and someone in USAir planning blew it big time.
Talk about a nice 'smack' from the DOT:
We fully acknowledge that the community strongly supports Piedmont’s proposal and that the carrier has served the community for some time and has provided reliable essential air service. Given the disparity in the subsidy required to support these proposed services (Piedmont’s proposal costs more than $400,000 more annually than Mesaba’s proposal), we find that the overall objectives of the EAS program are best served by the selection of Mesaba. As we have stated since the inception of the EAS program, the program is not intended to provide all the scheduled air service that a community desires; rather, EAS is simply the level of service that the government should guarantee to ensure that a community will have access to the national air transportation system. Under the circumstances, we cannot justify spending almost $900,000 ($440,000 per year) in additional funding during the two-year contract. We find that the subsidy level is reasonable for the service Mesaba proposed.
One of the reasons the community prefers Piedmont is its service to Philadelphia as opposed to Mesaba’s service to Detroit. We note that, according to the Official Airline Guide, Philadelphia receives 629 total departures a day compared to 616 at Detroit. Upon further examination, however, we note that Northwest operates more departures a day at Detroit than
3
does US Airways at Philadelphia (489 vs. 444), allowing for more seamless on-line connections.
The community also supports Piedmont because it believes that Piedmont is better equipped to grow the market so that it no longer needs EAS subsidy. In that regard, in their proposals, Piedmont projects 16,206 passengers and Mesaba projects 26,229 compared to over 50,000 the community generated in 2007, albeit based on five round trips a day. On a per-flight basis, Mesaba projects 20 passengers per flight while Piedmont projects only 13. It appears that Piedmont’s passenger forecast is very low, resulting in a higher subsidy rate. Even a passenger forecast that assumed the historical number of passengers per flight would result in about 20,000 passengers, which equates to about $320,000 in additional revenue, and would make this case very competitive. Based on Piedmont’s own forecast of 13 passengers on a 37-seat aircraft, it is difficult to conclude that Piedmont is better positioned to work the community off subsidy.
The community also takes issue with our referring to Mesaba’s “34-seat†Saab 340 aircraft, stating that the number of seats actually available for sale ranges from 28-32. We note that Mesaba’s own proposal is internally inconsistent in that it refers to its aircraft as 34-seat in its cover letter, but uses 32 seats in its subsidy calculations for available seat miles.1 We are aware that there can be some conditions in which not all seats on an aircraft can be made available for sale, typically on long routes in hot and high conditions. Nonetheless, the point is that the program’s statutory minimum requires that communities receive at least two round trips a day, provided with 15-seat aircraft. Mesaba’s proposed service far exceeds those minimum requirements.
The community notes that Piedmont proposes to add a third round trip “when economically feasible.†However, because that service would not be subsidized, it would not be part of the contract and we could not require it. Therefore, it carriers very little decisional weight.
Finally, Mesaba’s proposed service, along with its codeshare agreement with Northwest Airlines, offers Williamsport travelers excellent access to the national air transportation system, via numerous connecting opportunities at Detroit Metropolitan Wayne County Airport.
Therefore, based on all of the above, we will select Mesaba to provide EAS at Williamsport, Pennsylvania.
Carrier
