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Allegiant Airlines

Allegiant Air served Lincoln for 2 1/2 years with flights to Las Vegas. Now a new leisure carrier is eyeing Lincoln for service to Las Vegas.

The Lincoln Airport will likely miss out on a chance to add a new air carrier and at least one new destination because it cannot provide the financial incentive the airline wants.

Executive Director David Haring told the Airport Authority at its meeting Thursday that the airport has "an offer on the table to commence leisure service."

Haring said the airline is a leisure carrier focusing on providing infrequent service to vacation destinations, similar to Allegiant Airlines.

He declined to name the carrier, but a source told the Journal Star it is Sun Country Airlines and it is initially proposing to fly to Las Vegas.

Sun Country is based in Minneapolis and flies to more than 50 destinations, including some in Mexico and Central America. Among the smaller Midwestern cities it serves are Duluth and Mankato, Minnesota, and Madison, Wisconsin.

It has been in expansion mode, growing its route network by about 80% since 2018.

In an email, a Sun Country spokesperson said the airline doesn't "have any plans at this time of starting service in Lincoln."

The potential snag is that the company wants the airport to provide a revenue guarantee to help it offset startup costs and potential losses as it works to build passenger interest. Haring estimated the number to be about $600,000.

Federal Aviation Administration rules allow airports to waive fees, such as landing fees, and provide marketing assistance for airlines that start new service, but it does not allow them to provide direct financial aid.

That means any money for a revenue guarantee would have to come from the private sector or local government entities, and Haring said the prospects of that happening are not good.

"We have kind of exhausted all resources in trying to attract revenue guarantees," he said.

Revenue guarantees are not uncommon, and the FAA actually helps by offering grants to underserved airports.

Lincoln has one of those grants in hand, for $750,000, as well as a local match of $500,000 raised from private sources.

However, the grant and the match are both tied to a plan to entice American Airlines to add service from Lincoln to Dallas.

Haring said the airport could seek to amend the grant, but he said it's unlikely the FAA would approve of the money being used for leisure service.

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American has made no commitment to flying into Lincoln.

Airport Authority Chairman Nick Cusick, who led the effort to get private funds for the $500,000 match, said "it's just harder" to convince people to put up money for leisure service.

Both he and Haring said some business owners see leisure airline service as something that only takes people out of the community rather than bringing in visitors.

But Cusick also touted the benefits of such service, including larger planes than normally fly out of Lincoln and a potential to spur more interest from other airlines.

"We think if we get the leisure carrier here, that will induce other (airlines) to decide," Cusick said.

The Lincoln Airport previously had service to Las Vegas from a leisure airline.

Allegiant Air, perhaps the best-known leisure carrier, flew out of Lincoln to the gambling mecca from February 2006 to September 2008.

The service seemed to be modestly successful and Allegiant made occasional overtures about possibly expanding to other cities.

It never did, however, and it moved the service to the Central Nebraska Regional Airport in Grand Island, where it still operates.

At the time, Allegiant cited high fuel costs and competition from Southwest Airlines at Omaha's Eppley Airport as its reasons for moving to Grand Island. It flies routes to and from Las Vegas and the Phoenix area from the Central Nebraska Regional Airport.

The airline later expanded to Omaha in the spring of 2015, where it operates flights to Las Vegas, Phoenix and four destinations in Florida.

Allegiant did not seek any revenue guarantees when it came to Lincoln, said Bob McNally, the airport's operations director.

Haring said time is running out on striking a deal with the additional airline. He estimated he has less than a month until he'll have to decline if money can't be raised.

Airport board member Bob Selig, who ran airports similar in size to Lincoln's for 40 years, said Lincoln is already underserved and "can't afford to turn down air service."

Selig called the notion that Lincoln would lose out on an opportunity for air service because it couldn't get financial support from the community "plain silly."

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Reach the writer at 402-473-2647 or molberding@journalstar.com.

On Twitter @LincolnBizBuzz.

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Business editor/reporter

Matt Olberding is a Lincoln native and University of Nebraska-Lincoln graduate who has been covering business for the Journal Star since 2005.

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