Airline Prices Could Increase if Fuel Tax Bill Passes In Montana
New proposed legislation could have a significant impact Montana’s commercial airports. Missoula International Airport Deputy Director Brian Ellestad says this could affect their ability to compete for flights on a national scale.
“Right now, House Bill 661 is going to the floor,” Ellestad said. “It raises airline fuel from the current two cents on our airlines eventually up to six and a half cents. It is definitely taking another tool out of the tool box. It is definitely something we promote when we try to recruit air service. It definitely doesn’t help.”
Ellestad says that might not seem like a lot of money, but he says it all adds up.
“I don’t think it will hurt us during the peak summer season because we have a lot of volume,” Ellestad. “In the winter time or our shoulder season, where we don’t have that huge volume of passengers on some long-haul flights that are over a thousand miles, a penny a gallon ends up adding real dollars to our route. That is what we are concerned about.”
According to Ellestad, Missoula’s airport is already at a disadvantage compared to some of the larger airports nationwide.
“You need hub connections in order to get those low fares,” Ellestad said. “Each airline competes against each other. Our closest hub is Seattle and that is a little over 300 versus the Midwest or out east where an airplane can fun five or six different trips in a day. Our trip from Dallas to Missoula pretty much takes that aircraft out of the system most of the day.”
Ellestad says airlines may have to increase prices if aviation fuel taxes rise. If the bill were to pass, the revenue gained through higher aviation fuel taxes would be used to improve the infrastructure at small, non-commercial airports.