History was made on Tuesday as Kansas City officials gathered at Terminal C to announce KCI’s first regularly scheduled nonstop transatlantic flight.
Icelandair has agreed to a seasonal nonstop flight from KCI to Iceland’s capitol, Reykjavik.
Aside from the time the Kansas City Chiefs flew to London and back for an NFL regular season game in 2015, and other similarly rare occasions like weather diversions, there’s never been a nonstop flight to Europe coming out of KCI.
The first arrival from Icelandair comes to KCI on May 25 and the first departure from KCI will be the following day. Service will continue until the end of September. Eastbound flights will continue three times a week, leaving KCI on Mondays, Wednesdays and Saturdays. Return flights to KCI will occur on Sundays, Tuesdays and Fridays.
By noon on Tuesday, Icelandair was offering a $572 roundtrip ticket fare for an adult passenger leaving on the debut May 26 flight, with a return flight on June 1.
“Icelandair has be in operation for over 80 years with a long and illustrious history,” Icelandair chief executive Bjorgolfur Johannsson said in a statement. “But today marks the first time in that history that Icelandair will offer non-stop flights to and from the heart of America to Iceland and beyond. This will not only benefit families and leisure travelers wanting to explore the world but will also open up many opportunities for business, trade and foreign relations between Europe and Kansas City.”
KCI officials have sought a nonstop flight to Europe for at least 10 years. KCI officials say they’re still pursuing additional transatlantic flights, possibly to the United Kingdom or Germany.
“Icelandair coming to Kansas City helps us in talking about more destinations in Germany and London,” said Justin Meyer, deputy aviation director for Kansas City.
Before Tuesday’s announcement, KCI’s only international flights were to Toronto; Cancun, Mexico and Punta Cana, Dominican Republic.
The Iceland route also explains why KCI is spending about $12 million on improvements to the international arrival and departure area in Terminal C, even as the facility will eventually meet the wrecking ball for a new single terminal in 2021. Tuesday’s announcement was held in in front of where construction for the international area.
“This flight marks the next chapter in Kansas City’s development,” said Kansas City Mayor Sly James.
Michael Raucheisen, public relations manager for Icelandair in North America, said a flight from Kansas City to Iceland takes a little less than seven hours.
An average of 300 travelers fly out of KCI for trips that eventually cross the Atlantic Ocean. Most travelers connect to Europe and beyond through airports in major eastern seaboard cities.
The route gives leisure travelers in the region a nonstop flight to a booming tourist destination in Iceland, as well as another option to connect to continental Europe.
Kansas City business officials cheered Tuesday’s development. They believe the Icelandair route will help business travelers reach Europe more easily.
Tim Cowden, president and chief executive of the KCADC, said the new route fills a Midwestern gap in Icelandair’s service in the United States.
“There's a big hole right in the middle of the U.S. and Kansas City is going to fill that hole for Icelandair,” Cowden said.
Mike Boyd, president of Evergreen, Colo.,-based aviation consultancy Boyd Group International, said Kansas City’s freight and logistics industries make the city attractive to international carriers.
“(Kansas City) is a major industrial center and business center,” Boyd said. “Take a look at logistics. You've got Interstate 35, I-70, I-29. This hub feeds anybody who wants to go to Europe.”
Icelandair connects to European cities as far north as Helsinki and as far south as Madrid, with several points in between.
KCI and Kansas City business organizations offered Icelandair incentives to help persuade the airline to commit to the new route. KCI agreed to waive landing and airport usage fees for two years that it otherwise charges other airlines to Icelandair. KCI will also award $250,000 to Icelandair for each of the next two years to market the route in Kansas City and to promote Kansas City in Europe.
Also, the Greater Kansas City Chamber of Commerce and the Kansas City Area Development Council and other business organizations are providing an undisclosed amount of stop-loss funding for one year.
The arrangement is similar to an insurance policy: The organization will put up a certain amount of money that will pay Icelandair if the airline loses money bringing KCI travelers to and from Iceland. If the route is profitable, the Chamber, the KCADC and the others aren’t out any money.
Such arrangements are common when cities look to induce new flight routes, particularly to international destinations.
“It’s common,” Boyd said, “and expected.”
Maryland offered British Airways $6 million to keep a nonstop flight from Baltimore/Washington International Thurgood Marshall Airport, according to a report in the Pittsburgh Post-Gazette.
The Indiana Economic Development Corporation gave Delta Airlines $5.5 million in conditional incentives to support three weekly nonstop flights from Indianapolis to Paris, according to a report from Indiana Public Media. Indianapolis, by the way, is considered a larger market than Kansas City and it has a nonstop continental European flight.
Chuck Caisley, a vice president for Kansas City Power & Light and co-chair of the KCADC, said the Icelandair arrangement was better than other commonly-requested forms of subsidy, like upfront cash payments.
“I think what was very intriguing to us is that this is kind of a backstop,” Caisley said. “They believe this is going to be profitable for them from year one.”
The incentives are a way for airlines to hedge risk on new routes. For all flights, particularly international flights, airlines get nearly of their revenue upfront from ticket sales and baggage fees.
Once the door to the plane closes and the wheels come up, the airline is losing money — aside from sundry in-flight sales like gin and tonics — until the flight lands. The longer the flight, the more gas gets burned, the more pilots and attendants are paid and the more risk is borne by the airlines.
“Eight hours of aircraft time is an expensive unknown,” Meyer said.
KCI has awarded incentives — smaller than those given to Icelandair — in the past. Allegiant Air’s route from KCI to the Destin-Fort Walton Beach Airport in Florida was offered $30,000 in marketing support from the Kansas City Aviation Department in 2017. The airline didn’t take the offer.
The Icelandair plane that will serve the KCI-Reykjavik flight is a 183-seat airliner that includes economy and business class sections.
The seasonal nature of the new route is meant to capture summer travelers. While a daily average of 300 travelers leave KCI and end up in Europe, the average grows to 400 to 500 daily transatlantic travelers during the summer months.
Kansas City officials are taking a walk-before-you-run approach with launching transatlantic service with a seasonal route.
“I think it shows the confidence Icelandair has in Kansas City to be able to make this commitment now for the summer season,” Cowden said. “Icelandair believes in Kansas City and, in turn, Kansas City believes in Icelandair. This is a true partnership.”
Meyer said the Iceland route may encourage, rather than preclude, future European flights.
“I don’t see this as us saying yes to Iceland and no to London, but us being engaged and proving Kansas City to Europe works,” Meyer said, “and strengthening my conversations with airlines to say we are an established market to Europe.”
Meyer added that new competition from the Icelandair route may encourage other operators who fly Kansas Citians to Europe through connecting flights on the East Coast to lower their fares.