Airline Pulling out of Merced

After only a few months of service, the airline that links Visalia and Merced to Las Vegas is declaring it wants to quit the route despite growing passenger counts.

Phoenix-based Mesa Air Group and its subsidiary, Air Midwest, told Visalia officials Monday afternoon of their desire to terminate the service the company began just last November.

"Air Midwest Inc. respectfully serves notice ... of its intent to discontinue scheduled subsidized Essential Air Service (between Visalia and Merced to Las Vegas) ... effective August 19, 2007," wrote Tom Bacon, vice president of planning for Mesa Air Group, in the notice filed Monday with the U.S. Department of Transportation.

The airline's notice also declares its intent to cease service between Ely, Nev., and Las Vegas on the same date.

The airline flies a schedule of 23 weekly round trips between Visalia, Merced and Las Vegas' McCarran International Airport, using 19-passenger Beech 1900 turboprop airplanes. The flights make alternating loops, with about half originating in Visalia and stopping in Merced before heading to Las Vegas and half heading the other direction.

Visalia Airport Manager Mario Cifuentez said he was at a loss to understand the airline's decision.

"It's obviously very frustrating," Cifuentez said Monday evening. "Our numbers in Visalia have been very strong, with some flights departing and arriving almost full."

Cifuentez said more than 1,300 passengers flew from Visalia in both March and April -- the highest passenger counts at the airport since before the terrorist attacks of September 2001 dimmed the entire U.S. airline industry.

Cifuentez said he learned of the airline's plan from a telephone message and e-mail from Mickey Bowman, Mesa Air Group's director of planning.

Neither Bowman nor Bacon, nor Paul Skellon, Mesa Air Group's vice president of corporate communications, or Jeffrey Hartz, the company's manager for Essential Air Service, could be reached Monday evening.

Visalia and Merced are both included in the the federal Essential Air Service program, developed by the U.S. Department of Transportation after airline deregulation in 1978 to ensure that smaller markets had air service connecting them to major airline hubs.

But this is the second time in a year that an airline serving the two cities has decided to cut and run. In May 2006, Las Vegas-based Scenic Airlines announced it wanted to abandon its subsidized, federal Essential Air Service contracts for Merced and Visalia.

Scenic had flown to Visalia only since September 2005, replacing SkyWest Airlines flights to Los Angeles.

SkyWest Airlines flew as United Express between Visalia and Los Angeles International Airport, without a federal subsidy, from 1998 through August 2005.

Last fall, Air Midwest beat out two other airlines bidding to replace Scenic for the subsidized EAS contract for Visalia and Merced, winning a subsidy of up to $1.6 million a year.

Merced Airport Manager Lloyd Partin was traveling to Los Angeles on Monday evening and had not heard about the Air Midwest decision until asked about it by a reporter.

"I'd heard there was a possibility this might happen," Partin said by telephone. "But I didn't envision something like this would happen so quickly."

Partin said he believes the Valley's demographics make it difficult for an airline to establish a competitive air service in smaller markets like Visalia or Merced, even with a subsidy.

"That Beech 1900 airliner they fly costs about $1,300 an hour to operate, and that's pretty much a fixed cost ... that's going up as fuel prices increase," Partin said. "And you've only got 19 seats to share that cost."

Deputy City Manager Leslie Caviglia said the city expects the federal Department of Transportation to once again seek proposals from airlines to take over the EAS service in Visalia. In the meantime, she said, federal authorities would likely order Air Midwest to continue service until a new company is chosen and takes over.

Cifuentez said he believes Visalia will draw interest from other airlines in a new selection process. "We actually don't think this is a reflection on the viability of the Visalia market, but rather a market decision by Air Midwest to vacate most, if not all, of its Essential Air Service markets," he said.

Cifuentez said his optimism is based on a conversation with Dennis DeVaney, the federal chief of the Essential Air Service program. "Dennis told me (Mesa Air Group) notified six other EAS communities in the last month that they were pulling out of their markets," Cifuentez said Monday. "They're getting out of the 19-seat airplane business ... to concentrate on their regional-jet business."

Another Mesa Air Group subsidiary, Mesa Airlines, flies regional jets in service to Fresno and Bakersfield.

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