Air Service to Mid-sized Cities

It's well known that the airline industry has struggled during this economic recession. What's less known is how mid-sized cities are finding ways to keep airlines flying to their communities:

http://www.nytimes.com/2009/08/18/business/18airports.html?_r=1&partner=rss&emc=rss

As this story shows, cities like Duluth, Minnesota, population 87,000, are offering financial incentives to keep the flights coming:

"While many of these cities have struggled for years to keep their airline service, the issue has become more acute in recent months. Airlines have been cutting capacity sharply for much of the last year — first as their costs rose with skyrocketing oil prices and then as the economy slowed, reducing demand for air travel. To save money, the airlines either eliminated service or significantly cut back on routes.

"But some airlines have been willing to resume service if cities agreed to shoulder most — or all — of the financial risk."

This may seem like an expensive option for mid-sized cities. But losing air service would be even more expensive. Cities like Duluth depend on air transportation for their economic livelihood.

When viewed in that light, a mid-sized city paying airlines looks less like an expense and more like an investment.