LITTLE ROCK — SeaPort Airlines wants passengers from Harrison, Hot Springs and El Dorado to fill its nine-seat aircraft so it can continue to qualify for a U.S. Department of Transportation subsidy dating back to 1978.
The Portland, Ore.-based commercial airline that feeds passengers to larger transportation hubs such as Dallas, Memphis and Kansas City, Mo., receives a per-passenger government subsidy through the “Essential Air Service” program.
Funding for the program has recently been targeted for budget cuts, and proposed changes could whittle down, even further, the number of 140 participating communities nationally — including Jonesboro and Hot Springs.
Rob McKinney, president of SeaPort, said Monday that while the U.S. Department of Transportation renewed Essential Air Service contracts with three of its Arkansas communities, the carrier withdrew its proposal to service the Jonesboro Municipal Airport and is no longer providing air transportation there.
The Transportation Department made it very clear that carriers would have to fall below a $200 per passenger cap, he said. The cap is a funding formula criticized by boosters for using a dollar figure dating to 1989. The formula can determine the profitability of an Essential Air Service airline.
“After running the numbers we’d not be able to comply with [the department’s] request,” SeaPort’s McKinney said. The carrier operates a fleet of Pilatus PC-12 aircraft in Arkansas.
Air Choice One of St. Louis said Monday that the carrier expected to restart service at the end of January in Jonesboro under a one-year contract.
Arkansas’ four Essential Air Service communities lost commercial airline service for more than a year in June 2008, when Mesa Air Group Inc. of Phoenix, Ariz., pulled out of the Midwestern market.
SeaPort resumed service to Arkansas in October 2009.
“It’s always a struggle when a community goes without service for so long,” McKinney said. “But we’re convinced we’re on the right track, and we’re confident we’re able to achieve” the passenger goals.
A $22 one-way fare SeaPort Airlines special announced last week in honor of the Transportation Department contract renewal is aimed at boosting sales.
George Downie, director of the Memorial Field Airport in Hot Springs, said his airport needs to increase boardings within a year or face the possibility of losing the subsidy.
“It’s hard to retrain people who have gotten into the habit of driving to Little Rock or Texarkana,” Downie said.
The airport is jointly working with the airlines on initiatives such as extreme discounted tickets to hit an annual passenger target figure.
Airport operators say that while the Essential Air Service funding has often been put on the chopping block, the program has continued to find the political support needed to approve its estimated $136 million budget.
Essential Air Service was started in 1978, when the airline industry was deregulated, as a way to keep flights going to smaller cities. It is funded by the first $50 million collected from overflight fees, which are charged to foreign carriers flying over U.S. airspace, and an annual congressional appropriation, as previously reported by the Arkansas Democrat-Gazette.
Air carriers are paid for flights into 140 participating cities that would not otherwise get scheduled air service.
A proposal seeks to change the geographical proximity from 70 miles to 90 miles as the distance from a major hub airport. To receive the payments, carriers must typically schedule at least 18 round-trip flights a week.
Philip Steed, manager of the Jonesboro Municipal Airport, when asked about the uncertainty of carrier service and the future of airlines service, said “we go through this every couple of years” — a reference to a governmental system that is changing all the time.
“With the Essential Air Service, it’s always been, ‘It’s gonna be cut,’” said Steed, who has seen at least six airlines come and go since 1983 when he took the post. “But it always comes through.”
Business, Pages 25 on 11/29/2011