A small US city is paying American Airlines up to $4 million to keep flying there as tiny communities continue to feel the impact of the pandemic

• Stillwater, Oklahoma, and Oklahoma State University are paying American Airlines $4 million to continue flying to the city.
• The airline is the airport's only operator and is at risk of losing air service completely without funding.

A small Oklahoma city and its local college are ponying up $4 million over two years to keep American Airlines flying daily to the city.

Dallas/Forth Worth-based American Airlines first started flying to Stillwater Regional Airport in Oklahoma in 2016 but recently planned to back out due to unprofitability. However, on Monday, the Stillwater City Council approved a joint deal between the city and Oklahoma State University to keep the service afloat, according to Stillwater News Press.

Currently, American is the only airport that flies to the city, offering service to Dallas/Fort Worth via its wholly owned subsidiary, Envoy Air.

"We are proud to continue serving Stillwater and providing the local community access to our global network," American told Insider in an email statement confirming the deal.

OSU and the city each plan to put up $500,000 for the first half of 2022 to keep the airline running, according to Stillwater News Press. Then, the entities will contribute $1 million each for the 2022-2023 fiscal year, which starts on July 1, 2022, and another $500,000 for the second half of 2023.

According to a memorandum of understanding approved by the OSU Board of Regent in January, the university agreed to enter the deal because the city would not be able to offer enough revenue guarantee on its own.

The airport's director, Paul Priegel, said in a January meeting with the City Council that the allotted funding will help the city continue to grow its aviation sector. According to Priegel, for every 10,000 people that board an aircraft in Stillwater, the airport will receive $1 million to invest in improvement projects, like better infrastructure.

Although Stillwater was on the brink of losing commercial service, Priegel explained in the meeting that the airport was actually thriving before the pandemic.

"We had had substantial growth and were in the process of getting bigger aircraft and more frequency," he said.

While Stillwater is funding a second life, that is not the reality for other small airports. Instead, high fuel prices, low demand, and pilot shortages have caused major airlines, like United and Delta, to suspend operations indefinitely to these communities, citing unprofitability as the main factor.

Henry Harteveldt, travel analyst and president of Atmosphere Research Group, told Insider in November that airlines do not have a civic responsibility to continue serving unsustainable markets.

"In the wake of the most financially brutal 18 months that the global airline industry has experienced due to the COVID pandemic, airlines are going to seek out markets that they believe will give them an advantage, but if a city isn't profitable, they will cut it," he explained.

Despite the threat of losing air service entirely, there are several airports that benefit from the government's Essential Air Service (EAS) program. The program ensures certain small communities do not lose airline connections to the rest of the country, though Stillwater is not one of them.

One EAS city losing its only airline is Ogdensburg, New York, located on the border of Canada. SkyWest's United Express flight will end in 2022 after giving a 90-day departure notice in January, according to local news channel WWNY.

SkyWest is required to stay until a new operator is in place, WWNY reported. However, because Ogdensburg is an EAS airport, two airlines have applied to take over operations, including Boutique Air and Air Charter Express, according to the Department of Transportation.

However, not every airport is eligible for EAS, leaving some cities without any operator at all. Williamsport Regional Airport in Pennsylvania lost commercial air service in 2021 when American Airlines pulled out after the federal payroll support program ended, reported the Philadelphia Inquirer.