Sunday, January 6, 2019

Ramkota Hotel in Watertown, South Dakota: ADI/California Pacific Airlines stiffing them for 15 months of bills

The general manager of the Ramkota Hotel in Watertown, South Dakota, told federal transportation officials last week that ADI/California Pacific Airlines hasn’t paid its tab at the hotel from nearly 16 months in 2016 and 2017 when flight crews stayed there.

California Pacific, or CPA, bought ADI in early 2018 and continued the schedule of 12 round trips per week from Watertown and Pierre to Denver which began August 15, 2016, under the federally subsidized Essential Air Service program.

The comment from Deb Stanley was posted Friday, January 4th on the federal government website, www.regulations.gov., which contains official documents for the U.S. Department of Transportation.

Stanley’s comment adds details to the complaints in a letter sent in December from Pierre Mayor Steve Harding and Watertown Mayor Sarah Caron to DOT officials saying CPA was delinquent in paying bills to local vendors and in bringing flights in on time, or at all.

The mayors asked DOT officials to step in within 30 days or so and get things fixed with the San Diego-based company, or to allow the two communities to re-open the bidding process to find a new airline. 

In her comment posted Friday, Stanley said Ramkota in Watertown “housed the flight crew and additional staff” as soon as they began flying to Watertown and Pierre on August 15th, 2016.

“They discontinued their stays with us November 2017 and we are still trying to collect from their stays,” Stanley wrote. “Our efforts to collect on this severely delinquent account have been either ignored or pushed aside. We, like the city and other parties were excited to have reliable air service to our community; and looked forward to being able to provide the necessary lodging for the overnight crew. The amenities of an onsite restaurant and proximity to the airport were very favorable when the decision was made for their lodging choice. The amount we are still owed is significant for a small business in South Dakota.”

“As the cities of Watertown and Pierre attempt to collect on the past-due accounts, we would welcome any assistance in our efforts to collect this debt . . .,” Stanley wrote in an online comment on the DOT’s page on the website. “We certainly wish ADI/California Pacific well, but not at the expense of businesses who were contracted to provide essential services.”

A spokesman for CPA did not return requests from the Capital Journal for a comment on the situation.

In December, a CPA vice president told the Capital Journal that an October incident in which a CPA jet’s wing was damaged by hitting a construction excavator while taxiing to the runway threw a monkey wrench in the airline’s ability to keep its flight schedules to Pierre and Watertown.

 The two mayors told DOT that since CPA had bought Atlanta-based ADI, service became spotty.

CPA, owned by San Diego entrepreneur Ted Vallas, finally got into the airline business last year by buying ADI, including it’s lease agreement on four 50-passenger jets. A longtime charter airline, ADI’s only scheduled passenger flights were the Watertown-Pierre-Denver schedule it began in August 2016.

Once CPA took over, it added flights from Carlsbad, California to Las Vegas and Phoenix, with plans announced for more flights from Carlsbad.

In the last two weeks, CPA has cancelled all its flights from Carlsbad as it has struggled with not having enough jets, and the longer-term problem of the pilot shortage created by increased training rules the DOT put int effect five years ago.

Mickey Bowman, vice president and chief of operations for ADI/CPA, told the Capital Journal the airline was quitting the charter business to devote its resources to the scheduled passenger air service.

Bowman left CPA recently, Pierre Mayor Steve Harding told the Capital Journal recently.

Attempts by the Capital Journal to reach a spokesman for CPA in recent days were unsuccessful.

On its website Sunday, CPA had this note: “We have temporarily suspended our Carlsbad flights and ticket sales due to impact from the nationwide pilot shortage. We are in the process of training new pilots who will allow us to re-launch services soon. All existing January 2019 flight reservations for Carlsbad, San Jose, Reno, Las Vegas, Phoenix-Mesa are cancelled.”

On Sunday, according to its website, CPA was taking reservations for flights from Pierre and Watertown to Denver for Monday, January 7th, and Tuesday, January 8th.

On May 29, 2018, the DOT, following the requests of civic leaders in Pierre and Watertown, “re-selected”  ADI for a second two-year EAS contract to fly 12 Watertown-Pierre-Denver round trips per week from Aug. 1, 2018 to July 31, 2020. DOT accepted ADI’s bid of providing the service for an EAS subsidy of $7.06 million — $4.65 for the Pierre piece and $2.4 million for the Watertown side of the flights — per year.  

The EAS program aims at helping small, isolated airports obtain scheduled passenger air service.

Bowman told the Capital Journal that the program is designed with an incentive to the airline to provide good service: the subsidy is doled out by the feds on a per-flight reimbursement basis and if a flight isn’t completed, the airline does not collect the subsidy.

Under a separate DOT program, the Pierre Regional Airport reached a key passenger boarding figure recently, city leaders said last week: the annual passenger “enplanement” figures exceeded 10,000 for 2018. That’s important because it means DOT will continue giving the airport a $1 million grant for capital improvements at the airport.

If passenger boardings fall below the 10,000 mark, the DOT airport funding level is reduced by about $850,000.

The Watertown airport also exceeded 10,000 passenger boardings in 2018.

Both cities had more than 10,000 boardings for 2017.

Original article can be found here ➤ https://www.capjournal.com

I am submitting this comment as one of the public entities that is also not being paid by ADI / California Pacific Airlines.

I represent the Ramkota Hotel of Watertown SD and we housed the flight crew and additional staff of the airline when they began service in Watertown in August, 2016. They discontinued their stays with us November, 2017 and we are still trying to collect from their stays. Our efforts to collect on this severely delinquent account have been either ignored or pushed aside. We, like the city and other parties were excited to have reliable air service to our community and looked forward to being able 
to provide the necessary lodging for the overnight crew. The amenities of an onsite restaurant and proximity to the airport were very favorable when the decision was made for their lodging choice. The amount we are still owed is significant for a small business in South Dakota.

As the cities of Watertown and Pierre attempt to collect on the past due accounts, we would welcome any assistance in our efforts to collect this debt and appreciate the forum to share the information. We certainly wish ADI / California Pacific well, but not at the expense of businesses who were contracted to provide essential services.


I am available if any additional information is needed.


Deb Stanley, General Manager
Ramkota Hotel
Watertown, SD

Source ➤ https://www.regulations.gov

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