Vermont Business Magazine Allegiant Airlines will discontinue service between Burlington International Airport (BTV) and Orlando next year, but BTV has secured a long-term contract with the other airlines serving the airport. BTV has been working over the past 12 months with all airlines serving the airport to establish a new contract agreement. Today, the airport announced that the long-serving airlines of BTV have agreed to the terms of the new, five year lease, and the airport expects to have the contract fully signed by the end of the year. The airport has not had a signed airline lease for approximately 20 years. The current agreement between airport and airlines is strictly a month-to-month contract. A summary of the new, five year lease can be found below.
Allegiant air service began in November 2013. VBM file photos.
With the conclusion of the contract negotiations, Aviation Director Gene Richards announced that as of March 4, 2017, Allegiant Airlines will no longer provide its service between Burlington and Sanford International Airport, approximately 30 minutes north of Orlando, Florida. Allegiant Airlines, classified as an Ultra-Low Cost Carrier (ULCC), is constantly managing its schedule to find the most profitable routes, and has now concluded its mission in Burlington.
“Burlington International Airport has had an outstanding relationship with Allegiant over these past three years, and will continue to work with its team to see if there are any other options available to bring Allegiant Air back to Burlington,” said Richards. “The new contract agreement represents a significant step forward for the Airport’s fiscal stability, and we look forward to our continued partnership with the many airlines that will continue to serve Burlington into the future.”
Allegiant has provided its twice a week service to Sanford Airport since February of 2014. Allegiant’s flights provide approximately 12,000 enplanements a year, representing 2 percent of the Airport’s total passengers. Together, Burlington’s airline carriers provide approximately 600,000 enplanements a year. Passenger counts have remained stable for the past several years at BTV, and are on track to exceed last year’s numbers, with approximately 7,000 additional passengers this year to date.
It is not clear that Allegiant’s departure will mean the full loss of the 12,000 enplanements, as BTV will continue to serve Orlando International Airport (MCO) with many of its current airlines, including JetBlue Airlines flying through JFK Airport; American Airlines through Charlotte, Philadelphia, and Washington National; Delta Air Lines through LaGuardia, Detroit, and Atlanta, and United Airlines through Chicago, Washington Dulles, and Newark. These one-stop flights are offered multiple times a day and fly directly to the Orlando International Airport.
The Airline Lease Agreement will be effective July 1, 2016 for five years. Highlights of the Agreement include:
- The new Agreement is crucial to the financial and passenger stability of the Airport’s future, resolving a challenge noted by the Airport’s Rating Update by Moody’s Investor Service in December 2015: “An uncertainty provided by a month-to-month airline agreement.”
- The Agreement allows the Airport to approach larger reserves and positive debt coverage ratios for future improved credit ratings, as recommended by the Airport’s Rating Update by Moody’s Investor Service in December 2015, which indicated that a debt coverage ratio of 1.5x could make the rating go up.
- The Agreement strengthens the Airport’s financial stability by partnering closely with airlines to ensure that any unexpected budget changes are covered in partnership with the airlines.
- The Agreement focuses on the methodology for determining terminal rental rates and landing fees.
- The Agreement outlines the responsibilities and space needed by airlines.
Source: BTV 11.28.2016