Title
Consider a memorandum/resolution providing a Minimum Revenue Guarantee (MRG) to attract new Air Service to Killeen Regional Airport.
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DATE: May 19, 2026
TO: Kent Cagle, City Manager
FROM: Jarrod Provost, Assistant Director of Aviation
SUBJECT: Minimum Revenue Guarantee (MRG) to attract new Air Service to Killeen Regional Airport
BACKGROUND AND FINDINGS:
In February 2021, Killeen's Aviation Department applied to the U.S. Department of Transportation for a Small Community Air Service Development Program (SCASDP) grant to fund a Minimum Revenue Guarantee program as part of a broader effort to launch and sustain nonstop daily air service. The city strengthened its application by forming an Air Service Development Task Force with regional partners such as chambers of commerce, colleges and universities, hospitals, Killeen ISD, Killeen Economic Development Corporation, Fort Hood, representatives from state and federal legislative delegations, and multiple city departments. This partnership helped demonstrate regional public and private support through 18 letters of support, local cash, and in-kind commitments toward the required match.
The purpose of the grant is to fund a Minimum Revenue Guarantee (MRG) to support the initiation of nonstop daily service to a new destination or to an equally well-connected hub. The MRG is an air service incentive that offsets passenger revenue shortfalls, thereby reducing the financial risk for airlines when launching or expanding new routes.
On July 27, 2021, the DOT awarded Killeen a grant totaling $1,000,000, supported by $310,000 in public and private cash contributions and $70,000 of in-kind services from the city. This included commitments from KEDC and AdventHealth Central Texas Hospital, additional funding from the City of Killeen's Aviation Department operations fund, waived landing fees for 24 months, and marketing support from the City's Communications Department.
The current grant is not sufficien...
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