Even as reporters continue to call Essential Airline Service a gold mine for those who serve under this troubled DOT policy, Island Air said it is quitting the Midwest Essential Air Services contract in favor of adding additional inter-island service in the wake of the Aloha liquidation. The routes it is abandoning as a US Airways Express include Kansas City International airport to Joplin, Mo.; Grand Island, Neb.; and Harrison, Ark., connecting to Hot Springs, Ark. The award for the EAS routes is less than a month old. The carrier added Honolulu-Lihue and Maui as well as Maui-Kona and Lihue to its 444-weekly flight roster.
"After careful analysis, we have concluded that a Midwest startup date of mid-September is unrealistic." Chief Operating Officer Les Murashige Murashige told the Pacific Business Journal. "Since time is of the essence for the Midwest communities, it is with a heavy heart that Island Air relinquishes the awarded EAS contract so that it may be redirected and awarded to an airline that can commence service within their desired time frame. Island Air hopes to have other opportunities to bid for an EAS contract but for now, we will focus on our local market."
The Essential Air Service program is losing carriers hand over fist, largely owing to fuel prices and the Department of Transportation’s failure to raise subsidies when operational costs are beyond an airline’s control. Regional Aviation Partners cited the precedent set during the Gulf War, when escalating fuel costs prompted Congress to tell DOT to use any unobligated funds to offset jet fuel cost increases between August 1990 and May 1991. RAP is calling for similar action now. “In 1990, the DOT explained rising jet fuel costs and their impact on the EAS operating environment warranted implementation of subsidy adjustments and that “program-wide actions” were necessary.
“A comparison of real jet fuel prices in 1990/1991 and 2008 clearly illustrates the price of jet fuel in May 2008 in nearly twice as much as the price in May 1990,” said the organization. “Since May 2007, 48 of 106, or 45 percent of, EAS communities have had 90-day termination notices filed by the air carrier serving their community. Extension of service orders are commonplace. Case in point, Air Midwest filed 90-day termination notices for 24 markets beginning May 3, 2007; May 22, 2007; and finally on January 22, 2008. As of May 14, 2008, Air Midwest was still held-in at 18 of these communities and in three – Visalia and Merced, CA and Ely, NV – Air Midwest has been held-in since May 22, 2007 when the carrier first notified DOT of its intent to terminate service on August 19, 2007.
“In 2008 alone, the program has lost three carriers who shut down and ceased business,” RAP continued, citing Big Sky, Skyway and Air Midwest. “As late as 2007, four carriers that are no longer in operation – Big Sky, SkyWay, RegionsAir, and Air Midwest – served over 50 percent of the subsidized EAS markets in the lower 48 states.”
RAP cited Great Lakes steady response to the loss of other carriers but said it is close to capturing 50 percent of all subsidized markets. Related Story
“Of the new carriers emerging, only two, Gulfstream and Island Air, are capable of providing service with two-pilot, twin-engine, pressurized aircraft offering at least 15 passenger seats,” said RAP before Island Air’s announcement. The remaining new entrants are all nine-seat airliners which require a waiver of basic EAS minimum requirements by the affected communities.”
The nine-seaters are a response to the airport/fire rescue requirements, according to William (Monty) Fuller, who retired after working in the industry since 1973 including for Air Midwest and Continental Express. However, this could set a precedent that means these cities will only be eligible for nine-seaters into the future.