Subsidized ND flights will cost taxpayers more than $125K per week

By Rob Port | North Dakota Watchdog

JAMESTOWN, N.D. – North Dakota’s congressional delegation is celebrating a new Essential Air Service contract for commercial flights into Devils Lake and Jamestown, but the numbers might leave taxpayers feeling cold.

Department of Transportation’s Assistant Secretary for Aviation and International Affairs Susan L. Kurkland, last week signed an order granting SkyWest Airlines more than $6.35 million in subsidies to provide 11 weekly round-trip flights between the two cities and Denver from April 1 through June 2016.

That’s up 32 percent from the more than $4.79 million Great Lakes Aviation was paid during the previous two years for providing flights between the cities and Minneapolis.

The DOT estimates that SkyWest will make 2,242 trips to both cities per year. SkyWest’s proposal estimate that 16,000 passengers would be served between the two cities with a $5,500-$5,700 round trip subsidy per flight, or more than $125,000 per week in subsidies.

Based on SkyWest’s proposal, the flights would average about seven passengers per trip, though the airline is required by the DOT order to use a regional jet with 50 seats. Data from online flight tracking website FlightAware put the average number of passengers on flights to Minneapolis during the past year at 15 for Jamestown and eight for Devils Lake.

SkyWest’s proposal calls for a roughly $400 per-passenger subsidy from each city, with the average fare paid by the passengers coming in at a little more than $100.

“This is an example of the way federal, state, and local officials can work together to deliver results to improve the lives of North Dakotans,” U.S. Sen. John Hoeven, a Republican, and U.S. Sen. Heidi Heitkamp, a Democrat, said in a joint news release issued along with U.S. Rep. Kevin Cramer, a Republican. “As a result of this decision, Devils Lake- and Jamestown-area residents will have access to quality, reliable air service. This is also a big win for the local economies, which greatly benefit from the air service.”

In a letter dated Jan. 17, the North Dakota delegation asked the Department of Transportation to approve the EAS bid despite the increase in subsidies and the proposal falling short of the program’s 12-weekly flight minimum.

Great Lakes Aviation put in a proposal requesting a subsidy for both cities amounting to $1.6 million less than SkyWest, but it was rejected after the DOT cited the airline’s performance.

“Although Great Lakes has submitted a proposal in response to the (request for proposals), the carrier has provided no concrete evidence that its operational problems will be resolved, thereby enabling it to meet the terms of the new contract,” Kurkland wrote in the order. “We note that for the last several months, the carrier’s completion factor has continued to deteriorate at Devils Lake and Jamestown. Although Great Lakes’ proposal requesting $3,998,951 requires the lowest subsidy of all proposals, and fully meets the communities’ EAS level, we cannot select it because we cannot currently rely on it to provide the service it proposes.”

Sovereign Air also put in a bid for more than $4.7 million, providing 24 weekly trips to each city.

The EAS program was created after the Airline Deregulation Act of 1978, which allowed airlines to move out of unprofitable markets. According to the DOT website, ”The Essential Air Service (EAS) program was put into place to guarantee that small communities that were served by certificated air carriers before deregulation maintain a minimal level of scheduled air service.

Contact Rob Port at rport@watchdog.org.

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