Tuesday, December 13, 2016

U.S. picks airline to serve 3 Arkansas cities

Southern Airways Express of Memphis has been chosen to provide Essential Air Service to airports in El Dorado, Harrison and Hot Springs.

The federal Essential Air Service program was put into place to guarantee that small communities were served by air carriers after airline deregulation in the late 1970s.


Southern will receive a total of $7,082,127 in annual subsidies to serve the three airports from Jan. 1, 2017, through Feb. 28, 2019, according to a U.S. Department of Transportation order issued Friday.


That’s about $6.5 million less than what airport commissions in El Dorado, Harrison and Hot Springs had requested, according to the order.


“It’s certainly not what we anticipated,” said Tim Johnson, the manager of South Arkansas Regional Airport near El Dorado. “It’s certainly not what we were excited about.”


Johnson said his airport commission had nominated Contour Airlines of Smyrna, Tenn., which offered flights to Dallas and Nashville, Tenn., on twin-engine Jetstream 31 turboprop aircraft. Instead, El Dorado is getting flights only to Dallas on smaller, singleengine Cessna Caravan planes.


“It’s not the airline or type of aircraft the city was wanting,” Johnson.


He said the El Dorado airport commission was meeting late Monday afternoon to discuss, among other things, whether they have any options to appeal.


El Dorado’s first choice of Contour Airlines would have cost $4,910,677 in annual subsidies for the flights to Dallas and Nashville, according to the order issued Friday. That’s more than twice the amount of subsidy El Dorado got last year.


According to an emergency request for proposals the Transportation Department issued Sept. 21, the department had been providing an annual subsidy of $1,977,153 for Essential Air Service to El Dorado.


“The department considers its fiduciary responsibilities and we are mindful that one purpose of the Essential Air Service program is to provide subsidy for a basic level of air service necessary to connect communities to the national air transportation system,” according to Friday’s order.

Johnson said the airport commission wasn’t trying to be greedy.


“It’s not just greedily what you want,” he said. “It’s what serves the community the best. We want nonstop from here to Dallas. That was the main thing that we were wanting. But there was also the desire to go to a city to the east, and Contour would have gone to Nashville.”


The airports in El Dorado, Harrison and Hot Springs are the only ones in Arkansas that receive the federal Essential Air Service subsidy.


The three Arkansas airports lost their air-service provider when Oregon-based SeaPort Airlines abruptly ceased operations on Sept. 20 when it shifted from bankruptcy reorganization to liquidation. Sea-Port was receiving $5.9 million in annual subsidies to serve the three Arkansas airports.


SeaPort had been providing El Dorado with daily flights to Houston and Hot Springs.


According to Friday’s order, Southern will provide:


El Dorado with 18 weekly nonstop, round-trip flights to Dallas/Fort Worth International Airport for an annual subsidy of $2,306,627.


Harrison with 12 weekly nonstop, round-trip flights to DFW and six weekly nonstop round trips to Memphis International Airport for an annual subsidy of $2,397,188.


Hot Springs with 18 weekly nonstop round trips to DFW for $2,378,312 in annual subsidy.


The three Arkansas airports will be serviced with nine-seat Cessna Caravan aircraft, which is the type of aircraft SeaPort had used on those routes.


Historically, the Department of Transportation has approved the plans requested by the airports, but not this time.


As in El Dorado, Harrison had proposed Contour Airlines as its provider. Hot Springs had sought Boutique Air of San Francisco, which offered flights from Hot Springs to Dallas and Atlanta and would have cost $3,998,234 in annual subsidies.


Keith Sisson, co-founder and chief marketing officer for Southern Airways, said they have some leeway to change the routes.


“The subsidy doesn’t change, but the routing can change if everybody’s in agreement,” he said.


Southern started in 2013. The company has commercial service in the Gulf South region and provides Essential Air Service to six airports in Pennsylvania, and one each in Maryland, New York and West Virginia.


“We took our Southern model up to Pennsylvania to run the [Essential Air Service] rounds and it has worked out fantastic, Sisson said. “We have a track record of being able to take [essential service] markets that have struggled for whatever reason and improving the numbers, turning them around, getting them moving in the right direction. We’ve proven that we know how to go into an [essential service] market and get people on an airplane, and I think that’s why we were chosen for these contracts.”


He said customer service has been a main component of Southern’s success.


“We took the model of every single person is going to be treated like they’re a charter passenger on this airline, and we try to make that happen,” he said.


Sisson said Southern will begin serving the Arkansas airports within the next couple of months.


Airport managers in Harrison and Hot Springs didn’t return voice mail messages left for them on Monday, although a call was returned from the Boone County Regional Airport in Harrison saying airport manager Judy McCutcheon was out of the office Monday.


On Sept. 21, the Department of Transportation issued an emergency request for proposals to provide air service for El Dorado, Harrison and Hot Springs. The department asked for proposals to provide three round-trip flights per weekday (18 flights per week) to a large or medium hub on aircraft that seat nine passengers. 


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