BILLINGS -- Kevin Ploehn got a good idea of how tough times are for the airlines when he met with some industry representatives last week. Rather than paying to fly in for their usual face-to-face chat, they made a conference call.

"It's definitely tough times. There's a lot of doom and gloom out there," said Ploehn, assistant director of aviation and transit for Billings Logan International Airport.

Ploehn said traffic was down about 10 percent so far this year compared to 2008, adding that the industry is likely to cut flights at airports nationwide after the summer travel season.

Carriers are asking for help from Cody and other communities in the form of revenue guarantees -- subsidies that ensure a profit. Because the city of Billings owns and operates Logan, it has never subsidized airlines and isn't likely to start, Ploehn said.

And since Billings is the major air travel hub in Eastern Montana and northern Wyoming, Ploehn said he doesn't expect to face nearly the same struggle to maintain flights as airports in cities like Butte, Helena, Sheridan and Cody.

"It's going to be really tough for places like Cody and Sheridan to get by without subsidizing service," he said.

"It's a tough nut for small communities, and we're seeing that all over," he said, adding that Butte may be "in the worst spot of all of them" because it is surrounded by larger airports in Missoula, Bozeman, Helena and Great Falls.

City officials in Butte were shocked last year when Horizon Air announced they were canceling service, leaving Delta as the only carrier, said Jim Smitham, executive director of the Butte Local Development Corp.

"We had been out to meet with Horizon about nine months prior, and everything was fine," he said, adding that "there was no indication from Horizon there was any problem."

Local leaders discussed the idea of a revenue guarantee or a ticket bank, where businesses would buy a large number of tickets at a fixed price and redeem them throughout the year, ensuring large advance sales for the airline.

"But they didn't want to meet. We had to actually get our congressional delegation to insist that Horizon come in and sit down with us," Smitham said.

Airline representatives said their analysis showed that a $600,000 subsidy would be the only way to make the flight profitable, and decided to assign the plane to a different route without offering the city a chance to raise the funds, Smitham said.

The community has since raised $65,000 for future subsidies, but for now, leaders are working with Delta to add a third daily flight, rather than trying to recruit another carrier during the current recession, he said.

Smitham said Butte's Bert Mooney Airport has trouble competing on price and schedule against nearby airports, including Gallatin Field in Bozeman, 85 miles away.

Helena and Bozeman both subsidize airlines, with a group of businesses around Big Sky chipping in hundreds of thousands of dollars to help fund daily flights by large jets to bring skiers from Atlanta, he said.

Most businesses in Butte seem to be coping well with the loss of Horizon Air, Smitham said.

"We have not seen any detrimental effects on economic development as far as recruiting businesses, but we do see a dollar drain going to other communities," he said, adding that the town loses hotel stays, restaurant meals and other business as some visitors instead fly through Helena or Bozeman.

"It has been problematic, but I haven't seen a decline in my bookings," said Steve Gallus, a state senator for District 37 and lodge manager at The Complete Fly Fisher in Wise River, about 40 miles southwest of Butte.

"I have seen an increase in people flying to Bozeman and Missoula. And with my business, I offer transport to and from the airport as part of our weekly package. So the time and money and fuel and employees to retrieve people from those airports" has increased, Gallus said.

Smitham said concerns in Butte have focused on how the loss of competition from Horizon Air might mean higher rates from Delta, which could lead to fewer passengers and an eventual downward spiral for the airport.

"To have good air service is essential, no matter what," he said, adding that Butte airport managers constantly monitor fares at nearby airports, and advise Delta on significant price differences so the airline can adjust rates.

Until air travel picks up nationwide, Butte will be careful about offering subsidies, because "it does no good to get an airline into a situation where they're losing money and we're losing money," Smitham said.

"The first thing that's got to happen is our airline industry has to get healthier. This industry is on its heels, and most of them are in a mode of trying to make sure they can survive," Ploehn said.