It was a good week for Mesa Air Group, but local airport observers wonder if it's also good news for Columbia.
Last week, the U.S. Department of Transportation selected Air Midwest, a subsidiary of Phoenix-based Mesa Air Group Inc., to provide essential air service out of Columbia Regional Airport. The two-year deal provides 12 nonstop round trips to Kansas City and 12 nonstop round trips to St. Louis each week for an annual federal government subsidy of $598,751.
Air Midwest has been on a roll lately, snatching up subsidized markets to provide minimum service under the federal government's Essential Air Service program, or EAS.
Last week, the regional airline also won two-year government contracts to provide essential air service for the Nebraska cities of Grand Island and McCook for a combined annual subsidy of about $2.3 million.
"We are delighted to be awarded these new contracts by the U.S. Department of Transportation," Mesa Air Group Vice President Mickey Bowman said in a news release. "Our Air Midwest subsidiary has a long history of service in the Essential Air Service program. With the addition of these three new cities, Air Midwest will serve 31 EAS communities across the country."
Last month, the company won the essential air service contract for Joplin that comes with an annual subsidy of $849,757.
The Columbia Regional contract brings immediate relief for local airline service, but some wonder if it's nothing more than a two-year Band-Aid.
Passenger traffic at Columbia Regional Airport has been in a free fall for more than a decade, and the slide accelerated after the Sept. 11, 2001, terrorist attacks.
In 1995, the airport reported 34,349 passenger boardings. Last year, the number was 19,957 -- a decline of some 42 percent. Through May 2006, the airport reported 6,747 passenger boardings, which was off 17 percent from the same period in 2005.
Subsidized minimum service isn't the right medicine, said John Ellis, an aviation consultant and former chief executive of defunct Ozark Air Lines.
"EAS is not good for Columbia at all," he said. "The sad part is that EAS subsidies provide little incentive to develop expanded routes."
Local travel agent Dan Stookey of Summit Travel said he's not in favor of the Air Midwest option.
"I question the frequency of two flights a day to St. Louis," he said. "I don't think that's enough."
And Stookey worries that Air Midwest lacks electronic ticketing and baggage agreements with all of the cooperating airlines that fly out of St. Louis. "We'll just have to sit back and see," he said.
Founded in 1965, Air Midwest was acquired in 1991 by Mesa Air Group, which operates 185 aircraft with more than 1,100 daily departures to 173 destinations in the United States, Canada and Mexico. Mesa Air Group operates as US Airways Express, Delta Connection, United Express, and independently as Mesa Airlines and go!, a recently launched island commuter airline in Hawaii.
Air Midwest, which serves 44 cities in 19 states, has a fleet of 19-seat Beechcraft 1900D turboprop aircraft. It provides service to 31 subsidized routes in 11 states for about $21.4 million a year in federal payments.
The company's EAS operation is a sizeable portion of the national program -- about 20 percent. Nationally, EAS subsidizes airline service to 154 communities for a total annual subsidy of $109 million, said Bill Mosley, a spokesman for the transportation department.
Air Midwest operates as America West Express in Phoenix, Mesa Airlines in Albuquerque and Dallas/Fort Worth and US Airways Express to hubs in Kansas City, Pittsburgh, Charlotte and Washington, D.C.
Three years ago, the company experienced an airline's worst nightmare.
On Jan. 8, 2003, Air Midwest Flight 5481 crashed shortly after takeoff from Charlotte-Douglas International Airport killing the two-member crew and all 19 passengers. The National Transportation Safety Board ruled that the aircraft malfunctioned because it was overloaded.
St. Louis-based Trans States Airlines, which does business in Columbia as AmericanConnection, has operated connecting air service to St. Louis since 1987. Trans States has been the only commercial passenger airline operating at the airport since Ozark Air Lines, a local startup that offered commuter jet service to Dallas and Chicago, discontinued service in 2001.
In February, Trans States gave 90-day notice that it would leave the Columbia market, which put the decision for a replacement carrier in the hands of the transportation department.
Trans States never got a federal subsidy to operate out of Columbia, company spokesman Bill Mishk said, but profits were marginal.
"It bounces around, and it was challenging," he said. "There have been periods when the route has been unprofitable."
The company said it no longer wanted to lease twin-engine turboprop planes used at the airport but go strictly with regional jet service, which could not operate economically on short flights out of Columbia.
"We wanted to transition out of the equipment," Mishk said.
Meanwhile, Trans States is working with Air Midwest to pull off a smooth service transition, which Mishk expects will happen in the late summer or early fall.
Herman Lueckenotte, who is trying to find investors to launch a commuter airline based in Columbia or Jefferson City, said the Air Midwest proposal was "ramrodded through" the Columbia City Council.
"They were so desperate," he said. "They wanted to try something different."
But the city had few choices.
Only Air Midwest and RegionsAir, an AmericanConnection operator that proposed four daily flights to St. Louis for an annual subsidy of $793,830, submitted bids. The airport advisory board recommended the Air Midwest proposal and the city council agreed.
The council made the right call, consultant Ellis said.
"Mesa was the better choice," he said. "It's profitable, has good service and resources."
Even so, Ellis said the service offered by Air Midwest is not what Columbia needs. He said St. Louis and Kansas City are not destination flights for local air travelers and van shuttle service to these airports is convenient and cost effective.
Ellis said the solution is for the city to change the airport's name to Mid-Missouri Regional Airport and hand it over to an airport authority governed by officials from Columbia, Jefferson City and the Lake of the Ozarks.
"We could change things but that would require some pretty aggressive moves," he said. "It requires the city of Columbia to relinquish parental control of the airport. But transferring ownership to an airport authority will improve the airport."
One of those aggressive moves, Ellis said, would be for a consortium made up of local businesses, government and universities to provide seat guarantees for a major carrier such as United to touch down in Columbia on flights between Chicago and Dallas. The plan would allow United to compete against its rival American Airlines and carry the more than 1 million estimated passengers who fly to St. Louis each year bound for resorts and conventions in the Lake of the Ozarks region, he said.
Mayor Darwin Hindman, who leaves tomorrow for Phoenix as part of a city contingent to meet with Mesa Air Group, said Ellis' idea is interesting but needs more study.
"I think we ought to explore every idea that comes along," he said. "It's a radical idea and it needs to be evaluated by more expert people than I am. The idea of subsidizing by private enterprise should be entered into with extreme caution. You've got to question that very carefully."
Hindman said city officials will prod Mesa for more flights to St. Louis.
"We'll try and make our case for even better service," he said. "I think we have a pretty good argument. It's my understanding that the present carrier has been making money out of those trips to St. Louis, so why shouldn't Mesa make money?"
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