MARTINSBURG - The success of a new airline introducing flights to Pittsburgh in October will be a key factor in determining the future of passenger flight service at the Altoona-Blair County Airport.
If Sun Air's flights, during the first year of serving the airport, entice an average of 32 daily passengers - in any combination such as 16 passengers flying to Pittsburgh and 16 flying from Pittsburgh to Martinsburg - that will be enough to continue subsidies through the federal Essential Air Service program and flight service.
If passenger numbers fall short of the 32 per day average at the end of Sun Air's first year, it will keep the subsidy required to maintain passenger flights above the $200 per passenger cap.
That will prompt the federal government to initiate a plan to exclude the airport from the EAS program - an action that will end passenger flights.
It is going to get very hard in the future to meet the EAS program's qualifications, Altoona-Blair County Airport Manager Tim Hite said.
But Hite and others are hopeful that Sun Air's flight plan will help the airport increase passenger numbers so it remains in the EAS program.
Sun Air, a Fort Lauderdale-based commuter air carrier that serves the Lancaster and Hagerstown, Md., airports, will give the Altoona-Blair County Airport its best shot at staying in the EAS program, airport authority Vice Chairman Gary Orner said.
"I don't know that Sun Air is going to be to be able to build passenger numbers right off the bat," Orner said. "But I guarantee that Silver wasn't going to do it. ... And to stay with Silver would have been a sure defeat."
Silver Airways, also based in Fort Lauderdale, Fla., has held the EAS contract to provide flights at the Altoona-Blair County Airport since August 2012. But airport leaders had no interest in supporting Silver's retention of the EAS contract because passenger numbers have fallen, and Silver made no efforts locally to promote flights and ridership.
When the government, in February, asked for applications from carriers interested in serving the Altoona-Blair County Airport, it specifically noted that the airport's subsidy, at $1.99 million, equates to $255 per passenger - which exceeds the recommended subsidy cap of $200 per passenger.
The government calculated the $255 subsidy based on passenger numbers collected in the last quarter of 2012 and the first three quarters of 2013, which totaled 7,830 or an average of 13 passengers per day.
In the recent order awarding the EAS contract to Sun Air, the government again referenced the $200 per passenger cap and an enforcement plan notice. That plan specifies that airports qualifying for EAS subsidy will have their passenger numbers reviewed "beginning Oct. 1 and ending Sept. 30, 2015, and continuing each fiscal year thereafter." That equates to Sun Air's first year of service at the Altoona-Blair County Airport.
If a community's subsidy is higher than $200 per passenger after Sept. 30, 2015, the enforcement notice indicates that the department will initiate proceedings to "to show why the Department should not terminate the eligibility of the community in question under the EAS program."
In reaction to that notice, some airport and airport-related organizations have already filed a written objection with the government. But there's no indication from the government of a forthcoming change.
The $200 per passenger subsidy has not been adjusted since 2000, wrote Airport Manager Pamela Osgood of the Mason City Municipal Airport, Mason City, Iowa, in her response. Because the airports receiving EAS subsidy are a valuable part of the nation's air transportation system, she said it's time for Congress to consider raising the cap.
Sun Air's proposal
When Sun Air was competing for the EAS contract to serve the Altoona-Blair County Airport, company CEO David Hackett came to the Altoona-Blair County Airport Authority's meeting in May. He promised to build ridership with frequent flights, reliable service and attractive ticket prices. Hackett also, in his EAS application, indicated that money will be devoted to publicizing the flights.
"Marketing resources earmarked for the new routes by Sun Air are substantially above those historically spent," Hackett reported in his company's proposal for EAS subsidy. "Sun Air will be actively involved with the local communities, including on the (Pittsburgh) side and has already identified co-op marketing funds to support its initiatives."
Upon learning that Sun Air was selected to serve the airport, Hackett, reached via email while traveling outside the country, called the news great and said his company can be ready by the Oct. 1 start date in the government's order.
A flight schedule is not yet available, but Sun Air's proposal calls for four roundtrip flights per day on weekdays and three roundtrips on Saturdays and Sundays. It also calls for an early morning flight popular with business travelers and a flight schedule structured so passengers can make connecting flights.
"Local fares would be set for effectiveness of 'add-on' prices to flights from Pittsburgh, generally in the $29 to $59 range each way," Sun Air's proposal states.
Hite, who has been trying unsuccessfully for two years to work with Silver on building passenger numbers, said he is ready to begin working with Sun Air.
Increasing passenger numbers will cut the airport's $255 per passenger subsidy, Hite said.
Based on the government's order, Sun Air will receive $2.34 million in EAS subsidy to provide the airport with 26 roundtrip flights a week, which works to a subsidy of $890 per flight.
To stay below the $200 per passenger subsidy, the airport will need four to five passengers on every eight-seat flight between Martinsburg and Pittsburgh. Calculated in another way, the Altoona-Blair County Airport will need 11,730 passengers in Sun Air's first year to stay below the $200 per passenger subsidy cap.
Orner said it may be impossible to reach those kind of passenger numbers in the first year. But if Sun Air's flights generate a steady increase in ridership, Orner said the authority will be in a good position to appeal to the government to remain in the EAS program.
"There has been interest in trying to phase out the EAS program over the last eight years, and maybe this is their way of doing it," Orner said. "But there is an appeal process, and there's (U.S. Rep. Bill) Shuster's office. If we're making headway, I would think that will go a long way in the appeal process to keep us in the EAS program."
Money for marketing?
Sun Air's pledge to market and publicize the availability of its flights is something local airport leaders have heard before.
Leaders of Silver Airways offered that pledge but did no local advertising. At one point, a Silver company executive told the Altoona Mirror that flights were being marketed through online reservation systems.
Silver's predecessor, Colgan Air, offered a free flight to local media when it introduced the 33-seat Saab as a replacement for the 19-seat Beechcraft that was flying. But Colgan Air later incurred financial difficulties and was absorbed by Pinnacle Airlines, which did not reapply for the airport's EAS contract.
The Altoona-Blair County Airport, years ago, secured a small state grant to publicize the airport and its flights. But the authority has never had money to afford an ongoing advertising campaign to build ridership.
Blair County commissioners, aware of the forthcoming transition at the county-owned airport with Sun Air beginning to offer flights to Pittsburgh, said they're encouraged and hopeful. But at this time, the county is not in a position to offer any financial help, commissioners Chairman Terry Tomassetti said.
"Our money is very, very tight here," Tomassetti said. "But I think the airport will see a benefit from the schedule change and lower prices."
Convenience will attract passengers too, Commissioner Ted Beam Jr. said.
"With the fares that Sun Air has proposed, I think people will be willing to fly to Pittsburgh," Beam said. "And, they can park for free at the airport in Martins-burg, so that's going to be a factor."
Commissioner Diane Meling, liaison to the airport authority, said she has heard too many complaints about Silver's canceled flights. Sun Air's four daily flights, especially if the schedule is reliable, should be attractive to local business travelers, which will help build ridership.
What about the airport authority?
Tom Hite, who became chairman of the Altoona-Blair County Airport Authority in January, said he was happy with the government's selection of Sun Air to become the airport's EAS carrier. It was the company the authority recommended.
"I think we made the right recommendation," Tom Hite said. "Sun Air has the pilots. And they have planes."
Some of the responsibility for promoting Sun Air's flights to Pittsburgh will rest with the authority, which will be responsible for hiring a new airport manager this year because of Manager Tim Hite's pending retirement. Tom Hite and Tim Hite are not related.
"Tim is staying through the end of October," Tom Hite said. "And by then we hope to have a new manager on board who will be hired knowing that a new carrier is starting."
"This is going to be a team effort," Tom Hite said. "And we'll just do the best we can."