Saturday, July 21, 2007
Three airlines want Merced route, even the one that wanted out
By Corinne Reilly
The Merced (CA) Sun
Three airlines want to provide passenger air service to and from Merced, including one that just two months ago announced its plans to stop all local flights. Phoenix-based Mesa Air Group said in May it wanted to drop flights to Merced and Visalia, reporting that it was losing money on the routes. But on Friday, Mesa and two newcomers – Vision Air and Great Lakes Aviation – submitted proposals to fly to and from the Merced Municipal Airport. All three are competing to score a federal subsidy that will allow one of them to provide local flights. Little will change if Mesa gets its way. If it’s awarded the subsidy, Mesa plans to continue its current schedule of four daily flights to Las Vegas’ McCarran International Airport. The airline, which operates in Merced as US Airways Express, was set to pull out next month.
Under its proposal, Las Vegas-based Vision Air would fly just once a day to the smaller North Las Vegas Airport. It would also provide a 55-minute flight to Long Beach once a day. Both the Long Beach and Las Vegas routes would include stops in Visalia.
Wyoming-based Great Lakes Aviation, which was rejected for the subsidy last year, would provide two daily nonstop flights to Las Vegas’ McCarran.
City spokesman Mike Conway said the city will review the proposals and then send a letter supporting one of the airlines to the U.S. Department of Transportation, which will provide the subsidy. “I think the first thing we’ll consider is their different business models,” said Conway. “We want someone who’s going to be solid, who’s going to stick around for awhile.”
This marks the second time in a year that Merced Municipal Airport – the only passenger airport in the county – has searched for a carrier. In 2006, Scenic Airlines abruptly announced it was taking off from Merced’s runways for good. Ten months ago Mesa stepped in, accepting a $1.6 million federal subsidy that should have kept the airline here for at least two years.
Mesa spokesman Jeffrey Hartz said the airline never planned to leave Merced. He said Mesa only announced it would stop service so that it could reapply for a new, larger federal subsidy.
Under the DOT’s rules, an airline that receives the subsidy must spell out in advance exactly how much money it will need each year to make up the difference between its expenses and its income (the subsidies are provided to carriers that serve small cities, where airlines are unable to make a profit without federal help).
Mesa asked for $1.6 million a year. But when its maintenance and fuel costs rose dramatically in the months after it signed the subsidy contract, Hartz said that Mesa had no choice but to do what it did. v
Now Mesa is asking for $3.2 million a year. “We’re hoping we can get (the subsidy) back,” said Hartz. “We want to stay long-term, but economically it just wasn’t working … Our only other option would have been to raise fares dramatically.”
Conway said it’s uncertain which airline the city will endorse. He said Vision’s plan to fly to Long Beach will likely score the airline big points. “A lot of people in the community have said they want a Southern California location like that,” said Conway.
But Vision’s Las Vegas flights don’t go to McCarran, as Mesa’s and Great Lake’s do. “Flying into an major, international airport is a huge benefit for residents who want to get connecting flights to other locations,” Conway explained.
He said ticket prices could factor into the city’s endorsement decision. Mesa estimates it will charge $88 for a one-way ticket to Las Vegas. For the same flight, Vision estimates it will charge $99. Great Lake projects that ticket will cost $117.
The city’s recommendation will weigh heavily on the DOT, which is charged with deciding which airline gets the subsidy.
Other government agencies, businesses and members of the public can also submit their input on which plan is best.
“We’ll review them, seek community comments and then come to a decision as soon as possible,” said DOT spokesman Bill Mosley. “But it’s difficult to say how long that might take.”
Mesa will continue flying from Merced on its current schedule until a new, two-year subsidy contract is signed.
In June, more than 1,200 passengers flew out of the Merced Municipal Airport.