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OST-1999-6592 - EAS at Ponce, PR

http://en.wikipedia.org/wiki/Mercedita_Airport - Mercedita Airport

Essential Air Service at Ponce, Puerto Rico

Counsel:  American, Carl Nelson, 202-496-5647, carl_nelson@amrcorp.com

Order 2000-2-6 is prohibiting Executive Airlines, Inc., d/b/a American Eagle, from suspending service at Ponce, Rico, until suitable replacement service has been inaugurated and requesting proposals from carriers interested in providing replacement essential air service at the community.  American Eagle has reduced its service during that time. In these situations it is difficult to determine cause and effect, i.e., did declining traffic levels cause the reduction in air service or did the service reductions cause the decrease in passengers? American Eagle served Ponce with 12 nonstop round trips a week in 1997 and 10 nonstop round trips a week most recently. Ponce is a major community of 200,000 residents, 80 miles from San Juan. The close proximity of a major hub such as San Juan would normally favor frequent service with small aircraft. However, American Eagle's smallest aircraft in the Caribbean is the 46-seat ATR 42.

By:  Bradley Mims

By:  Randall Bennett

By:  Randall Bennett

By:  Randall Bennett

By:  Randall Bennett

By:  Randall Bennett

By:  Francisco Sanchez

By:  Dennis DeVany

By:  Randall Bennett

By:  Puerto Rico Ports Authority, Cesar Cintron, 

Counsel:  Verner Liipfert, Russell Pommer

By:  Departamento Desarrollo Economico Y Comunal, Miguel Mercado

Counsel:  Air Sunshine, M. Adili

In response to our request, only Cape Air submitted a proposal. Under its proposal, Cape Air would provide five nonstop round trips a day, seven days per week, to San Juan with 9-seat Cessna 402 aircraft. Cape Air would require $474,910 the first year and $337,551 subsidy the second year. This level of service is consistent with that required in Order 85-3-76, but is less than the number of seats the community has been receiving.  We have decided to select Cape Air. The service it proposes would accommodate recent traffic at Ponce. We note that the carrier estimates that it will need a great deal less subsidy in the second year of service, as a result of the increased traffic the carrier projects. We hope that in several years the need for continued subsidy support at Ponce may be eliminated. By flying smaller aircraft more frequently the carrier will be better able to accommodate the needs of people in the community who wish to complete one day of business in either Ponce or San Juan and return the same day.

By:  Francisco Sanchez

By this order, the Department is extending American Eagle's service obligation at Ponce, Puerto Rico, for an additional 30 days, through November 29, 2000.

By:  Randall Bennett

By:  Randall Bennett

Because a $50 million budget can no longer cover the program's current commitments, the Administration's budget proposal also includes a proposal to revise some of the standards under which communities are ineligible for subsidy-supported scheduled air service. Under the proposed revisions, communities would not be eligible if they are:

• Located within 100 highway miles of the nearest large or medium hub airport² The current standard is 70 highway miles for both large and medium hubs. Located within 70 highway miles of the nearest small hub airport. There is no current standard addressing communities' proximity to small hub airports.
• Located within 50 highway miles of the nearest non-hub airport offering jet service. There is no current standard addressing communities' proximity to non-hub jet service.

The statutory prohibition against continuing to subsidize communities requiring subsidy of more than $200 per passenger, except for exceptionally isolated points, would remain unchanged.  The proposed revisions would allow the Department to continue to meet its core obligation of ensuring that truly isolated communities continue to receive at least a minimum level of scheduled air service and thereby remain connected to the national air transportation system. At the same time, it would curtail spending for local service at communities that are within reasonable driving distances of service at other airports.

In light of the program's current spending rate and the Administration's budget proposal, we have decided to issue this statement of proposed policy now, to give the communities and carriers ample notice of the program reductions that we will implement in the event that Congress enacts them into law. Those reductions will result in the termination of subsidy at the 17 communities listed below as of October 1, 2001 -- the first day of fiscal year 2002 -- and will allow the carriers providing subsidized service at those communities to discontinue service on the same date, if they choose, without the need to provide individual notice. Implementation of the reductions at the very outset of the next fiscal year is necessary for program spending to remain within the proposed $50 million budget. Waiting to initiate the process until Congress has already acted could delay implementation of the reductions and require us to make even deeper program cuts, affecting more communities, in order to remain within our budgetary constraints.

By:  Susan McDermott

By:  Estado Libre Asociado de Puerto Rico, Vangie Rivera

The Mercedita Airport and the services provided are essential elements to maintain an appropriate contingency plan for air transportation in the Southern Region of the island of Puerto Rico. It's served a regional population of near 300,000 in this part of the island. Due to our physical configuration as an island, we strongly believe the continuity of services provide at the Ponce Airport, currently served by Cape Air are vital to guarantee the quality of air traffic at this site. In addition, we would like to bring to your attention that this airport will also play a major role as an element of an intermodal complex being promoted by the Government of Puerto Rico and the Municipalities of Ponce, Peluelas and Guayanilla.

By:  Commonwealth of Puerto Rico, Eng. Ramon Torres 

By:  Cape Air, Dan Wolf, 508.790.3122

By:  Hyannis Air Service

By:  Hyannis Air

We received a letter from Cape Air dated July 12, 2002, requesting that we allow it to temporarily reduce its scheduled flights. By Order 2000-10-20, issued October 19, 2000, Cape Air was selected to provide subsidized essential air service consisting of five round trips a day between Ponce and San Juan. The tragedy of September 11 greatly affected the national airline industry as a whole, and according to Cape Air, its enplanements in the Ponce-San Juan market have dropped in excess of 30% from this time a year ago. The carrier wishes to have the option to reduce that service to three daily round trips effective immediately. Cape Air would continue to operate the morning, mid-day and evening flights, and would only cancel flights with very few passengers booked. In those instances, Cape Air has assured us that it would rebook the passengers on a slightly earlier or slightly later flight at the same fare. Cape Air expects to return to its normal schedule no later than October 16, 2002. We have received correspondence from the Airport Manager of the Mercedita Airport in San Juan not objecting to Cape Air's temporary reduction in service. Due to the above factors, we will allow Cape Air to temporarily reduce its service from five round trips to three round trips a day effective immediately. For payout purposes, the carrier understands that it will simply not bill for flights not operated, consistent with longstanding program policy.

By: Dennis DeVanny

Correspondence from PJ Associates regarding Cape Air and its service between San Juan and Ponce, Puerto Rico.

By: Paul Frost

At the present time Cape Air is the only airline offering the community the air service needed for the area; meeting most of the region's needs. I believe that it is actreniely important for the future economic and social development of Ponce, that Cape Air continue offering the essential air service in our city in the years 2003 and 2004 from the Mercedita Airport.

By:  Luis Morales, City Council

By this order, the Department is tentatively reselecting Hyannis Air Service, Inc., d/b/a Cape Air, to continue to provide essential air service (EAS) at Ponce, Puerto Rico, for a new two-year period at an annual subsidy rate of $552,388, from January 1, 2003, through December 31, 2004.  We are also setting a past-period rate retroactive from January 1, 2002, through December 31, 2002, at $467,371 annually.

By: Read C. Van de Water

Order 04-12-19
OST-04-19622 - EAS at Mayaquez, PR
OST-99-6592 - EAS at Ponce, PR

Issued December 29, 2004 | Served January 4, 2004

Order Prohibiting Suspension of Service and Requesting Proposals

By this order, the Department is prohibiting Executive Airlines, Inc., d/b/a American Eagle, from suspending its unsubsidized service at Mayaguez, Puerto Rico, and requesting proposals from carriers interested in providing replacement service at the community. We are also requesting proposals for replacement service at Ponce, Puerto Rico, because that contract expires on December 31, 2004, and many of the same carriers might be interested in serving both communities.

By: Karan Bhatia

OST-00-6592 - EAS at Ponce, PR
OST-04-19622 - EAS at Mayaguez, PR

January 31, 2005

Re: Proposal of Hyannis Air Service d/b/a Cape Air

Respectfully submits the attached proposal requesting continuation of the subsidized essential air service between Ponce, Puerto Rico and San Juan, Puerto Rico. In addition, Cape Air would provide frequent and reliable service between Mayaguez and San Juan, Puerto Rico. Cape Air proposes to serve both of these markets with five daily round trip flights for the 8 months peak season and three daily round trip flights during the off-peak season, using 9-seat Cessna 402 aircraft. This aircraft type allows us to economically serve communities with maximum schedule frequency and service patterns that have proven popular and successful. The community of Ponce has supported this service in the past and both communities support this type of service going forward. Please see enclosed letters of support from community leaders.

Shortly after commencing service Cape Air expanded across southern New England to Hyannis, Nantucket, New Bedford, Martha's Vineyard and Providence, RI. In 1993, we began offering flights between South Florida and the Keys and in 1998, we commenced service in the Caribbean. In 2002 we initiated a Code Share agreement with Continental Airlines and in 2004 we began service in Micronesia expanding our fleet to include 3 ATR 42s. These 46 passenger aircraft serve the communities of Guam, Rota and Saipan.

By: Dan Wolf

January 24, 2005

Re: Antonio Fas Alzamora Letter in Support of Cape Air

By: Antonio Fas Alzamora

February 1, 2005

Re: City of Mayaguez Letter in Support of Cape Air

By: Jose Guillermo Rodriguez

January 27, 2005

Re: Luis Muniz Cortes Letter in Support of Cape Air

By: Luis Muniz Cortes

January 27, 2005

Re: Luz Arce Ferrer Letter in Support of Cape Air

By: Luz Arce Ferrer

January 20, 2005

Re: Carlos Hernandez Lopez Letter in Support of Cape Air

By: Carlos Hernandez Lopez

January 27, 2005

Re: Norman Ramirez Rivera Letter in Support of Cape Air

By: Norman Ramirez Rivera

January 21, 2005

Re: Jorge Santiago Letter in Support of Cape Air

By: Jorge Santiago

January 25, 2005

Re: Francisco Zayas Seijo Letter in Support of Cape Air

By: Francisco Zayas Seijo

OST-00-6592 - EAS at Ponce, PR
OST-04-19622 - EAS at Mayaguez, PR

January 26, 2005

Re: Modesto Luis Agosto Alicea Letter in Support of Cape Air

By: Modesto Luis Agosto Alicea

January 26, 2005

Re: Robert Arango Letter in Support of Cape Air

By: Robert Arango

January 27, 2005

Re: Roland Crespo Arroyo Letter in Support of Cape Air

By: Roland Crespo Arroyo

January 26, 2005

Re: Carlos Pagan Gonzalez Letter in Support of Cape Air

By: Carlos Pagan Gonzalez

January 27, 2005

Re: Jose Luis Rivera Guerra Letter in Support of Cape Air

By: Jose Luis Rivera Guerra

January 26, 2005

Re: Jose Aponte Hernandez Letter in Support of Cape Air

By: Jose Aponte Hernandez

January 27, 2005

Re: Kenneth McClintock Letter in Support of Cape Air

By: Kenneth McClintock

January 26, 2005

Re: Puerto Rico Hotel & Tourism Association Letter in Support of Cape Air

By: Wilhelm Sack

January 26, 2005

Re: Cirilo Tirado Rivera Letter in Support of Cape Air

By: Cirilo Tirado Rivera

Order 2005-03-02
OST-99-6592 - EAS at Ponce, PR
OST-04-19622 - EAS at Mayaguez, PR

Issued March 2, 2005 | Served March 7, 2005

Order Selecting Carrier and Establishing Subsidy Rates

By this order, the Department is 1) selecting Hyannis Air Service, Inc., d/b/a Cape Air to provide essential air service at Mayaguez and Ponce, Puerto Rico, for the two-year period through April 30, 2007; 2) establishing an annual subsidy rate of $688,551, beginning when the carrier inaugurates service at Mayaguez; and 3) establishing an annual subsidy rate of $622,056 for service at Ponce, retroactive to January 1 , 2005.

By: Karan Bhatia

Order 2007-2-4
OST-2004-19622 - EAS at Mayaguez, PR
OST-1999-6592 - EAS at Ponce, PR

Issued February 1, 2007 | Served February 6, 2007

Order Requesting Proposals

By this order, the Department is requesting proposals from carriers interested in providing essential air service at Mayaguez and Ponce, Puerto Rico, for a new two-year period, with or without subsidy, beginning May 1, 2007.

Specifically for Mayaguez and Ponce, we request proposals for service consisting of five nonstop round trips a week during the 8-month peak season, and three nonstop round trips a week during the 4-month off-peak season to San Juan with 8 or 9-seat aircraft, Normally, we would expect proposals consisting of service with two-pilot, twin-engine aircraft with at least 15 passenger seats. However, Cape Air has provided a higher level of frequency with smaller aircraft for a number of years, which both communities have supported. If carriers propose larger aircraft, e.g., 19-seaters, we would be inclined to authorize subsidy for two round trips a day, six days a week, year-round. We encourage proposals that meet these requirements in an efficient manner. Carriers are also welcome to propose more than one option, if they choose; they need not limit themselves to those requirements if they envision other, potentially more attractive service possibilities with subsidy requirements that remain competitive.

By: Todd Homan

OST-1999-6592 - EAS at Ponce, PR
OST-2004-19622 - EAS at Mayaguez, PR

March 7, 2007

Proposal of Cape Air

Hyannis Air Service Inc, DBA Cape Air, respectfully submits the attached proposal requesting continuation of the subsidized essential air service between Ponce, Puerto Rico and San Juan, Puerto Rico, as well as between Mayaguez, Puerto Rico and San Juan, Puerto Rico. Cape Air proposes to continue serving both of these markets with five daily round trip flights for the 8 months peak season and three daily round trip flights during the off-peak season, using 9-seat Cessna 402 aircraft.

Cape Air currently operates a fleet of 49 Cessna 402's in addition to 2 ATR 42's providing up to 650 flights per day. Cape Air is a code share partner with Continental Airlines facilitating world wide connections from small communities to the international air transportation system.

By: Cape Air, Dan Wolf, 705-790-3122x501

OST-1999-6592 - EAS at Ponce, PR
OST-2004-19622 - EAS at Mayaguez, PR

March 12, 2007

Requests for Community Comments of:

• Mayor of Mayaguez
• Mayor of Ponce

By: Dennis DeVany

March 26, 2007

Comments of Municipality of Ponce

For our future Economic Development Plans, including the Transshipment Port of the Americas Project, among others, the continuation of said services is of great importance.

Therefore, considering that Cape Air has proposed to continue the service and that no other carrier has expressed interest in serving the route, we endorse hereby said petition.

By: Mayor, Francisco Zayas Seijo, 787-284-4141

Order 2007-4-18
OST-2004-19622 - EAS at Mayaguez, PR
OST-1999-6592 - EAS at Ponce, PR

Issued April 17, 2007 | Served April 20, 2007

Order Selecting Carrier and Establishing Subsidy Rates

By this order, the Department is 1) selecting Hyannis Air Service, Inc., d/b/a Cape Air to provide essential air service at Mayaguez and Ponce, Puerto Rico, for the two-year period through April 30, 2007; 2) establishing an annual subsidy rate of $688,551, beginning when the carrier inaugurates service at Mayaguez; and 3) establishing an annual subsidy rate of $622,056 for service at Ponce, retroactive to January 1, 2005.

We have decided to select Cape Air to provide essential air service at Mayaguez and Ponce, as proposed. The proposed rates are reasonable for the service to be provided and the carrier's performance continues to be satisfactory. Moreover, both communities have expressed strong support for the carrier. We note that, under the EAS program's governing statutes, 49 U.S.C. 41732, Mayaguez and Ponce are entitled to service with aircraft offering at least 15 passenger seats. While Cape Air will be using 9-seat aircraft, both communities fully support the higher level of frequency with smaller aircraft.

By: Andrew Steinberg

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