Several carriers seek to take over subsidized flights from Athens, Georgia

PHIL SKINNER / PSKINNER, AJC.COM 

GeorgiaSkies Captain Keith Windham (left) lowers the cabin stairs as his Co-Pilot Ryan Hana prepares to climb in their Cessna Caravan C208 airplane on the tarmac at Hartsfield-Jackson International Airport in Atlanta on Friday July 13th, 2012.

Atlanta Business News 7:11 a.m. Saturday, August 18, 2012 
By Kelly Yamanouchi

The Atlanta Journal-Constitution

An average of just over two passengers a day boarded airline flights taking them on a 72-mile trip from Athens to Atlanta last year, yet four small carriers are jockeying for the chance to take over service from the college town.
 
That's because they're also seeking federal subsidies ranging from $1.1 million to $1.9 million a year in exchange for operating flights, and they're betting they can attract more passengers than the current subsidized carrier, GeorgiaSkies, is serving today.

The federal Essential Air Service subsidies have been raising controversy, in part because they have in some cases amounted to hundreds of dollars per passenger supporting flights with mostly empty planes on routes so short that many travelers opt to drive.

GeorgiaSkies has been operating about two flights a day from Athens to Atlanta with nine-passenger planes, most recently at an annual subsidy of about $1 million. The flights started off relatively well, attracting an average of nearly 15 passengers a day at Athens in 2009. That declined to fewer than 11 passengers a day in 2010, then plummeted to fewer than three in 2011.

When the U.S. Department of Transportation solicited proposals for the Athens service, it said carriers should discuss how they would attract enough customers to remain eligible for the subsidy — generally an average of at least 10 passengers a day.

Fort Lauderdale, Fla.-based Sun Air International proposed to operate up to four daily flights from Athens to Atlanta with nine-passenger twin-engine Piper Chieftain planes in exchange for a $1.5 million subsidy. Sun Air said its bid is contingent upon it also winning the contract for subsidized service at Macon, among other factors.

St. Louis-based Air Choice One proposed flying the Cessna Grand Caravan — similar to the type flown by GeorgiaSkies — three times a day from Athens to Atlanta for an annual subsidy of $1.9 million.

Portland, Ore.-based SeaPort Airlines proposed to fly Cessna Caravan planes from Athens to Charlotte and/or Nashville, rather than Atlanta, in exchange for an annual subsidy of roughly $1.6 million.

Finally, a company called Sovereign Air proposed to fly from Athens to Atlanta with two flights a day for a $1.1 million annual subsidy.

Air Choice One's and SeaPort's subsidies would each amount to about $222 per passenger based on their projected passenger counts — higher than the $200 cap under the Essential Air Service program.

"We're just being realistic," said Timothy Sieber, a vice president at SeaPort. "It's going to take some time to rebuild the trust that people have in the service at Athens' airport."

He said SeaPort would aim to increase passenger counts by offering more flights and bypassing Atlanta, the world's busiest airport. "It's tough to serve a market like Athens with two flights a day when there are over 1,200 flights a day 75 miles away," Sieber said.

Meanwhile, GeorgiaSkies did not submit a proposal to continue service at Athens.

"Dependence on subsidies, especially given the waste in the program, doesn't seem like a good long-term business model," GeorgiaSkies head Greg Kahlstorf said. "It just doesn't make sense to try to keep these small airports on life support."

The story so far:
 
GeorgiaSkies started operating subsidized flights from Athens and Macon to Atlanta in 2008.

A startup carrier called Wings Air then briefly served Athens and Macon without a subsidy before shutting down.

GeorgiaSkies in 2010 won a contract to continue the subsidized flights from Athens. It opted to serve Macon without a subsidy after the subsidy in 2009 came to $464 per passenger.

The U.S. Department of Transportation has been reviewing proposals for the Macon subsidized service.

This week: The DOT received four proposals for the subsidized service from Athens and has asked for comments from city officials by Sept. 6. It expects to then issue a decision about three to four weeks later.

Story and photo:   http://www.ajc.com