Tupelo airport officials eager to start air service talks

TUPELO – As expected, Delta Air Lines has filed its termination of notice to the U.S. Department of Transportation, saying it intends to discontinue air service to eight U.S. cities, including Tupelo, as of Oct. 12.
But air service will continue uninterrupted as the airline enters into talks to get a federal subsidy to continue flying.
Officially, it was regional air carrier Mesaba Airlines that filed the notice Tuesday, but Mesaba is a wholly owned subsidiary of Delta.
The other cities affected by the move are Paducah, Ky.; Alpena, Mich.; Muskegon, Mich.; Hancock, Mich.; Sault Ste. Marie, Mich.; International Falls, Minn.; and Eau Claire, Wis.
In its letter, Delta/Mesaba says it “would strongly prefer to continue providing scheduled air service at these communities. Unfortunately, the deep recession, decreased customer demand for air transportation and resurgence in the price of crude oil has made it impossible for Mesaba to continue to operate these services without subsidy.”
The airline hopes to participate in the $120 million Essential Air Service now being applied to about 150 communities in more than 30 states.
The DOT is expected to issue a “hold in” order requiring Mesaba to continue flying out of the cities while the department conducts a competitive bidding process to select a carrier.
The timing may be good for Delta to participate in EAS. On Monday, the House Appropriations subcommittee voted to add another $53 million to the program next year, and there is strong support in the Senate.
Terry Anderson, executive director of the Tupelo Regional Airport, said he will ask the Tupelo Airport Authority for approval to hire an airline industry consultant who would help guide the airport and the city in its talks.
“We’re looking for a consultant, someone who gets along with the airlines but doesn’t necessarily fall in line with everything they say,” Anderson said. “It’s like having a neutral third party involved.”
During the bidding process, city leaders will be talking to Delta, other potential air carriers and other officials in Washington to determine the best route structure. The talks, however, are not open to the public.
“It’s not that transparent at all,” Anderson said.
In its filing, Delta hints that EAS participation is needed to help the communities – and itself.
“Delta remains committed to operating a broad network of service to communities across the United States – both large and small,” it said. “The decision to seek EAS subsidy … is part of a company-wide effort to stem losses and position Delta for success as the economy improves.
“Delta recognizes the special role air service plays to small communities and welcomes the prospect of continuing service under the EAS program.”
Now in need of help
While Tupelo has always been EAS-eligible, it has never had to dip into the program until now.
Passenger boardings hit a record 31,334 in 2006 – when both Delta and Northwest Airlines provided service. The number dropped in 2007 to 28,449 but fell by more than 40 percent, to 15,936, last year.
The decline a year ago was caused by several factors, including Delta’s decision to end service in January, record fuel prices and the onset of the recession that hammered the airline industry as a whole.
Delta said flying to Tupelo was not “economically feasible.”
It’s the same reason Delta gave last year when it said it was pulling out of Meridian and Greenville, both of which now participate in the EAS program.
Delta gets a $686,489 annual subsidy to provide service between Meridian and Atlanta and it gets another $1,355,693 for providing service between Greenville and Memphis.
How much the subsidy will be in Tupelo will be determined by the route structure agreed upon by all parties.
Contact Dennis Seid at (662) 678-1578 or dennis.seid@djournal.com.

Dennis Seid/NEMS Daily Journal