Friday, December 22, 2017

Archer Daniels Midland ‘very disappointed’ in Cape Air pick for Decatur Airport (KDEC)

DECATUR — The federal decision to choose Cape Air for Decatur's next commercial airline over the recommendation of local elected officials and business leaders came down to money.

The U.S. Department of Transportation chooses Decatur’s airline because its air service is subsidized through the Essential Air Service program. Major local employers, especially Archer Daniels Midland Co., persuaded the Decatur Park District to advocate for SkyWest Airlines and its proposal of jet service to Chicago.

But the community support was not enough. SkyWest would have cost $700,000 more in federal subsidies than Cape Air, a bridge too far for the federal department, which announced its decision Thursday.

"We are very disappointed in the U.S. Department of Transportation’s decision," ADM spokesman Colin McBean said in a statement. "Passenger jet service would have been a catalyst for local Decatur businesses, helping drive economic growth and job creation in the region."

The department also rejected a bid from Air Choice One, which offered flights from Decatur since 2009.

Cape Air will fly passengers to St. Louis Lambert International Airport and O'Hare International Airport in Chicago on a twin-engine Cessna that seats nine. The airline sought $5.9 million in subsidies over the next two years.

The choice means that Decatur lost out on incentives that ADM promised if SkyWest was approved. The company said it would provide 5,000 passengers a year and up to $100,000 for airport renovations.

The agribusiness giant said many of its workers travel between Decatur and its corporate headquarters in Chicago. Company policy did not allow them to fly on Air Choice One because of its single-engine planes, ADM said in a letter to the department.

The contract with Cape Air runs from Feb. 1 to Jan. 31, 2020. Park district Executive Director Bill Clevenger said it was still unclear when the transition would take place.

What’s next for Decatur passengers with Cape Air?

"We knew it was up to DOT the whole time," Clevenger said. "I think there were positives to having jet service, and right now, DOT has issued their choice, so we'll look forward to working with Cape Air."

District changes course

Representatives of Cape Air, SkyWest and Air Choice One first shared their Essential Air Service proposals with the park board on Oct. 31. On Nov. 3, the board voted 3-2 to recommend the Massachusetts-based Cape Air to the Department of Transportation. Commissioners Chris Riley and Jack Kenny voted for SkyWest, citing the economic opportunities created by jet service.

Pointing to Cape Air’s experience in similar-sized cities, Board President Bob Brilley II and Commissioners Stacey Young and Chris Harrison said the airline would be a better fit.

Business leaders swiftly asked the board to reconsider. Just two weeks later, representatives from ADM, Decatur Memorial Hospital and T/CCI appealed to the commissioners to change their recommendation to SkyWest, saying jet service was more convenient for their employees and associates. ADM representatives also promised passengers and money as incentives.

During that meeting on Nov. 15, Brilley asked the business leaders why they didn’t reach out to the board before the initial vote. Some said scheduling prevented them from doing so, while others were not aware that the vote had already happened.

Harrison changed his vote, making the final tally 3-2 in favor of the Utah-based SkyWest. Despite the sudden change in course, Brilley told the Herald & Review that he would support the decision and submit the paperwork to the Department of Transportation that afternoon.

The board voted Dec. 6 to accept ADM’s money for airport improvements, stipulating that the contract depended on SkyWest becoming the next air service provider.

Clevenger confirmed Thursday that the district will not receive the money.
Finances outweigh support

Park district leaders provided two letters to the Department of Transportation. The first, sent Nov. 3, advocated for the choice of Cape Air, followed by one dated Nov. 15 that indicated the board changed its mind and supported SkyWest.

The department received a handful of other letters also in support of SkyWest, including a page and a half from ADM, according to public records. No one favored Air Choice One, and the department eliminated it from consideration.

Community support is important, the department said, but it is not the only factor considered.

SkyWest’s proposal called for $6.6 million in federal subsidies. It had also asked the department for a contract provision that would allow it to end the Decatur service with 120 days’ notice.

"Since the department cannot reasonably justify such an increase in annual subsidy and Cape Air's service will sufficiently meet Decatur's EAS (needs), the department will select Cape Air," the department said.

Further, it noted that Cape Air would provide service to O’Hare and use a twin-engine aircraft, both provisions that ADM had said were crucial.

Cape Air spokeswoman Trish Lorino said in a statement that the airline “trusts the process undertaken by the DOT, and looks forward to serving the Decatur community with the same level of service and commitment we have shown in all the EAS communities where we have been the selected carrier.”

Cape Air also provides Essential Air Service to communities in Montana, Missouri, Kentucky, Vermont and elsewhere in Illinois.

Passengers waiting in Decatur Airport on Thursday afternoon were not aware of the airline change, but said they enjoyed the convenience of being able to fly to O’Hare.

“It’s just easier than driving,” said Gaurav Aggarwal, who was in town for a job interview and flying back to Chicago the same day. “I just didn’t want to drive back and forth (to Chicago).”

Having recently moved to Decatur, Ben Lastoria was also using the airport for the first time and appreciated the convenience.

When told that Cape Air would also offer flights to St. Louis, Lastoria said he was glad because there are sometimes cheaper connecting flights from Lambert.

But before he committed to flying from Decatur again, Lastoria said he wanted to see how his first flight went. The plane was the smallest he’d ever been on.

Mixed reaction

In a statement, SkyWest spokeswoman McKall Morris said the airline was disappointed that it was not chosen to provide air service at Decatur Airport. However, she said SkyWest is “grateful for the opportunity we had to bid on service and for the positive community support we received.”

Kenny and Riley, who supported SkyWest’s bid throughout the Essential Air Service recommendation process, also said they were unhappy with the department’s decision. Harrison and Young did not respond to requests for comment from the Herald & Review on Thursday.

“I was surprised by it, but that’s the way it is,” Kenny said. “I guess they see it differently than the way we do locally, and they’re the final word.”

Riley is the director of state government relations at ADM, and previously said that he felt no conflict in voting for the same air service provider that was preferred by his employer. Bringing jet service to Decatur was a personal goal for him, as he hoped it would strengthen Decatur’s economy.

“The park board is always interested in the park district succeeding,” Riley said. “I truly hope that Cape Air succeeds.”

Brilley said he was pleased by the department’s decision. He said he was impressed by Cape Air’s willingness to create a local presence by opening a ticket booth in Decatur, as well as its approach to bringing more passengers to fly out of the airport.

If the airport reaches 10,000 enplanements, or flights that originate from Decatur, within a year, the park district will receive more federal money for infrastructure.

“I think we’ll move a lot forward than what people think,” Brilley said. “We’ll move on, work with Cape Air and make it work.”

McBean, the ADM spokesman, said the company now is looking into its next steps. 

"We are reviewing the decision," he said, "and evaluating options for reconsideration or appeal."

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