And I haven’t abandoned this blog… I’ve just had a lot on my plate and its finally getting cleared off! So please keep this site bookmarked and I’m hoping to do an update this week – had a few movements that are interesting. And hopefully we’ll have an airline for Alpena, Michigan in the near future!
Guess I was wrong….
April 13th, 2012
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Well maybe I spoke too soon. The bids for the Mid-south closed and a Part 121 DID bid… and interestingly enough it was Silver (Mid-South are Greenville, Laurel/Hattiesburg, and Tupelo Mississippi and Muscle Shoals, Alabama). Air Choice One also put in another bid for these markets, with service to Memphis. ACO’s bid is interesting in that the airline plans on upgrading to Part 121 certification and fly the Jetstream 31/32. The bid starts out using Part 135 aircraft and then upgauging year 2 into the J31s. They’re doing the proper homework as the aircraft was bid using 18 seats (you really can’t get 19 passengers and bags in that thing anymore!). I swore I also saw a bid for an 8 seat J31, but I’m assuming that was only a typo. While ACO provided a variety of bids, I’m not sure the communities will go for it because Silver Airways put in a bid. These communities have dealt with at least 2 other ACO bids, so if they had any support, I don’t think they’ll get it with Silver in the mix.
Silver took me by surprise for a number of reasons. First off, they have been growing very organically and have been doing small steps in terms of growth. The Mid-South markets will represent 2 aircraft with access to a 3rd via Gainesville. The airline is hoping to get a Delta ‘super interline’ or even a codeshare, but they plan on using the Island Air codeshare in its bid. Secondly, Delta previously told Silver (when it was Gulfstream) they would not partner with them on using 1900s into Memphis, but now they’re proposing Atlanta service with the Saabs. And lastly, because they’re bidding using the Saabs, one can assume that the company will transition any Florida/Bahamas Saab flying back into the 1900 and use those Saabs for this operation… so those islanders just getting used to this plane will go back to the 1900s.
Source: airliners gallery photo by Tony Storck
The interesting aspect of the bid is Greenbrier/Lewisburg West Virginia- they are proposing this service to operate into Atlanta instead of Dulles. And the ONLY bid for LWB was with Silver into Atlanta.
With Silver well aware there aren’t many players in the field, they went a tad high on their EAS bid, and frankly I don’t blame them, but we’ll have to see if it fits the EAS budget. Silver put out 2 proposals, one for $16 million and another for $14 million and change. I can assure you the DOT will only look at #2. So I’ll focus on that one.
The markets would get 2 flights a day (for the most part) in and out of Atlanta. The Silver bid is significantly higher than what Delta is presently getting – $8 million for all 5 markets. The biggest increase appears to be for Tupelo, with a bid clocking in at $3 million (vs the current $921k). Greenbrier/Lewisburg doubles to $4 million and change, Greenville is the only bid that stays about the same – at $1.7 million. Silver bid these routes as close to the $200 cap as they could get, and the block hour cost for the Saab 340b comes out to a range of $2307 to $2419. The plane typically costs $1700 to $2000 to run, however with fuel running amuck as it has, I don’t blame Silver for bidding a ‘safe’ bid.
So we’ll see if this safe bid by Silver is within the financial limits of the DOT as the bid does meet all the criteria of the EAS program.
I was also going to write about the EAS bids for Excursion Inlet & Kake, located here in Southeast Alaska. However while doing my research, one of the airlines graciously pointed out some errors in the T100 data so we’ll see if those get fixed.
Quick Review
April 10th, 2012
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Its been a fairly drama free week in the DOT’s EAS group.
Alpena, Michigan – which I’ve spent a bit of time on, has sent the DOT a letter explaining their position. The DOT has always been a bit relaxed when it comes to defining the number of flights for Part 135 operators (8/9 seaters) and the letter addresses it. I think its a smart move, may not help Alpena out, but it will be beneficial in the long run. One of Air Choice One’s proposals is only for 3 flights a day and the other for 4. The City realizes it may end up with ACO, so they’re trying to leverage getting 4 flights a day. A handful of bids have used the loose language discussed in the letter…
DOT Order 2011-9-5, the original RFP regarding Alpena and the other Delta cities, page
6, “At all other communities (this includes Alpena) we are requesting two nonstop round
trips per day (12-14 per week) at each community if 30-seat or larger equipment is
proposed, two or three trips per day (12 – 18 per week) with 19-seat aircraft; and more
frequencies with smaller aircraft
Order 2011-11-20 requesting another round of bids at Alpena; page 4, “For example, we
would entertain proposals with 8/9-seat aircraft and as many as four or five round trips
per day (24 to 30 a week)
That’s exactly what happened to Athens, Georgia – Air Midwest/USAirways Express flew only two flights a day to Charlotte, and when I proposed the bid with Vintage Props & Jets, we proposed 3 to 5 flights a day as the RFP referenced ‘at least two’ roundtrips a day. Pacific Wings bid the market using only 2 flights a day as that was the requirement, however it should have been at least 3.
Alpena’s in a bad spot because Delta can’t seem to make the numbers work to fly a jet in there – at least that’s what my sources say. Alpena could turn into an EAS-bashing poster child should Delta bid…. so they’re hunting for *anyone* with a turboprop and someone else’s logo on their tail.
DOT sent out the West Virginia markets for comment. Just like Johnstown & Altoona, Silver has bid on these markets contingent on United allowing their code to be placed on these flights.
For Morgantown and Clarksburg, Silver proposes 18 nonstop or one-stop round trips per week to Washington Dulles International Airport for an annual combined subsidy of $3,456,250. Flights would stop in either Morgantown or Clarksburg en route to or from Dulles. For Beckley, Silver proposes 13 round trips per week (7 nonstops and 6 onestops at an intermediate point to be determined at a later date) to Dulles for an annual subsidy of $2,664,565. The service proposed is one additional round trip per week more than what the Department requested for Beckley. As result, in its proposal, Silver “would be amenable” to providing 12 round trips at a prorata subsidy adjustment. All service to the three communities would be operated with 34-passenger Saab 340B+ aircraft. Silver states that it is proposing to operate flights under its existing codeshare with United Airlines, however, a definitive agreement had not been reached at the time of filing and, therefore, the proposal is contingent upon that agreement being finalized. We are currently reviewing Silver’s compensation requirement.
So this will be a wait-and-see by the DOT. Should Silver not be awarded the United code, these markets will go out for rebid. The problem with these markets are they are a bit far from Washington Dulles – the current largest “hub” that is within distance of these markets, so it will keep the Part 135s out of these cities. The bid I was working on for the Pennsylvania markets were with flight times right around an hour – that’s about the longest you want to be in a Caravan, and West Virginia from Dulles would easily clock in at 90 to 110 minutes in a Caravan or twin piston. Pittsburgh is ramping up its PIT Connect program again, with hopes of having intra-state flying, but there just isn’t as much traffic to connect with at Pittsburgh.
DOT also locked Delta in at Greenbrier/Lewisburg, West Virginia. This has been an interesting market as it *should* be doing better than it is. However there have been some marketing problems with the resort/casino and fuel prices have been keeping the flyers away. I sense this market will be bid by Silver as well, which I believe has weekend flights to Cleveland in Beech 1900s.
And an airport (2) wakes up…
April 5th, 2012
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During the day, I check airlineinfo.com and look at the dockets (not to push them too much, its a GREAT service if you have an interest in EAS or DOT matters regarding airlines). Something came up today that interested me, and I also must disclose this could benefit one of my consulting clients, but I’ll talk about that towards the end.
The cities of Altoona and Johnstown, Pennsylvania are up for EAS as Colgan/Pinnacle draws down their United Express flying and Saabs. Silver was the only one to bid, and its contingent on United Airlines approving the Silver operations in and out of Washington Dulles. The bid was pretty much status-quo, with 3 flights a day to Washington Dulles (mostly round-robin flights, making a stop in one market or the other). Their bid was about $4 million to service both. I’m curious as to why Silver didn’t include a bid to Cleveland as another option.
The airport boards/committees at the airports recently submitted questions to the DOT and they are very well thought out questions. Link here. I am in no way endorsing Silver or using this blog as a platform for the bid I worked on, I just found the letter very interesting.
Some of the more interesting questions have to deal with their subsidy and service:
Building a Self-Sustaining Environment
1) Is funding available for a thorough, professionally executed market research effort to assess air travel demand and determine the customers’ priorities (e.g. reliability vs. price). How can communities such as ours gather data about our needs and priorities so that a fact-based, market-driven strategy can be developed to elevate enplanements?
2) Are there examples of communities who have “graduated” from EAS funding scenarios? How did they do it?
These airports are tired of getting beat up in the press over EAS and want off it, but they want off in a legitimate manner. The second question will bring some interesting answers, as most of the cities removed from EAS were not done for economic reasons at all, but political maneuvering. Delta/Northwest Airlink has done well in a few markets and did remove Columbia, Missouri from the program. So it is possible.
Another question brings up a good point:
4) How is the airline held to the standards established for the service? What are the remedies if performance does not meet standards? To whom does the airline answer? Us? DOT?
The answer here isn’t a pretty one. DOT really doesn’t do much to punish EAS carriers. They can, however, make it more difficult for other airlines to bid on future awards, however we’ve seen some carriers really do significant harm to the markets they win. When an airline starts losing money in an EAS market and it turns significant, the operation doesn’t hold up well – RegionsAir is a prime example of where an airline got in over its head and under-estimated expenses. While the St. Louis operations always did well, the venture into the Saabs are what killed the airline, and did quite a bit of damage to the West Virginia markets. Sometimes promises aren’t kept, such as Great Lakes and the St. Louis operations – while Cape Air won the subsequent bid and successfully worked out a deal with American for a codeshare, and are now transporting the same, if not more, than Regions Air did as American Connection.. and this is to a former mega-hub. Great Lakes tried to make the markets work, but load factors plummeted under their flag. Fortunately Great Lakes survived and seems to be doing much better.
1) Should we solicit additional bidders?
Yes! I gotta come clean and state that I had worked on an EAS bid for these two markets which would bring up some interesting proposals. So note the happy face… while I’m not certain the communities would like smaller aircraft, I’d be more interested in seeing their feedback. But on a serious note, it is up to the DOT to determine a new round of bidders. Even if the communities reject the Silver bid, it meets the requirements of the EAS program. The only reason I can see DOT putting this out for rebid is if they reject the subsidy rate by Silver, or if the airport boards show compelling facts as to why they don’t want Silver.
9) Johnstown and Altoona have an unusually high number of low IFR days. What commitments can Silver Airways make to ensure that Johnstown and Altoona flights are consistently crewed by experienced pilots who are qualified to fly the airports instrument approaches at no less than circling minimums?
This brings up some interesting comments – apparently they have issues with Colgan. Weather can hurt anyone touching the airport and constant bad weather will force more people on to the roads.
4) Are there standards to which Silver Airways will perform that can be expressed in terms of metrics, e.g. percentage of completed flights, percentage of on-time flights? If the standards are established as part of the EAS program, should the Silver Airways proposal at least reference them and make an affirmative commitment to adherence? Can monthly meetings be scheduled to evaluate performance and discuss additional needs? Can the airline provide statistics for its performance of service at other airports?
I wish more airports would ask this question. Its one that should be made more public rather than at executive sessions or behind the scenes conversations. Some airports slide in letters of praise from other airports and customers in their bids, which is always a nice thing to see.
1) Is this a valid proposal? It is contingent upon a codeshare agreement between Silver Airways and United Airlines, which is not in place. This means that an actual proposal was not received by the deadline.
Actually Silver does operate as United Express. However United sets the flight number series and may require approval before Silver performs any additional flying using the UA code. This is also one of the main reasons why the Silver Montana flying is performed under the Island Air code. I am aware of problems back in the day with Gulfstream and Continental (prior to the corporate changes at both) where Continental ran out of flight numbers for Gulfstream. So this bid is good unless United says no to operating these markets as United Express.
I figure we’ll see a response from Silver in the next few days, and I’ll be keeping an eye on this one – mostly for my own curiosity rather than gain for a possible client.
And info trickles out…
April 2nd, 2012
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source: houstonspotters.net
So we know a few things about the Pinnacle bankruptcy:
- Delta is BACK in the driver’s seat
- No more United Express flying
- No more USAirways Express flying
- No more Saab flying
- No more Dash 8 flying
- The Dash 8 Q400s will be transferred to another airline, but it is not known who. I seriously doubt that Horizon Air will be flying as United Express anytime soon as the hate between Alaska and United is a very well known fact. Republic is extending their Dash 8 operations into the summer, so there’s a chance Bedford & Co may pick it up. I don’t think Commutair is ready to add 30 planes to its fleet as they are still trying to make what they have work. I wouldn’t be surprised to see ERA (of Alaska) look at this – its been a few years since ERA’s 4 independents merged into one banner so they could be ready for some growth, and the Q400s on ERA’s cert could open some interesting discussions with partner Alaska Airlines out of Anchorage.
Based on open dockets with the DOT, some of which have been open since JULY 2011, the following markets are currently at risk (and their subsidy amount in millions):
- Muscle Shoals, Alabama – $1.7
- Alpena, Michigan – $1.5
- Greenville, Mississippi – $1.6
- Laurel/Hattiesburg, Mississippi – $1.4
- Tupelo, Mississippi – $0.9
- Altoona, Pennsyvlania – $1.7
- Johnstown, Pennsylvania – $1.7
- Victoria, Texas – $1.8
- Staunton, Virginia – $2.2
- Beckley, West Virginia – $2.3
- Clarksburg, West Virginia – $1.5
- Morgantown, West Virginia – $1.5
Silver Airways has put in a bid for Altoona & Johnstown, Pennsylvania with “status quo” service into Dulles and will probably win that award – depending on United allowing Silver to fly into Dulles. I’d also then add Staunton and the remaining West Virginia markets to that list. I don’t see Silver adding much more – this is NOT the same Gulfstream as before and they will make very calculated and conservative moves. The airline will not double its fleet overnight in the name of business, let alone risky EAS business. That leaves Alpena and the mid-south markets as the questionable ones. A handful of FAA Part 135 operators have been bidding on all these markets and the communities keep rejecting them – although DOT told Alpena this is the FINAL RFP and they are inclined to award it to Air Choice One should no one else bid on the market.
Great Lakes is also an unlikely bidder – they learned their lesson from overexpansion (almost killed the airline, again) so I think they’ll stick with the Minneapolis flying. Not sure who else is left. Vision Airlines could come out of left field and bid using the Dornier 328 props on all these markets and probably win by default. PenAir is adding a few Saabs to their fleet – they recently were awarded some Boston flying and the airline also has a Saab flying in Hawai’i on behalf of Island Air.
Something has to happen, and fast. Pinnacle is dead set on parking the Saabs, with the last one leaving the fleet in July of this year, which means the DOT awards have to be done *NOW*. Otherwise I see a handful of cities having NO air service at all for a while.
My recommendation: go with the Part 135s. They’ll be a lot more cooperative and have more to lose than another airline. And you’ll at least have a plane on the tarmac on August 1.
Interesting start for the week…
April 1st, 2012
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After months of speculation, Pinnacle Airlines filed for Chapter 11 bankruptcy protection. I’m not sure how I feel about this, as this company has been a “mess” for some time now. Its even called Pinacolaba on the pilot message boards. Pinnacle / Mesaba / Colgan are what make up this banner. Delta Air Lines has provided for the DIP financing, and its an odd move considering that Mesaba used to be owned by Northwest Airlines as was Express I Airlines (now called Pinnacle).
What does this mean? Well, if you are a small community seeing Colgan Air’s Saabs – your service may end sooner than you’d like. I suspect we’ll have a lot of nervous communities – such as Alpena, Tupelo, Muscle Shoals, Beckley, and others who haven’t been awarded yet.
There is an interesting quote that caught me by surprise:
The remaining Saab 340 fleet that Colgan operates for United Express will be wound down over the next several months, with these operations projected to end by Aug. 1, 2012. Similarly, Colgan’s Q400 aircraft operations will be wound down by Nov. 30, 2012
Did I read that right? Q400 aircraft operations will be wound down by November 30, 2012?!
I guess this is where I’m scratching my head, as I assumed that United was happy with the Dash 8 Q400s – and reading this statement makes me wonder what is going on. I know that Pinnacle has meant to get rid of Colgan (name) since the Buffalo crash, but this has me wondering if they are ending the Q400 program, entirely.
Could this be the end of the props at Colgan? Is Commutair going to be picking up all the prop flying, outside of Silver, for United Express??
Its another quiuet week…
March 30th, 2012
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Well sorry about the godaddy issues the other day. I pay for this sucker out of an account I keep a $0.00 balance in – this way if someone steals my credit/debit card they can’t do any damage! Well stupid me forgot to fund it, but all is good now!
Its been a bit quiet on the EAS front this week, just a lot of docket movements on the DCA Slots. USAirways held out quite the strategic move by being the LAST legacy airline to announce what it was doing with its sole slot – by adding San Diego. By doing this, USAirways was able to look at every route that all the other guys applied for and trump them. So there’s obviously no love for Alaska Airlines, as USAirways announced it was going to start San Diego to DCA. USAirways could have went pretty much anywhere in their network, but SoCal it is (REAL SoCal).
American Eagle is still leaving a lot of questions unanswered as AMR has said they are going to shrink the airline. As airlines rushed to get rid of their 19-30 seat props, they’re now rushing to get rid of 50 seat jets, and this won’t bode well for smaller communities. Even though Embraer has kept all the tooling for the Embraer 120, there are no small props being built anymore. I believe the smallest is the ATR 72. Gippsland from Australia is now working on a 15-20 seat twin piston and its caught the interest of some airlines, and Viking Industries is rebuilding the successful Twin Otter. So there is still hope that air service can be restored/maintained once the regional jet era comes to an end.
Changing pace…
March 20th, 2012
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I’m on a roll lately!! I’m finding a bit more free time as a major project for the City of Juneau is done and my airline client’s PNR transfer is finally complete, so that means more time to write!
Today is going to take a different spin – I’m going to talk about a new upstart airline.
Sorta.
Call it PE2. People Express Part Deux. One more time. If it doesn’t work the first time, try try again.
So the DOT made most of their application public today, and the items that were redacted sort of confused me as some of it is publicly available data. They try to hide items in the written portion of their application but make it obvious in others.
So here’s the run down: Some folks got together, saw Air Tran leave Newport News, Virginia (which I might add does have a decent MSA to pull from) and thought “oh lets do it our way”. Many of them previously worked for People Express and it’s a catchy name, so viola.
Add in that airlines are parking 2nd generation 737s and you have some decent financials on paper (but operating is a different story.
Their goal is to “People express will rekindle the excitement of flying by introducing a brand new low-fare, low-cost passenger airline that will provide high-quality customer service with a highly productive and incentivized workforce.” Ok, so how do you do that, cause I’ve been trying it for 12 years. You can’t really have low-cost and high-quality in the same sentence. Midwest Airlines. Frontier. Ultrair. Kiwi International Airlines. “Highly productive and incentivized workforce” means that the staff will get low wages and only make more by going above and beyond, or by selling you crap. I don’t see this mixture working. High Quality means HAPPY people, and happy people typically means EXPENSIVE benefits or HIGH pay. You don’t get “high quality” at $20,000 a year. Ask Alaska Airlines that. They pay their staff pretty good and have higher labor costs, but they’re also one of the better airlines around. I work for the State of Alaska and my benefits are what makes me happy (awesome health/dental/vision/life insurance and 13% of my income goes into my retirement). My benefits cost the state an extra $1,300 a month on top of my pay. So there’s no way an airline will offer anything even REMOTELY close to that (although with Obamacare coming up, it wouldn’t surprise me to see PE2 not even offer insurance since the government will be able to, so there’s significant savings there).
So… counter agent will be making $8.50 an hour and make 5% commission (only guessing) on stuff he tries to sell you. Not sure how chirpy he’s going to be. Unless they teach everyone “We love you, but we love your money more” in customer service training. And being a “highly productive, cross-utilized and incentivized workforce” means that your flight attendant will also be boarding your flight and checking you in, if not throwing your bags as well. Island Air in Hawai’I operates like this, however agents may work 1 day at the airport and the next as a flight attendant.
So right there I have an issue with their application. Its dreamy. Its perfect world-y. If they pull it off, freaking amazing, I’ll eat my shoe.
“Low prices and high quality service should not be mutually exclusive.” But it is.
The plan is to have a 3 tier pricing structure, similar to what you see now at Frontier Airlines. They plan on letting passengers fly with 2 bags for free and drinks & munchies will be free on a plane. I’m still trying to see where the low-fare option comes in, but these are nice perks to have.
So the airline is going to base maintenance and operations at Newport News, courtesy of some attractive subsidies/waivers. We know they are going to focus on Pittsburgh and Orlando. Their goal is to link these markets in the northeast which lack large jet flights or have little to no nonstop service. Their DOT authority application lists Providence, Newark, and West Palm Beach – so we know 3 markets for sure. The FAA paperwork adds Boston to the list. At least we aren’t seeing JFK.
The chosen equipment is the Boeing 737-400, seating 158 in single class (application states 150). I am guessing that passengers can expect a 32” seat pitch, so your knees may get a tad more breathing room. The airline is proposing a very aggressive delivery date, receiving the first two planes in May 2012, followed by 1 in June, July, and again in November, December, and January. What I do like is their plan to keep at least one plane available as a hot-spare or maintenance swap, so 7 will be flying the line and 1 sittin around.
The folks have raised their seed capital, but that’s about it. They have a commitment from a major investment banking firm to raise the necessary capital and then perform a prelaunch offering. Sounds like Baltia, and they aren’t quite there yet (they’ve also had their own 747-200 for a few months now as well). The plan is for the first year to have $90.1 million in expenses, which then comes down to a DOT requirement of $27.9 million in liquid assets (cash!). Out of 100 million shares, only 7.6 million have been dispersed, and those appear to be for the current management team. Its hard to tell if everyone is working off “sweat equity” or they had to pay in to get this going. You do get better decisions from people who have ownership in their project.
There’s some interesting history behind the people at PE2. The chairman is a partner at Park Avenue Equity Partners in New York, followed by the resume of someone who doesn’t appear to be the same person, with experience as the president of MaxJet, a ‘high quality’ operator that vanished in the mid 2000s. This same person has plenty of experience with widebodies in the cargo operation and was with Pan Am and People Express. The president, Michael Morisi, had 6 years at People Express and then was with charter operator Leisure Air between 1991 and 1995.
This doesn’t appear to be a new bunch of folks, I’d probably call them kiwis. They are deeply in love with their industry and see this as a way to get back in. Its hard to judge if this airline will make it, the finances are mostly hidden, so its hard to see how real or unreal they are. I do think its going to be VERY difficult to make a profit in the 4th month, but I’ve been wrong before. The year end totals don’t give me much room to see the nitty-gritty.
My take – I think this is a neat idea but I’m borderline pessimistic about it. I’m just not sure how well the PHF focus will work. I think PIT is a great idea, and there’s definitely some growth out of PBI.
Talk about remote…
March 19th, 2012
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One of the fascinating aspects of living in Alaska is just how BIG my state really is…. I heard a joke the other day “How do you piss off a Texan? Split the State of Alaska in two and tell Texas they’re now the 3rd largest state!” . EAS has been a lifeline up here, and in many communities the airline provides everything – mail, pizza, money, and even sometimes gas. There just aren’t many roads up here, and you can’t even get boats/barges into most of the communities until April.
What is interesting though, is that Alaska only gets a *small* portion of the overall EAS funding considering the size and significant number of communities. Part of it is that these communities really could care less if they are in a Cessna 206 vs 207, and you don’t have to be an Alaska Airlines codeshare partner selling seats on kayak.com. Many of these communities just want to be linked. People want to know they can get out of town and somehow end up in Anchorage at the Taco Bell on Northern Lights Blvd.
So this brings me to the LONGEST EAS route in the system – Anchorage to Adak. Adak is a former military stronghold and its the furthest west point of the US (and Alaska). The island doesn’t really have a lot going on for it, but it gets 2 flights a week on Alaska Airlines Boeing 737-400s into Anchorage. Its a 1,192 mile trip taking a little over 3 hours to this remote spot costing taxpayers $1,675,000 a year (total Alaska EAS is about $13 million).
The market only gets about 3,500 passengers a year – so you can see that flying a 70/150 seat 737-400 is a tad overkill for this route, but there really isn’t much else that can fly this market. Alaska isn’t flush with RJs and the optimal aircraft – the EMB 170/190 doesn’t touch Alaska. PenAir seems to be the only guy interested, and they proposed an $850k subsidy to offer 5 flights a week making a stop in its Saab 340B’s. Unfortunately the State of Alaska squashed that idea, and now Alaska has said it doesn’t plan on resubmitting for Adak. So now we’re back to PenAir.
I suspect we’ll see PenAir ultimately come into our former military stronghold. Questions remain if the planes will make a stop in Cold Bay or King Salmon – I’m suspecting a trip like this will be about 5 hours each way, and the Saab isn’t the first plane that comes to mind when I think about a 5 hour flight. The owner told me they’ve been considering the Saab 2000, but that was a few years ago – they have the cash, so obviously something isn’t panning out. And I honestly don’t see the Horizon Q400s landing in Anchorage for a few years.
Markets like this are a prime example of why EAS exists, and the role of the federal government. I know some of you may say that the State should fund it out of the Permanent Fund, and while that sounds very easy, its a VERY difficult bank of cash to take money out of, and that’s one reason the State legislators like putting savings in there. Its primary role is to be a rainy day fund, and of course the 650,000 citizens get a nice payout from the annual interest income each year. Could the State fund this? Maybe – if and when EAS gets shut down… but until then, we will continue to have federally funded air service.
Interesting week..
March 18th, 2012
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A few weeks ago I wrote about Alpena, Michigan and how they just aren’t getting much luck in terms of replacing their air service. The mayor has now sent the DOT a letter that was also sent out to community leaders & businesses urging them to keep Delta’s service locked into Alpena until they get a carrier that provides a codeshare and cabin-class equipment.
They have completed their third bid. And its not looking good.
The new letter states “We have been through three bidding cycles, exhausted thousands of dollars and countless hours to ensure that our community retains a suitable level of service, only to have the DOT lower the EAS criteria standards so they can relieve Delta”. Bids are not fun for anyone, and their best chance was with Silver, flying as United Express to Cleveland, the latest bid was with Air Choice One with Caravan or Navajo service to Chicago as an independent. Click HERE for the letter.
The letter continues “ We are asking that you help us ensure that our economy will continue to grow, by contacting the DOT and requesting that they reject the current bid as inadequate and open a fourth bidding cycle.”
The problem is, there’s a big risk that Delta is going to end service by the time this 4th docket is awarded. They are aggressively trying to get rid of the Saabs and I just don’t see Delta putting a jet into Alpena.
Risky move for the community, and if it does go out for a 4th bid, I’m wondering if we’ll see Silver try to bid for O’Hare instead. But other than Silver, I’m not sure who else is out there that meets the 15 seat & interline/codeshare requirement.
In other news, the DOT made an interesting approval with Manistee. After a few go-rounds, they finally approved a DOT Part 380 operation as a grant to Public Charters.com. This has gone to DOT for approval with community support twice now (I believe) and each time Devany’s group shot it down as it isn’t technically scheduled service, which is what the law requires. Manistee was really starting to generate traffic, with Republic flying jets into Manistee as Frontier Express to Denver, with close to 23,000 people using the service a year (versus barely 5,000 when flown by Great Lakes). However Republic decided to park the 35 & 50 seat jets and it just didn’t bode well for Manistee.
This time, they approached it under a different technique and it worked.
,From the DOT award:
One of those is the AEAS.5 By notice dated July 27, 2004, the Department established AEAS (Alternate Air Service) and invited communities to submit proposals.6 Congress established this Pilot Program to provide communities with an alternative to the traditional EAS-type service. Typically, the EAS program pays subsidy to regional air carriers to provide two or three round trips a day to a major hub airport with 19-seat aircraft. The AEAS Program is designed to allow communities to forego their EAS for a prescribed amount of time in exchange for receiving a grant to spend in a variety of ways that might better suit their individual needs.7 These options are spelled out in statute and include more frequent service with smaller aircraft, on-demand air taxi service, scheduled or on-demand surface transportation, regionalized air service, or purchasing an aircraft. Each community awarded a grant must execute a grant agreement with the Department before it begins spending funds under a grant award. Link to award.
So they finally pulled it off. $2 million in change is what its costing the tax payers and its going to be an interesting experiment. I tried bidding using a non-scheduled airline and was really hoping we would have won at least ONE market. My focus was on the number of frequencies per week, as the DOT has typically allowed split frequencies when flying to more than one market (so why not operate vis’a vis Allegiant?).
So Manistee will get public charters using Embraer Brasilias to Midway for 6 months and then go down to the Jetstream (kinda wierd to go to SMALLER aircraft, but i’m assuming it has to do with long-term arrangements). The interesting part of this equation is the LACK of flight schedule. The proposal just calls for 520 flights a year, so I’m guessing that means up to 2 flights a day during the peak travel times. This one will definitely be one to watch.
I think this took guts from the DOT as it could work in various markets.
On a side note, the message boards are all talking about Vision Airlines and how they are struggling. Vision tried to build-up a hub in Florida’s panhandle by emulating Allegiant and flying only a few times a week to a large chunk of markets using a mix of 32 seat Dornier 328 props and Boeing 737 aircraft. I believe all of this flying has since stopped. Vision has also ended its flights between Louisville and Atlanta, conceding the route to Delta. Its unfortunate that Vision hasn’t looked at EAS as the airline could clearly be winning a bunch of these markets just by DEFAULT since it is a Part 121 airline and its planes have two engines (hint hint).
