City of Visalia grounds air service program
By Reggie Ellis
visalia – There is nothing essential about a program that has failed twice and on its best day only benefitted a quarter of its potential customers.
That was the thought process behind the Visalia City Council’s March 7 decision to apply for federal grant funding to improve the airport, but would suspend the City’s participation in the Essential Air Service (EAS) program under the Department of Transportation (DOT). The program was formed out of the deregulation of the airline industry in the 1970s to reduce voids in outlying communities through subsidizing regional air carriers.
Mario Cifuentes, manager of the Visalia Airport, led a discussion of the City’s options for air service following the abrupt end of SeaPort Airlines, the most recent carrier to sign an EAS agreement with the City of Visalia. Without any notice, SeaPort announced on Jan. 15, 2016 that it was withdrawing from all markets in California, Missouri and Kansas. Within days, the DOT issued an Emergency Order seeking proposals to 30 carriers interested in fulfilling air service at those EAS airports. On Feb. 3, the DOT received just three proposals to provide subsidized service at Visalia, including Great Lakes Airlines, which pulled out the Visalia EAS in 2014. “It is unlikely that the community will have faith that Great Lakes can establish and sustain a dependable air service,” Cifuentes wrote in his report. The other two airlines – Boutique Air and Mokelele’s – would need to carry far more passengers per year that SeaPort did in 2015, the best year on record for an airline in Visalia since 2007, meet the subsidy limit of $200 per passenger.
“The fact that SeaPort airlines withdrew from our market after such a successful year caused the Subcommittee to first take a look at the overall state of regional air service,” Cifuentes stated in his report.
Cifuentes said it was unlikely that any of the three proposals would result in enough annual passengers to remain below the $200 per passenger subsidy requirement. If the subsidy were to go over the cap, which it did by $4 for most of 2015, the DOT would terminate Visalia’s eligibility in the EAS program.
“In other words, at least 75% of Visalia air travelers have chosen not to fly from Visalia. Given that travel pattern, which is typical for Californians, it is easy to understand why an air carrier would prefer to focus their personnel and equipment in just one market and let their consumers come to them instead of choosing to be in several small airports,” Cifuentes reported.
That, in turn, would disqualify the City from participating in the Community Flexibility Pilot Program. Created in 2004, the program allows up to 10 communities to waive their right to the annual EAS subsidy for 10 years in exchange for an airport grant equal to twice the subsidy paid to the most recent carrier for the previous 12 month period. For Visalia, that would equate to a grant of approximately $3.7 million that can be used for any Airport Improvement Program (AIP) eligible project, such as hangar development, aircraft apron construction or navigational aids. During the Airport’s participation in this program, the airport would maintain its eligibility in the EAS program, but would simply waive subsidy eligibility for the ten (10) year period. After the ten years was up, Visalia would once again be eligible for subsidy, if the EAS program is still in existence and program criteria at that time are met.
“This decision doesn’t preclude us from air service but just from the subsidized air fare,” Cifuentes said.
If the World Ag Expo is any indication, Cifuentes said the program would help improve commercial, private and freight traffic in and out of the airport. During the world’s largest farm show, he said “corporate jets were stuffed in every corner.” Private jet manufacturers, such as Cessna and Beachcraft called the airport for permission to set up displays of their latest products in anticipation of the high volume flying for the farm show in Tulare.
“If the demand is there, then an airline will come in and provide passenger service,” Cifuentes said. “But here and now, here is money that could provide us with an opportunity to do revenue generating projects.”
Vice Mayor Warren Gubler said he has served on the airport committee for the last six years and has seen companies fail due to changes in the industry regarding the number of hours a pilot can fly and a deficiency in the number of pilots ready to fly.
“I think we should make this a more commercial friendly airport and cater to UPS and Fed-Ex,” he said.
Mayor Steve Nelson said he was tired of seeing the City and its citizens get “burned” and saw the change as an opportunity to rebrand the Visalia airport as an executive airport halfway between Los Angeles and San Francisco. When asked what the downside to the Community Flexibility Pilot Program was, Cifuentes replied, “No one has ever applied for the program.”
Despite the unknown, Councilmember Amy Shuklian said going with something the city knows will probably fail versus something that might not was an easy choice for her.
“It would be irresponsible to put some other company in there and set ourselves up for failure in 6-9 months,” Shuklian said.
The City Council voted unanimously to approve a grant application for the Community Flexibility Pilot Program for $3.7 million in exchange for a 10-year waiver from the Essential Air Service program.
If approved, Cifuentes said the city would have three years to spend the funding and that the funding must be spent on improvements to the airport. Supplemental programs such as improving bus service to and from the airport, would not be rated well in terms of applying for the funds.