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Commercial Air Service in Jeopardy

Posted on: Wednesday, 20 July 2005, 15:01 CDT

Jul. 20--The U.S. Department of Transportation has warned that Owensboro-Daviess County Regional Airport could lose commercial air service unless it provides "a compelling demonstration" by July 31 of ways to boost its passenger load.

Tim Bradshaw, airport manager, said Tuesday that he's confident that can be done.

In a July 1 letter, Karan K. Bhatia, assistant secretary of transportation for aviation and international affairs, said that the per-passenger subsidy for the Owensboro airport topped the $200 mark for the year ending March 31.

If that doesn't change, he said, the subsidy will be terminated.

Bhatia said between April 1, 2004, and March 31, 2005, the airport handled 5,498 passengers. And RegionsAir, the Tennessee-based commuter airline that serves the airport, received a subsidy of $1.13 million.

That comes to $205.07 per passenger, Bhatia said in the letter.

But Bradshaw said passenger loads have already increased enough to move Owensboro back below the $200 per passenger threshold.

Between July 1, 2004, and June 30, 2005, he said, the figure dropped to $193 per passenger.

But that, Bradshaw said, isn't good enough.

So, the airport board is working on three plans to increase passenger loads.

"We're considering offering rebates on tickets," Bradshaw said. "We're asking the Department of Transportation to approve multiple code shares with other airlines serving St. Louis, and we're working on changes to the flight schedule to attract more people."

Those changes will be announced soon, he said.

"Multiple code share," Bradshaw said, would allow RegionsAir to carry local passengers who book flights on other airlines serving St. Louis as well as American Airlines.

Lambert-St. Louis International Airport's Web site lists 15 airlines -- Air Canada Jazz, Allegiant, America West, American, Comair, Continental, Delta, Frontier, KLM, Northwest, Skyway, United, US Airways Express, Southwest and USA 3000.

The DOT letter says Owensboro's subsidy "is in jeopardy."

It adds: "We must advise you that absent compelling demonstration that the subsidy per passenger will fall within the statutory limits, we will have no alternative than to terminate Owensboro's subsidy eligibility."

Bradshaw said: "It's not a show-cause order. I think we can satisfy them with the plans we're working on. But we do have to turn things around."

The Department of Transportation said the Owensboro airport handled 31,532 passengers in 1993 -- an average of 50.4 per service day. That has dropped to 5,498 passengers in the year ending March 31 -- an average of 8.9 per day.

In fact, each of the past two years has seen an average of 8.9 passengers per day, the DOT said.

But on Nov. 1, the airport, using a federal grant, began subsidizing a third flight to St. Louis -- leaving early and arriving late.

And numbers have started climbing again.

During the second quarter this year, the airport handled 808 passengers -- up from 693 during the same period last year.

Last month, RegionsAir won a two-year contract from DOT to serve Owensboro with a subsidy of $1.03 million a year.

But that could be canceled if the numbers don't stay below $200 per passenger.

Bradshaw said Owensboro's problems can be traced back to Nov. 1, 2003, when American cut the number of its flights at St. Louis from 417 to 207.

And Owensboro wasn't the only city affected.

Jackson, Tenn., also got one of the letters this month, saying its per-passenger subsidy is over the $200 limit.

Earlier this year, the Jackson Area Chamber of Commerce wrote DOT: "... the current service to St. Louis is unacceptable and a change is needed. High ticket prices and the lack of reasonable connections has resulted in a 66 percent reduction in local boardings during the last three years."

In June, DOT warned that Owensboro was "precariously" close to the $200 per passenger cap on essential air service.

"We expect each of the communities to work closely with RegionsAir to create a plan to stay below the $200 cap," the agency said.

The airport board is doing just that, Bradshaw said.

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Source: Messenger-Inquirer

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