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New EAS Cities  
User currently offlineJA From United States of America, joined Dec 2004, 577 posts, RR: 1
Posted (5 years 4 months 1 week 2 days 16 hours ago) and read 4942 times:

From the DOT filing:


Essential Air Service at Paducah, Kentucky, Alpena, Muskegon, Hancock and Sault St. Marie, Michigan, International Falls, Minnesota, Tupelo, Mississippi and Eau Claire, Wisconsin

Order 2009-7-16
OST-2009-0160

Issued and Served July 16, 2009

Order Prohibiting Suspension of Service and Requesting Proposals

By this order, the Department is prohibiting Mesaba Aviation, Inc., d/b/a Delta Connection, from suspending service at Alpena, Hancock/Houghton, Muskegon, and Sault Ste. Marie, Michigan; Eau Claire, Wisconsin; International Falls, Minnesota; Paducah, Kentucky; and Tupelo, Mississippi; and requesting proposals by August 17 from carriers interested in providing replacement essential air service.

Mesaba’s proposed termination of service at these communities would leave them with no scheduled service. Thus, the Department must prohibit the carrier from terminating such service at the end of its 90-day notice periods, and require it to maintain 14 nonstop round trips per week (except at Hancock/Houghton, where 13 nonstop round trips are required) to the hubs they currently serve, as specified above. Service above that level, i.e., 14 round trips per week -- except at Hancock/Houghton, where 13 round trips are required -- may be discontinued. All of the service must be with 34-seat Saab 340 aircraft, and must be provided on a nonstop basis -- except at Sault Ste. Marie, where 7 of the 14 round trips may be operated on a one-stop basis. Finally, we will require Mesaba to continue to maintain that level of service at all of these communities for successive 30-day periods until we have completed processing the carrier-replacement case and the selected carrier has actually started service.

We note that the communities’ service needs may be met with 14 round trips a week (13 in the case of Hancock/Houghton) with large cabin-class turboprops such as the Saab 340, or 18 round trips per week with a 19-seat aircraft. If communities are served together, we would consider subsidizing an additional frequency, e.g., three round trips over weekdays and weekends with 30-seaters or four with 19-seaters, However, we would not dismiss any proposal out of hand without first consulting with the community officials. We encourage any proposal that would simultaneously satisfy the community’s needs and minimize taxpayer expenditures.

By: Christa Fornarotto

17 replies: All unread, jump to last
 
User currently offlineRidgid727 From United States of America, joined Jul 2008, 1229 posts, RR: 0
Reply 1, posted (5 years 4 months 1 week 2 days 15 hours ago) and read 4880 times:

I dont think they will get many bids on this. Great Lakes pretty much has their hands full, and very few if any Regionals are out for EAS bids.

User currently offlineBurnsie28 From United States of America, joined Aug 2004, 7557 posts, RR: 8
Reply 2, posted (5 years 4 months 1 week 2 days 15 hours ago) and read 4834 times:

These were all cities that DL said they couldn't serve (though NW did just fine for years) and are trying to get the government to fund these routes.


"Some People Just Know How To Fly"- Best slogan ever, RIP NW 1926-2009
User currently offlineKnope2001 From United States of America, joined May 2005, 2977 posts, RR: 30
Reply 3, posted (5 years 4 months 1 week 2 days 12 hours ago) and read 4682 times:

Here's the average number of total passengers served in April at these airports:

147 Houghton/Hancock
114 Paducah
89 Muskegin
78 Tupelo
69 Eau Claire
64 Sault Ste Marie
54 International Falls
32 Alpena

I get the feeling that Mesaba is just going for a subsidy grab. They don't intend to pull out of these cities, and with few likely reasonable bidders, they probably will get the bids. So they'll get to keep doing what they're doing but start getting bigger EAS payments for it.

Note that all these stations are ones where they are the only airline. If they threatened to pull out of Marquette, for example, where AA* already is, either (a) the DoT would decide AA* was enough and allow Mesaba to leave, or (b) they would put it up for bids, and if AA* wins then AA* gets subsidy and Mesaba either leaves or stays to compete against a subsidized carrier.

So let's for a moment give Mesaba the benefit of the doubt and say that this isn't about a subsidy grab, but that they really are losing money at all these stations. The point of EAS was to make sure that small communities retained a minimum level of service, even if that meant gov't subsidy to offset losses. Well, if a carrier loses money on all their routes, then should all their routes be subsidized? Hancock until recently had two 50-seat RJ's and one 34-seat SF3 each day, none of which were subsidized, and served over 1,000 passengers per week. This is too small a market to support air service without subsidy?

So if this pattern continues, we're going to see one of two things:

(1) The EAS subsidy for relatively high-traffic airports will grow significantly as long-time incumbant regional carriers seek a handout, or

(2) Long-time incumbant carriers will be underbid by small, unbranded regionals, which will in effect kill air service at airports which recently had significant traffic. If, for example, Great Lakes was to win the Muskegon bid, I hate to think what would happen to MKG.


User currently offlineToltommy From United States of America, joined Dec 2003, 3304 posts, RR: 5
Reply 4, posted (5 years 4 months 1 week 2 days 12 hours ago) and read 4682 times:

I wonder if CO might get CommutAir or gulfstream to bid the Michigan cities from CLE?

User currently offlineWingnutmn From United States of America, joined Jan 2004, 650 posts, RR: 0
Reply 5, posted (5 years 4 months 1 week 2 days 9 hours ago) and read 4534 times:

This is DL way of trying to get more funding. Here at XJ, all we do is jump when DL says to. I don't think you will see these cities disappearing any time soon, we just are doing what DL says and if that means threatening to cancel for more coin, then so be it. What will happen is you will see a lot more 1 or 2 leg city pairings instead of non-stops.

Also, with more Saab leases coming up next year, and DL not gaining favorable lease prices, I see more Saabs leaving the fleet. This means that these small cities will suffer even more.

Wingnut



Any landing you can walk away from is a good landing! It's a bonus if you can fly the plane again!!
User currently offlineAvConsultant From United States of America, joined Feb 2006, 1360 posts, RR: 2
Reply 6, posted (5 years 4 months 1 week 1 day 21 hours ago) and read 4327 times:



Quoting Burnsie28 (Reply 2):
These were all cities that DL said they couldn't serve (though NW did just fine for years) and are trying to get the government to fund these routes.

NW did make money on these routes while other routes assisted them, a "rob Pete to pay Paul" scenario. Plus a great fit for the Saab. At the same time, the economic environment has shifted. When the ATA predicts a 20% decline in overall traffic, that's a significant economic hit to these markets. Has the merger not occurred NW would be doing the same thing.

Quoting Wingnutmn (Reply 5):
This is DL way of trying to get more funding.

The airlines are not getting funding from traditional avenues (pax travel). In order to keep the market, assistance has to be provided. It beats an economic kick in the balls of shutting the station. When a community loses air service it's a major economic development blow followed by a cascading negative effect.


User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6694 posts, RR: 24
Reply 7, posted (5 years 4 months 1 week 1 day 20 hours ago) and read 4255 times:



Quoting AvConsultant (Reply 6):
In order to keep the market, assistance has to be provided. It beats an economic kick in the balls of shutting the station. When a community loses air service it's a major economic development blow followed by a cascading negative effect.


Not for most of these cities. There is little in the economy of these markets that justifies any air service at all. If there was, they wouldn't be begging for EAS funding.

The big problem with adding these cities to the EAS pool is that there is only so much EAS money to go around. If you keep adding cities, either the Feds have to steal money from other revenue sources OR steal money from other EAS markets.


User currently offlineAvConsultant From United States of America, joined Feb 2006, 1360 posts, RR: 2
Reply 8, posted (5 years 4 months 1 week 1 day 19 hours ago) and read 4169 times:



Quoting FlyPNS1 (Reply 7):
The big problem with adding these cities to the EAS pool is that there is only so much EAS money to go around. If you keep adding cities, either the Feds have to steal money from other revenue sources OR steal money from other EAS markets.

I agree; however, I think it should all be reviewed. I'm sure there are some markets receiving this money for political reasons.


User currently offlineItalianFlyer From United States of America, joined Nov 2007, 1099 posts, RR: 2
Reply 9, posted (5 years 4 months 1 week 1 day 18 hours ago) and read 4088 times:

Just throwing this out there: does anyone think its a matter of time where some investors pick up some 340Bs, EMB120s or even Metros & Jetstreams and start an operation (possibly coast to coast in scope over time) that connects EAS & municipal subsidy cities to hubs? It seems that there is allot of federal, state and city public money out there for the pickin'. Just codeshare with everyone...kind of an incarnation much smaller than Alaska but larger than Great Lakes.

User currently offlineRidgid727 From United States of America, joined Jul 2008, 1229 posts, RR: 0
Reply 10, posted (5 years 4 months 1 week 1 day 17 hours ago) and read 4071 times:



Quoting ItalianFlyer (Reply 9):
Just throwing this out there: does anyone think its a matter of time where some investors pick up some 340Bs, EMB120s or even Metros & Jetstreams and start an operation (possibly coast to coast in scope over time) that connects EAS & municipal subsidy cities to hubs? It seems that there is allot of federal, state and city public money out there for the pickin'. Just codeshare with everyone...kind of an incarnation much smaller than Alaska but larger than Great Lakes.

I doubt that will ever happen, as these carriers have a difficult time even turning a profit on what the govt gives as EAS subsidy. While I think ZK has turned some profits recently it is not very much. Cape Air has found a niche with their 9 pax aircraft, and seems to be doing OK, but operating cabin class aircraft and all that goes with it definitely dilutes the yields


User currently offlineAVLAirlineFreq From United States of America, joined Jun 2008, 1070 posts, RR: 0
Reply 11, posted (5 years 4 months 1 week 1 day 16 hours ago) and read 4017 times:

There's one thing I don't understand about the EAS requirements:

Quoting JA (Thread starter):
All of the service must be with 34-seat Saab 340 aircraft, and must be provided on a nonstop basis -- except at Sault Ste. Marie, where 7 of the 14 round trips may be operated on a one-stop basis.

Is anything other than nonstop service considered a demand deal-breaker by the airlines and the communities involved? Given that the loads on many EAS flights are so low, would it further weaken the economics of the flights to do one-stops with other EAS or small communities?


User currently offlineRidgid727 From United States of America, joined Jul 2008, 1229 posts, RR: 0
Reply 12, posted (5 years 4 months 1 week 1 day 16 hours ago) and read 4004 times:

The allready do that in some markets.

Quoting AVLAirlineFreq (Reply 11):
Is anything other than nonstop service considered a demand deal-breaker by the airlines and the communities involved? Given that the loads on many EAS flights are so low, would it further weaken the economics of the flights to do one-stops with other EAS or small communities?

That is the case in some markets.
For instance, Ely NV (ELY) to Moab UT(CNY) to DEN
Farmington NM (FMN) to Page AZ (PGA) to PHX
Sydney MT to Glendive MT to BIL
Huron SD to Pierre SD to DEN

These are just some examples, and there are many more.


User currently offlineIMissPiedmont From United States of America, joined May 2001, 6326 posts, RR: 33
Reply 13, posted (5 years 4 months 1 week 1 day 16 hours ago) and read 3974 times:

The US government will never understand that adding more money to a wasteful idea solves nothing. In this economy why would they add more? Oh, pork barrel spending thrives. Sad.


Damn, this website is getting worse daily.
User currently offlineMpdpilot From United States of America, joined Jul 2006, 996 posts, RR: 0
Reply 14, posted (5 years 4 months 1 week 1 day 14 hours ago) and read 3885 times:



Quoting IMissPiedmont (Reply 13):
The US government will never understand that adding more money to a wasteful idea solves nothing. In this economy why would they add more? Oh, pork barrel spending thrives. Sad.

If the point of EAS was to allow airlines to make a profit then I would agree with you. But the only reason the government gives money is to ensure that cities recieve air service, which has been shown to help the local economy. It isn't a wasteful idea if the economy actually is helped by it, which I think you will find happens more often then not. Now I do think that some of these cities should be looked at to determine if the EAS is still needed. Being from Wisconsin, I would say that Eau Claire is pretty close to Minneapolis and might not need direct air serice. On another side of things Sault Ste Marie is several hundred miles from any major city so there is a case for them to maintain the service.



One mile of highway gets you one mile, one mile of runway gets you anywhere.
User currently offlineOP3000 From United States of America, joined Jun 2009, 1783 posts, RR: 2
Reply 15, posted (5 years 4 months 1 week 1 day 11 hours ago) and read 3799 times:



Quoting Mpdpilot (Reply 14):
Being from Wisconsin, I would say that Eau Claire is pretty close to Minneapolis and might not need direct air serice. On another side of things Sault Ste Marie is several hundred miles from any major city so there is a case for them to maintain the service.

Yeah, IMHO they are trying to package a few destinations on here that are not deserving/needing EAS, based on the intended purpose of the funding. In some of these cases, perhaps the airline can seek out local funding as they have for the PDX-NRT route (surely DL will tbe satisfied with a whole lot less than the 3.5 million they got there).


User currently offlineAVLAirlineFreq From United States of America, joined Jun 2008, 1070 posts, RR: 0
Reply 16, posted (5 years 4 months 1 week 22 hours ago) and read 3653 times:



Quoting Ridgid727 (Reply 12):
Quoting AVLAirlineFreq (Reply 11):
Is anything other than nonstop service considered a demand deal-breaker by the airlines and the communities involved? Given that the loads on many EAS flights are so low, would it further weaken the economics of the flights to do one-stops with other EAS or small communities?

That is the case in some markets.
For instance, Ely NV (ELY) to Moab UT(CNY) to DEN
Farmington NM (FMN) to Page AZ (PGA) to PHX
Sydney MT to Glendive MT to BIL
Huron SD to Pierre SD to DEN

These are just some examples, and there are many more.

So why the nonstop requirement (and the equipment requirement) on these routes? Is it simply because this is written expressly for Mesaba/DL?


User currently offlineKnope2001 From United States of America, joined May 2005, 2977 posts, RR: 30
Reply 17, posted (5 years 4 months 1 week 14 hours ago) and read 3512 times:



Quoting AVLAirlineFreq (Reply 16):
So why the nonstop requirement (and the equipment requirement) on these routes? Is it simply because this is written expressly for Mesaba/DL?

No, as part of the deal back when deregulation was approved, the DoT specifically defined the minimum level of air service ensured at dozens and dozens of airports. They didn't do it for all airports, but anything roughly the size of Des Moines, Colorado Springs, or Roanoke and smaller had minimum levels of service defined. Airports far larger than what we tend to think of as EAS markets are covered under the program.

In every case, a minimum level of service was defined, in terms of :

(1) How many flights per week
(2) How many stops are allowed enroute
(3) What hubs they can serve

For example (and this is from memory since I can't seem to find the list online tonight) Wausau/Stevens Point (CWA) minimum level of air service is at least 3 flights per day, all of which are nonstop, to ORD, MSP or MKE. As long as the airlines flying to CWA have at least three nonstop flights to any of thsoe three hubs, CWA's minimum level of air service has been met.

For the largest airports with minimum-defined levels of air service, "minimum" may be more like 4 or 5 nonstop flights serving at least two hubs. For the very smallest, most remote destinations the minimum level tends to be 12 flights per week, either nonstop or 1-stop, to a hub, with 15-seat aircraft.

These "minimum" levels of service are not totally inflexible. For example, the DoT can designate what they are looking for based on the historic traffic of a community. Note in the original posting of this thread, the DoT states that for Houghton/Hancock, two round trips is adequate if planes in the 30+ seat range are used, if instead 19-seat class planes are used it needs to be 3x. And if communities are combined (so they must share 19-seat planes) then at least 4x/day is necessary. It's also possible for communities to petition for certain things or grant waivers. For example, let's say Great Lakes bids for Houghton-Milwaukee, but Houghton's "defined" eligible hubs are MSP, ORD or DTW. If Hougton favored the bid go for that service, they'd have to request that MKE be added as an alternate acceptable hub airport. Or...say that Alpena got a bid from Cape Air to fly 9-seat Cessna to Detroit. EAS requires at least 15-seat aircraft, so Alpena would specifically have to notify EAS that they would waive the 15-seat minimum to allow the Cape Air bid.

So...to sum it up...what the DoT requires as "minimum" service is defined airport by airport, not by airline. It is something defined years ago, but there is some flexibility based on circumstance and based on the more recent history of the local market.

Note that you'll sometimes see airlines file notice of discontinuing service even when there's no subsidy. For example, Marquette MI has NW* to DTW and AA* to ORD. If AA* dropped MQT, they would file notice with the DoT they were dropping MQT. Almost certainly, however, the DoT would tell AA* they were allowed to discontinue service becuase NW*'s MQT-DTW service meets minimal levels. So not every EAS filing is about subsidy.


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