The Single Best and Three Worst of the 2013 Small Community Air Service Development Proposals

Government Regulation

Yesterday I wrote about four 2013 Small Community Air Service Development applications that I thought were interesting enough to discuss. But consider that the appetizer. Today, I’m looking at the four that really get me worked up. That’s not all negative. There’s one in particular that I liked. But the other three? I do not like them, Sam-I-Am. Fortunately, and strangely, the feds felt the same way I did. Let’s take a look at each of these four, starting with the one that I liked the best of all.

SCASDP Applications

Del Rio, Texas – Thumbs Up from Me, Thumbs Up from the Feds
Little Del Rio lies on the Mexican border, more than 150 non-interstate miles west of San Antonio. Back in April, the city’s only airline, United, pulled out. American is interested in coming in if it can get some initial financial support. Seems reasonable to me since this would be a new airline trying to replace lost service. But what I like most about this application is how much of the community actually participated. This is small town-awesomeness at its best.

Not only did they get local businesses to commit to travel funds to support the service, but they even got local individuals. You can see the letters in the proposal. Billie Jo Grafton, the airport manager, personally pledged $500 to offset the costs incurred in the first year. Billie Jo also committed to buying 2 roundtrip tickets to Boise and 1 to Dallas in the first year. Jackie Robinson will buy 2 roundtrip tickets to New York and 2 to Phoenix. Robert Eads has committed to 4 roundtrip ticket to Dallas. Come on, how great is that? And there’s plenty more. Read the application to see them all.

The feds liked it as well, apparently. Del Rio now has $500,000 to get service up and running. You have to think that American will be thrilled to add another Texas destination right now, especially if it won’t lose money doing it.

Boise, Idaho – Thumbs Down from Me, Thumbs Down from the Feds
Sometimes, airports get greedy. Boise has good service to a lot of cities, but it’s not happy with what it has. It wants more service heading east. Today, Boise supports flights on Delta to Minneapolis and United to Chicago, but that’s not enough. Apparently, the flights are so full that people just have no options available. (And for some reason, it doesn’t count Denver as a hub for traveling east.)

Now, if the airlines thought Boise could profitably support more service, they’d add capacity either through bigger airplanes or more flights. But Boise thinks it needs a new destination as well because it is just that awesome. It would like Delta to Atlanta, a route Delta tried seasonally that didn’t work. It would take American to Dallas as well, but American did so poorly at that airport via LA that it pulled out. United to Newark and Dulles would be fine as well (suuuuure). Oh, and JetBlue to JFK would work. I find it amusing that the airport says slots and congestion at Chicago prevent United from adding more flights yet somehow it thinks it can easily get flights to JFK and Newark. Please.

To me, this application was a non-starter and the feds agreed.

Huntsville, Alabama – Thumbs Down from Me, Thumbs Down from the Feds
Huntsville has balls to apply for this grant again. Last time, it won funds to bring AirTran into town from Atlanta Baltimore and Orlando. Those flights were empty and fares were rock bottom. The service ended and I couldn’t imagine anyone trying it again for a long time. But here we are with Huntsville actually thinking it can get more government funds.

Huntsville says when AirTran came in, passengers stopped flying out of other airports and fares plunged. No kidding – Huntsville had some of the lowest fares in the nation since AirTran was so desperately trying to fill seats. Now, Huntsville wants a whopping $1.5 million from the feds to do a 2-year incentive for another airline. No way. And the feds rightly shot that one down.

Wichita, Kansas – Thumbs Down from Me, Thumbs Down from the Feds
Oh, Wichita. Will you ever learn? Wichita is something of a joke in my mind when it comes to air service. It thinks it deserves way more service than it gets, and it’s spent a decade pouring money into AirTran to keep the airline flying to the airport. Other airlines have come and gone and gotten angry at the money that gets wasted on supporting a new competitor to those who already want to fly to the airport without subsidy. And now, Wichita wants more money, federal-style.

When Southwest took over AirTran, it slashed service to a lot of small cities. Wichita wasn’t one of them. Wichita actually ended up with service to Vegas, Dallas, and Chicago. Sure, it lost AirTran’s Atlanta service, but it had a lot more connecting options available along with great new service to other cities. So what is it that Wichita wants? It wants $500,000 so it can promote Southwest in Wichita. Yet another example of Wichita playing favorites and supporting one carrier over another. This is a joke, and the feds agree. No money is heading to Wichita this year. Whew.

[Original photo via Flickr user Jeff Samsonow]

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21 comments on “The Single Best and Three Worst of the 2013 Small Community Air Service Development Proposals

  1. I thought the Richmond award was a bit ridiculous. The basis states that Richmond is “a geographic area currently lacking westbound air service”. Really? Richmond currently has service to ORD, DTW, MSP, DFW, IAH, ATL, CLE, CVG all providing westbound air service on a variety of carriers. And the “high” load factors they cite are only around 80%, a bit below the national average.

    1. Every east coast airport offers “westbound air service” through its associated hubs. What RIC wants from its hopeful SLC and/or DEN flights is one-stop flights pretty much anywhere in the country. RIC is my home airport. My family lives in Oregon. The only one-stop OR destination is PDX. Open up flights to SLC or DEN, and now you’re looking at one-stop to EUG, MFR and RDM. You also are one-stop away from smaller CA airports like SBA and MRY.

      I know I’m biased. I don’t think N/S service from RIC to the west coast is financially viable, but I do think RIC-DEN and RIC-SLC makes a lot of sense.

  2. You would think this type money would only go to airports with no service at all or they have service heading west but not east as an example, or to get a second carrier to help control air fares better.

    A case like BOI, if the airlines saw a lot of connecting traffic between BOI and the NY area, there would be nonstop service there. But just because a lot of people connect between two cities doesn’t mean an airline will put in a nonstop in the market.

  3. In the Wichita example listed above, you state “So what is it that AirTran wants? It wants $500,000…” I was not aware that individual carriers could make these financial requests. I thought the individual airport authorities made the requests.

    1. Tyrone is correct. I’ve fixed it to say Wichita. (I’m on vacation this week, so my response time is slower than usual.)

  4. Excellent job summarizing these representative examples of grant applications. Marathon Key airport comes to mind. The county insisted on a runway expansion to accommodate single aisle jets. Allegedly, Delta had pledged to start service. No commercial carrier serves the airport to this day. It is a perfect example of the fleecing of America to drive by a mostly empty multi-million dollars, taxpayers funded facility. Any thoughts on Paulding airport’s application for grant money?

  5. To further that remark, I thought that Southwest did not particularly care for operating in subsidized markets (other than its deal with St. Joe’s to offer service in the then-new ECP airport for a finite period). In fact, I was under the impression that Southwest rather eschewed subsidies. Word is that many smaller markets have courted Southwest over the years by offering subsidies, but that Southwest routinely declines these types of requests. Or am I misinformed?

  6. So the program in total is just under $11.5M which is really nothing in terms of the Fed .gov but seriously, why do we even need this program?? I read the BIS proposal and rolled my eyes. Their entire premise is that we’re booming in W. NoDak due to oil and need another airline to add capacity, lower fares, etc. The free market has spoken and already said that the area will only support the service it currently has, right? They lament that capacity has shrunk in recent years – hasn’t it everywhere? I’m sure that if DL could fill up a daily 777 in BIS and take it to any of their hubs they’d do it – ditto UA. The other complaint is high fares as if there is some God given right to cheap fares. I’m sure people in ATL wish they had cheaper fares/more competition too.

    The Del Rio story is a little different as they’ve currently got nothing, but a quick scan shows most of the requests to be what I’d call a “waste of taxpayer dollars.”

  7. The problem here in HSV is that most of traffic is gov’t or gov’t related and nobody of any consequence really cares what the cost is. It tends to push fares through the roof.

    1. Those prices are usually set in contracts that guarantee seats, but also tend to mean that there is little competition since prices are locked in at a lower rate. When GSA or other state contract offices can negotiate you down to a consistent price point, the advantage of offering low prices as a new entrant is rather minimal.

      Honestly I would argue in many situations bulk government flying tends to hurt the nongovernment consumer since they usually make up the rest of the profits, and that airlines really don’t have to cater to them because, hey, you aren’t the filler of seats.

      1. I’ll put it this way, I know that per our contract with Uncle Sugar, if we travel, we’re required to buy a fully flexible, fully refundable ticket. If most of the contracts are that way, and I’ve yet to come across one that isn’t, how much of an incentive is there to lower fares on the few seats that aren’t filled with gov’t travel of some form? If you’re already making wicked bank on the filled seats, having a fire sale on the unfilled is a lot less appealing…

      1. Ryan – You are correct. My mistake, but it doesn’t change my analysis. In fact, with Huntsville only 150 miles away, I’d imagine the Atlanta flight would do worse than the rest because it would be all connecting traffic with no local demand.

  8. Just a note of appreciation for your blog on these situations.

    I don’t believe there’s a person in America better than you to describe, analyze and comment on this stuff, more simply, more clearly and, what appears to me, fairly, as you have.

    Wishing you had the time and resources to look at and report for us on air service at every community in this country. (I believe there’s only 499 commercial air service airports and few more that recently lost all commecial air service but I’m sure you could handle it. Lord knows, most communities don’t have the time, the money or the expertise to do it. I’d be glad to write a letter of support to anyone that might consider offering you a generous grant. I checked with DOT but they were still closed!)

    Incidently, I notice, and maybe you have, too, and perhaps you’ve already noted it on the blog, a White Paper by MIT’s International Center for Air Transportation, on Small Commutity Air Service in the US–“Trends and Market Forces Shaping Small Community Air Service in the United States (Michael D. Wittman and William S. Swelbar), MIT Small Community Air Service White Paper No. 1, Report No. ICAT-2013-02, May 2013. It reads well, maybe not as well as you write, but…!

  9. In addition to past short lived service from Boise to Dallas (AA) and Boise to Atlanta (Delta), Continental also experimented with a regional jet run from Boise to Houston. I agree with Cranky. There have been plenty of experiments with linking Boise to hubs further east. They didn’t work. There’s no need to subsidize further experiments. And I used to live in Boise.

    Kudos to Del Rio for putting together an excellent application.

    1. I’d cut Boise some slack on the failed service to DFW and IAH. CO and AA offered bad products – E145s on very long flights. Try these routes again on bigger equipment with premium class and it could work. I’d especially think that UA to IAH would work since they have a decent presence here in BOI.

  10. The Del Rio story is great! Don’t forget the sister city over the border, Acuna, has a large population to draw from as well. I hope it works for them!

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