Monday, March 14, 2016

Eastern Montana flights slow with Bakken downturn

The slowing Bakken economy is clipping the wings of commercial travel in Eastern Montana, where fewer people are making the trip.

Essential Air Service provider Cape Air was down 3,914 passengers in 2015 compared to the previous year. That’s no small number for the air service, which uses nine-seat Cessna 402s to provide the only commercial flights to five rural Montana communities.

Cape Air’s hottest tickets are to Sidney, a far-Eastern Montana community with oil wells a few hundred yards from the airport landing strip. In 2014, 11,716 people hopped on Cape Air in Sidney for nonstop $49 flights to Billings. Demand for the flights increased nearly every month.

But in November 2014, oil prices went into a tailspin. Boardings onto Cape Air also began to decline. Last year, 1,631 fewer people flew out of Sidney. In Glendive, an alternative ticket for Bakken fliers, boardings fell by 353. On the other end of those routes, boardings in Billings were similarly down.

“The slowdown in the Bakken has certainly had an effect on our boardings in Sidney and Glendive,” said Erin Hatzell, Cape Air spokeswoman. “However, low gas prices and the unseasonably warm weather this winter has most likely also played a role. Sidney has the highest frequency in flights because of the connection to the oil-rich Bakken, and like most other businesses in the area we have felt the effects of the slowdown as well.”

Essential Air Service provides federally subsidized flights to rural communities that are long driving distances from urban airports and would otherwise have no commercial flights. Glasgow, Glendive, Havre, Wolf Point and Sidney each have direct flights to Billings where passengers can transfer to major airlines. The subsidy is roughly $500 per passenger to the lower-traffic communities, but less than that for Sidney flights because of greater demand.

The oil boom quickly doubled the number of passengers to and from Sidney, said Debbie Alke, administrator of the Montana Department of Transportation Aeronautics Division.

“In 2011, Sidney put 5,174 on board. In 2012, they put on 11,799,” Alke said. “But then there was a break in service.”

When Cape Air took flight in Montana in late 2013, it was the state’s fourth EAS provider in six years. Even with a federal subsidy, other airlines struggled to make the program work. Cape Air has managed to make the program work. It signed a new federal contract in 2015.

Sidney’s boost in passengers put it in the small club of Montana communities with enough air traffic to qualify for the $1 million a year in federal grants for airport improvements. It takes 10,000 passenger boardings a year to qualify for the funding. Only Montana’s seven largest cities had previously done so.

In 2015, Sidney cleared the mark for federal funding with 85 passengers to spare. It isn’t likely to do so this year, said Walt McNutt, of the Sidney-Richland County Airport Authority.

If the airport doesn’t hit the 10,000 passenger mark, the airport will dial back the construction projects it’s performed for the past few years and wait for oil boom to take flight again.

Cape Air’s other service areas are picking up passengers, Hatzell said. Wolf Point boardings are increasing by the month.

“The vast majority of our passengers in Wolf Point are traveling to and from Billings for medical appointments,” Hatzell said. “The community is very aware of our service, brand and the easy connectivity we provide to and from Billings. Havre is a growing market and we are gaining more brand awareness and loyalty from our passengers in the Hi Line.”

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