A city that's had its share of airline upheaval in recent years now has a tough decision ahead of it.
After Phoenix-based Mesa Air Group announced in May that it wanted out of its federal contract to fly from Visalia and Merced to Las Vegas, the company did an about-face Thursday and submitted one of three bids for a new subsidized agreement with the U.S. Department of Transportation.
Mesa's bid, which surprised local officials, proposes the same Las Vegas service it has offered for eight months -- four flights a day, two with stops first in Merced -- but with a larger federal subsidy.
The other bidders are Great Lakes Aviation of Cheyenne, Wyo., proposing two nonstop flights each day between Visalia and Las Vegas; and Vision Air, proposing one daily round-trip loop between Merced, Visalia and Long Beach and a second daily loop between Merced, Visalia and North Las Vegas.
The Department of Transportation will solicit comments from the community and ask for recommendations from city leaders as it reviews the Mesa, Great Lakes and Vision proposals before awarding a contract.
At stake is millions of dollars in subsidies under the federal Essential Air Service program, created to ensure that smaller airport markets continued to have service to a major airline hub after the airline industry was deregulated in 1978.
Mesa Air now receives $1.6 million a year for its combined Visalia/Merced service. Its new bid asks for a subsidy of $3.2 million, compared with $1.1 million for Great Lakes Aviation and $1.3 million for Vision Air.
"We'll definitely need to gauge how the community feels, what the community wants," Visalia Municipal Airport Manager Mario Cifuentez said. "I think it will be interesting to see what the public feels is best."
Travel professionals point to Mesa's existing flights under the US Airways Express brand as a big advantage.
"What our customers look for is good connections," said Selma Evans, an agent with Lewis Travel in Visalia. "The good part about Mesa and the US Airways combo is they fly just about every place in the U.S., as well as to Europe and South America."
Steve Griffiths, owner of Executive Travel in Tulare, agreed.
"I think it's really important that if the [subsidy] money is going to be spent, we need to keep a brand name here," he said. "Having a low-cost, national carrier like US Airways in this market positions Visalia to be on all the route maps."
Cifuentez said the city backed Great Lakes when it bid against Mesa Air Group last fall to replace Scenic Air, but acknowledged the advantages Mesa brings to the game.
"They're already here, they've got systems in place and they fly to a major hub in Las Vegas," he said. "But we've got concerns about cancellations; we're going to need to have substantial conversations with them to see how they're going to improve their performance."
Visalia is one of more than a dozen markets in which Air Midwest, a subsidiary of Mesa Air Group, served notice this year that it wished to be freed from its federal Essential Air Service commitments.
On May 22, the airline notified the U.S. Department of Transportation of its intention to suspend service in Visalia and Merced; Ely, Nev.; Roswell and Alamogordo, N.M.; and Cedar City, Moab and Vernal, Utah.
Less than three weeks earlier, on May 3, Air Midwest served a similar notice for DuBois, Franklin and Lancaster, Pa.; Hagerstown, Md.; Greenbrier, White Sulphur Springs and Lewisburg, W.Va.; and Athens, Ga.
In addition, expiring Air Midwest contracts were awarded to other airlines earlier this year in Carlsbad and Hobbs, N.M., and Massena, Ogdensburg and Watertown, Pa.
Jeffrey Hartz, planning manager for Mesa Air Group, said the company hopes it can warm up any cold shoulders in Visalia and Merced over the airline's notice of termination.
Hartz said the current subsidy didn't provide enough revenue to offset unexpected spikes in fuel and maintenance costs. "The amount of money we were losing was substantial," he said.
"We're hoping everyone in the community, and city leaders, understand we didn't have much of a choice," Hartz added. "We have a responsibility to our shareholders, and we felt it was better to file a notice to terminate and rebid for a higher subsidy than raise fares drastically."
This year, he said, Mesa's Visalia/Merced flights are on a pace to carry more than 24,000 passengers, about one-third of which originate in Visalia.
The number of passengers connecting to other flights at McCarran International is still relatively low -- only about 10% to 12%, Hartz said, but that's double what it was in November.
"We'd prefer to see it at about 50-50," he said. "It's taking a lot of time to build that up, but we understand that's going to be a slow process."
The reporter can be reached at [email protected] or (559) 622-2410.
INFOBOX
Airline upheaval
Mesa Air Group's notice in May to terminate service in Visalia, and the choice of possible replacements, is the latest airline uncertainty in the community since 1995.
May 1995: WestAir, a subsidiary of Mesa Air Group flying as United Express, begins subsidized service of 25 round trips each week from Visalia and Merced to San Francisco.
December 1995: After Congress cuts money for subsidies, WestAir serves notice that it wants out of Visalia and Merced. The Department of Transportation reduces the required number of flights to 10 per week.
October 1996: WestAir switches its Visalia flights from San Francisco to Los Angeles with 10 flights each week.
June 1997: WestAir agrees to fly between Visalia and Los Angeles without a subsidy.
February 1998: After losing its United Express codeshare agreement, Mesa Air Group announces it wants out of Visalia.
Mid-1998: SkyWest Airlines begins flights between Visalia and Los Angeles, flying as United Express without a subsidy.
2001-02: Prior to the terror attacks of Sept. 11, 2001, SkyWest provides three nonstop flights daily to Los Angeles. After the attacks, SkyWest cuts a popular morning flight to L.A. Later in 2002, SkyWest routes two remaining L.A. flights through Fresno and bumps the flights to later in the day.
December 2004: SkyWest declares its intent to cease service in Visalia.
September 2005: Under a subsidized three-year Essential Air Service contract, Scenic Air begins flights between Visalia and North Las Vegas, replacing SkyWest with 10 round trips each week.
May 2006: Scenic Air files notice to terminate service at Visalia as well as in Merced, where it had flown since 2001.
November 2006: Mesa Air Group returns to Visalia and Merced as Air Midwest, replacing Scenic with a subsidized slate of 24 flights each week in a loop between Visalia, Merced and McCarran International Airport in Las Vegas.
May 2007: Mesa Air Group declares its intention to terminate service at Visalia and Merced.
July 2007: Mesa Air Group, Great Lakes Aviation and Vision Air submit proposals for subsidized airline service at Visalia and Merced.
Sources: U.S. Department of Transportation; Bee archives
