Saturday, September 24, 2016

Department of Transportation promises quick replacement process after SeaPort departure

A sign on the SeaPort ticket counter at the Eastern Oregon Regional Airport advises customers that the airline has ceased operations.

Commercial air service to Pendleton’s Eastern Oregon Regional Airport now has a long-term and a short-term problem.

In the long term, the city of Pendleton must justify to the U.S. Department of Transportation why it should keep its Essential Air Service subsidy after provider SeaPort Airlines’ boarding numbers were low enough to push the airport above the $200 per passenger subsidy cap.

From October 2014 to September 2015, SeaPort collected its $1,797,333 annual subsidy while boarding 8,422 passengers, meaning it cost the federal government $213 per passenger to fund air service in Pendleton. The DOT has threatened to pull the EAS funding at the end of the year.

In the short term, the city needs to find an air provider to fulfill SeaPort’s contract through the rest of 2017 after the Portland-based airline grounded its planes and began the process of liquidating its assets.

The DOT has already taken steps toward helping Pendleton with its short term problem, issuing an emergency request for proposal to find an airline to fill the gap between now and the end of 2016, when SeaPort’s contract was supposed to end and Boutique Air will take over.

The DOT filed the request on Wednesday, a day after SeaPort grounded its planes and the same day it filed for Chapter 7 bankruptcy, a move meant to restart air service at SeaPort’s remaining routes in Pendleton and Arkansas.

The request calls for airlines to submit a proposal that includes a description of the service and a subsidy amount by Oct. 12.

The proposal has to be comparable to the service SeaPort was providing before its closure, meaning the airline has to provide about three trips per day in a nine-seat aircraft to a medium or large hub airport.

A summary of the bids will be provided to city officials, with their final comments expected shortly after the bid deadline.

Because the Pendleton City Council has already recommended Boutique to handle flights in 2017, the request states it will handle Pendleton’s selection process “expeditiously.”

Pendleton Airport Manager Steve Chrisman said Wednesday that he had been in contact with Boutique about taking the emergency contract. Boutique project manager Greg Roberts did not return a request for comment Friday.

SeaPort’s closure interrupts activity for an airport that’s had a history of providing commercial air service going back eight decades.

After the city opened an airport two miles east of town four years earlier, Pendleton moved its airport to its current location in 1934 so United Airlines could put the town on its Portland to Chicago route.

Fearing airline deregulation would end air service to small communities, the federal government established the EAS program in 1978 and included Pendleton as one of its original communities. Pendleton changed its EAS provider in 2008 when it selected SeaPort over the incumbent Horizon Air, Horizon changed its direct flight to Portland to a one-stop flight to Seattle, but otherwise service went uninterrupted until SeaPort took over.

The loss of air service from Pendleton is a blow to some business and organizations that used SeaPort to save on trips to the Willamette Valley.

InterMountain Education Service District Superintendent Mark Mulvihill said he negotiated a bulk ticket price with the airport to send his employees on flights to Portland, a cheaper alternative than paying the costs of mileage and motel rooms.

Mulvihill saw it as a way to help SeaPort boost its business while providing a more efficient way for his employees to travel to meetings and conferences in Salem.

He even stationed a car for his employees at the Portland International Airport before he saw the writing on the wall with SeaPort’s bankruptcy and pulled it out.

“I’m very open to negotiations with Boutique, if we find a similar kind arrangement that’s a win-win,” he said.

Even if Pendleton officials can secure an airline for the rest of the year, they still have to convince the DOT that awarding Boutique a contract for 2017-2018 air service won’t continue to produce low boarding numbers.

The city is currently putting together a waiver petition explaining the circumstances surrounding those numbers, which is due to the DOT by Sept. 28.


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