Tuesday, April 29, 2014

Feds recommend cutting subsidy to Hagerstown Regional Airport (KHGR) - Affected airports have 20 days to object to the proposed order and apply for a waiver

The U.S. Department of Transportation is proposing to cut a federal subsidy for air service at 13 small airports, including Hagerstown Regional Airport, that could eliminate Sun Air International’s daily commuter service, according to an order issued Thursday.

The order states that the Federal Aviation Administration’s Essential Air Service, or EAS, subsidy should be eliminated for Hagerstown, because the airport falls short of new requirements — approved in 2012 — that call for an average of 10 enplanements per day.

The local airport, located off Showalter Road north of Hagerstown, is within the 175-mile threshold of another major hub, Washington Dulles International Airport, which makes the regional facility subject to the 10-enplanement requirement, under the DOT order.

During federal fiscal 2013, Hagerstown generated a total of 2,419 passengers — inbound and outbound — aboard twice-daily Sun Air flights to and from Dulles, resulting in an average of 3.9 enplanements per day, figures show.

The affected airports have 20 days to object to the proposed order and apply for a waiver, which could be granted by the department.

Washington County officials on Tuesday supported filing a letter opposing the proposed cuts.

Hagerstown airport Director Phil Ridenour urged the Washington County Board of Commissioners to support writing a letter of objection, saying Sun Air has had a lackluster record in the past, but a new management team that took over in October 2013 appears to be turning a corner.

Ridenour told the commissioners that a new chief executive officer has taken over the company, and a new marketing team is actively promoting the twice-daily service in the community.

Sun Air’s reliability dropped to about 20 percent with many canceled flights under previous management, but that figure has shot back up to nearly 100 percent, Ridenour said.

He said that on-time flight rates are “fantastic,” and operations have improved substantially.

Commissioner John F. Barr said that keeping the service is important to the community despite its low enplanement numbers. He likened it to customers getting a bad meal at a restaurant, making them reluctant to return.

“With the former management as bad as it was, I know folks like myself couldn’t depend on it, so you kind of put it in the back of your mind ... once you’ve had a bad experience,” he said. “It just takes a little while to turn over a new leaf, and for the business community in general to reaccept it.”

Previous providers that flew out of Hagerstown had enplanement numbers over 10 per day, Ridenour said. He is confident that Sun Air can achieve the same under new management.

In emailed statements, U.S. Sens. Barbara A. Mikulski, D-Md., and Ben Cardin, D-Md., as well as U.S. Rep. John Delaney, D-Md., all supported the county’s decision to object to the cuts.

“I’m on the side of the Hagerstown airport and of economic development in Western Maryland,” Mikulski said. “We know from FAA data that the airport exceeded the enplanement threshold from 2010 to 2012, qualifying for federal support through the Essential Air Service program. ... Hopefully, the huge dip in 2013 enplanements was a temporary decline that would afford the airport a waiver, which I will support.”

Cardin said the airport is an “essential transportation hub” for the county and the entire Western Maryland region.

Delaney noted that the EAS subsidy would limit the airport’s job creation and economic development potential.

“I fully support the airport’s request for a waiver, and I will make that support clear to the Department of Transportation,” he said. “The data suggests that the airport’s lower number of enplanements is likely temporary, and that other extenuating circumstances led to a dip in reported traffic.”

If Sun Air service is terminated at Hagerstown airport, it would cost the facility around $30,000 in annual revenues, Ridenour told the commissioners.

That would include about $15,000 in landing fees, $8,700 in fuel fees and $6,000 in terminal rent, as well as the loss of a handful of local employees, he said.

The proposed EAS funding cut would not affect twice-weekly flights to Orlando, Fla., via Allegiant Air, Ridenour said.

The EAS program was established under the Airline Deregulation Act, passed in 1978, to ensure small communities are served by air carriers with scheduled service, according to the DOT website.

The federal agency currently subsidizes commuter airlines that serve about 163 rural communities across the country that otherwise would not have any scheduled air service, the website said.

The federal subsidy to the airline provides up to $200 per passenger on each flight, offsetting the low cost of airfare to consumers, Ridenour said.

Other airports identified for elimination of EAS subsidies include three in Pennsylvania, two each in Georgia and California, and five others in Alabama, Arizona, Iowa, Mississippi, Tennessee. 

Source:   http://www.heraldmailmedia.com