Air Midwest seeking OK to halt service to Joplin

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January 23, 2008

Anonymous The Joplin Globe Wed Jan 23, 2008, 09:23 PM CST

By Debby Woodin

dwoodin@joplinglobe.com

A new airline will have to be found for the Joplin Regional Airport.

Air Midwest, a subsidiary of Mesa Air Group Inc., is pulling out of Joplin and its other Midwest cities.

Both the airport manager, Steve Stockam, and a spokesman for the airline said Wednesday that Air Midwest’s decision will not leave Joplin without air service.

The airline’s service cannot stop until another provider can be found because the airline operates in Joplin under a federal Department of Transportation program. That program, Essential Air Service, guarantees air service to small communities.

“We are not losing air service,” Stockam said. He said Mesa’s contract to operate Joplin service expires in July. “Mesa has chosen not to bid on that again and asked to be released from its contract,” he said. “The DOT will not release them until another carrier is found.”

Air Midwest, which serves Joplin as US Airways Express, provides four flights a day during the week and two flights a day on weekends to Kansas City. It also provides four flights a day during the week and two a day on weekends into Joplin from Kansas City. The fare is $98.

The airline operates in Joplin with a subsidy of $850,000 from the EAS program.

Tom Bacon, vice president of planning for Mesa at its Phoenix, Ariz., office, said Mesa intends to sell Air Midwest or its assets. He said increased costs also are a factor in the decision to end Air Midwest service.

“We have our costs increasing; fuel has gone up,” he said. “We held in the market for two years with the same subsidy even if costs escalate. We have lost a lot of money over the past quarter or the past year.”

Mesa also was hit with a $90 million federal court judgment related to using confidential information it obtained from bankruptcy proceedings of Hawaiian Airlines to start a competing airline service. Mesa faces the possibility of another large judgment next month in a similar case with Aloha, another Hawaiian airline.

Bacon said that did not directly cause Mesa’s decision to seek to end its Joplin service. It did cause the company to hold its fourth-quarter earnings report for 2007 for adjustments. That report shows that the company posted a $90 million bond to hold the judgment while it appeals the court ruling, but that reduced its available cash by about one-third.

Stockam said Air Midwest’s flights to Kansas City were more popular than a previous carrier’s flights to St. Louis. He said the passenger count last year was up to about 34,000 from about 20,000 two years ago, when Trans States was the EAS carrier with flights to St. Louis.

A local travel agent, Jane Brown of Travel Planners, said more local travelers favor using Kansas City as a hub because it has more airlines, cheaper fares and more services than other major airports that have served as hubs to Joplin, except perhaps Dallas.

“If you’re flying out of Kansas City, it’s 90 percent cheaper to go out there than Tulsa, Springfield or Northwest Arkansas,” Brown said. Dallas also is a popular destination from Joplin, though less so, she said.

Air Midwest provided flights to Dallas until mid-2006 but ended them, citing declining passenger counts.

Brown said she hopes another carrier can be found to provide service to Kansas City. “If they had St. Louis, that would be OK too,” she said.

The EAS program was put into place after airlines were deregulated in 1978 to ensure flight service to small or rural cities that had airlines at the time that pulled out because of financial losses.

EAS initially cost federal taxpayers about $100 million a year, but decreased flights and increased profitability in some markets have decreased the cost to taxpayers in recent years to as low as $25 million, according to the DOT’s office of aviation analysis. Congress usually budgets about $50 million a year for the program.

The DOT paid $850,000 a year to Air Midwest for Joplin’s service. A total of 103 other cities in the United States receive EAS.

Other towns

Air Midwest has notified the DOT that it wants to end service to the other Midwest cities it serves, including Columbia and Kirksville in Missouri; Manhattan and Salina, Kan.; Grand Island and McCook, Neb.; and El Dorado, Harrison, Hot Springs and Jonesboro, Ark.