Rapid City Regional Airport Receives $1.9 Million in State Funds to Develop New Air Service

Rapid City Regional Airport will receive $1.9 million in state funds to help develop new routes with potential new carriers after Gov. Kristi Noem signed Senate Bill 162 into law this week.

The bill allocates $3.8 million split between Rapid City Regional Airport and Sioux Falls Regional Airport for marketing, route restoration, business development and air service marketing grants to help restore air service to airports in the state following the onset of the COVID-19 pandemic.

Smaller airports in Aberdeen, Pierre and Watertown that serve as essential air service locations will receive a share of $600,000 in incentive funding.

Rapid City Regional Airport already received $9.2 million in emergency CARES Act funding in April 2020 from the Federal Aviation Administration. However, using the federal dollars for incentives is prohibited. Funding was restricted to capital expenditures, airport operating expenses and debt payments.

According to a news release from Rapid City Regional Airport, all funds they receive through the state incentive will be managed and distributed by Elevate Rapid City through a joint effort to lure the air carriers to bring new service to Rapid City. These funds will be used to offset expenses to air carriers by providing revenue guarantees and/or assistance with startup costs.

The airport will have up to four years to use the funds. If the funds aren't spent, they will be returned to the state.

"We know that in today's competitive landscape, air service is as critical to businesses in the decision-making process as workforce, incentives, and tax structures," said Elevate Rapid City President and CEO Tom Johnson. "As we bring in more competition and carriers, we can expect to see an increase in the number of companies considering the Rapid City region in response to these direct flight opportunities. This ultimately will create more jobs for our workforce."

Airport Executive Director Patrick Dame said he is pleased to work with Elevate Rapid City, the legislature and the governor's office to restore and build air service to the state.

"The airline industry was hit particularly hard during the pandemic and the combined effort to restore it will benefit the entire state," he said.

The airport is a significant contributor to the economic impact of the communities it serves. According to the State Aviation System Plan, air traffic through Rapid City Regional Airport helps generate more than $283 million in economic impact to the Black Hills region annually.

Rapid City-area legislators who sponsored Senate Bill 162 include Sens. Michael Diedrich, Helene Duhamel and David Johnson; and Reps. Becky Drury and Chris Johnson.

The final version of the bill passed the Senate unanimously on March 9, although Sen. Julie Frye-Mueller was the lone senator to vote against the measure when it was first brought to the floor on March 3. It won 47-21 in the House on March 8. Reps. Taffy Howard, Phil Jensen, Trish Ladner, Tina Mulally and Tony Randolph voted against final passage of the bill.

Contact Nathan Thompson at [email protected].

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