Tupelo air service assured – for now

By Dennis Seid/NEMS Daily Journal

TUPELO – Two years ago, airline industry consultant Michael Boyd told a group of Tupelo Regional Airport, CDF and other officials, “In Tupelo, you can plan on uncertainty, surprises and unpleasantness” when it comes to future air service.
And that certainly has panned out.
Shortly before Boyd made his remarks in 2009, Delta Air Lines said it could not provide commercial air service in Tupelo and seven other cities across the country without a federal subsidy.
Delta got that subsidy last July, a two-year contract worth more than $900,000 annually through the U.S. Department of Transportation’s Essential Air Service program.
EAS, established in 1979, provides subsidized air service to some 150 rural communities in the U.S. and has been the target of proposed cuts for years.
Tupelo Regional is among four airports in Mississippi receiving an EAS subsidy. The others are Greenville, Hattiesburg and Meridian.
Another unpleasant surprise was announced earlier this month, when Delta said it couldn’t make enough money in 24 small airports across the country. Included on that list was Tupelo, Greenville and Hattiesburg. Atlanta-based Delta, which merged with Northwest Airlines in 2009, said it was losing $4 million in the 24 cities.
In Tupelo, Delta’s EAS contract ends next July, which means commercial air service is assured until then. Passengers who have bought tickets have nothing to worry about, said Tupelo Regional Executive Director Josh Abramson.
“Your tickets are safe,” he said. “The big question I have is will public perception affect our steady year-over-year increase of enplanements?”
In airport-speak, “enplanements” are boardings. From June of last year through May of this year, the boardings at Tupelo increased each month. Last month, boardings dropped slightly from the year before, but for the year, they’re still up about 8 percent.
More critical is the load factor, the percentage of seats that are filled in a plane. Delta said the load factor system-wide averaged 83 percent last year, compared to 52 percent in the 24 cities in which it said it was losing money.
In Tupelo, the load factor, according to Delta, was 41 percent. In Hattiesburg, it was 54 percent and in Greenville, it was 28 percent.
Despite the negative publicity, officials say the flying public shouldn’t bail out just yet.
Bill Mosley, a spokesman for the Transportation Department, said the airline must continue service in all the cities until a suitable replacement is found.
“Soon, we’ll be putting out RFPs – requests for proposals – for carriers interested in providing service,” he said.
Bids will be accepted for 90 days, but if a bid is not deemed acceptable or not submitted, DOT will extend the process, Mosley said.
At this point, what happens next is out of the airport’s hands, Abramson said.
“This process is in the hands of the DOT,” he said. “Delta’s contract is with them, not Tupelo. The airport authority and I have been prepared for this. We completed an air service study in March with the Boyd Group. They are one of the best in the business.
“I have talked to other air carriers, but the airlines and we are far from making final decisions. The aviation economy is in the same boat as the national economy. Fuel prices are high and the recovery is hanging on by a thread. The airlines, just like every other business, have been decreasing capacity and consolidating.”
The airline industry has had a tough decade, and consolidation has not made it easier for small airports.
“Take the major airport hubs of six major air carriers that consolidated into three airlines. The result is a reduction in hub airports,” Abramson said.
“This really stated to unfold in 2007 with Cincinnati. Half their flights went to Detroit. And Memphis? Twenty-five percent just went away. The regional airports that fed these hubs will drop off. Will Tupelo? I’m doing every thing I can to hold on to it.”
dennis.seid@journalinc.com