other areas, "from a route profitability standpoint, we have not been profitable."
Essential Air Service money
About half of Big Sky’s current business comes from Essential Air Service markets, where government subsidies make up for low passenger loads in largely rural areas, Denney said. Overall, passenger loads in non-EAS markets – in all, Big Sky serves Montana, North Dakota, Idaho and Washington – fell below profit level, at least before recent cuts, he said.
Officials have made changes in the last few months in hopes of improving the financial situation. Champney said they believe they’ve made the cuts needed to break even but didn’t say how much would be saved.
"Of course, the revenue side of the equation has to be there, too," he said.
The latest changes came this month, when officials said Big Sky reduced service in Kalispell and Helena; cut its fleet from 15 to 10 aircraft; laid off about 20 workers, at least temporarily; and ended the daily flight from Billings to Denver.
The airline now has about 220 employees.
This summer, Big Sky cut routes after less than a year between Billings and the Wyoming cities of Gillette and Casper, citing low passenger numbers, particularly among coveted local travelers, and monthly losses Champney estimated at up to $70,000.
Dan Mann said Salt Lake City and Denver are the more popular hubs from the Natrona County International Airport at Casper. But the manager of the airport, which relies on regional carriers, said it sought a connection to another airline and Billings when it began working with Big Sky. There also was the potential for lower fares.
Shortly after Big Sky began flying last year, United Express showed renewed interest in the market, he said, and got in; its flights to Denver are operated by SkyWest Airlines. It helped contribute to better service at the airport but also seemed to hurt Big Sky, he said.
"We thought it would be profitable, and I think it could’ve been without United Express coming in," Mann said.
SkyWest has what Big Sky wants and what officials say many other regional carriers have – agreements with major carriers.
Under such "fee for departure" arrangements, smaller carriers are paid a fee to fly under the code of a larger airline and may get incentives for reaching certain goals. The larger partners, which, among other things, can gain access to smaller communities, are responsible for such things as reservations and marketing, said Sabrena Suite, a SkyWest spokeswoman.
That lets the regional airline focus on flying, she said.
Big Sky has made progress, particularly on the operational side, over the past year, said Jon Austin, a spokesman for MAIR Holdings, which acquired the airline last year. A high performance level is important as Big Sky, considered to be in a "growth area," explores options, he said.
Champney said Big Sky is pursuing a fee for departure arrangement and letting major airlines know what it has to offer.
As airline officials monitor more immediate concerns, such as passenger totals, they’re also optimistic that they can more firmly establish a place in an industry where other airlines have also had to make cuts or adjustments.
"The industry changes fast. … Opportunities present themselves very quickly," Champney said, adding, though: "I think it will probably be a couple of years before we’re on the other side of the looking glass."
Copyright 2003 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Copyright © The Billings Gazette, a division of Lee Enterprises.
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