Order 02-10-40

Order 02-10-40

Essential Air Service at Glasgow, Glendive, Havre, Lewistown, Limes City, Sidney and Wolf Point, Montana

Order 02-10-40
OST-97-2605

Issued October 31, 2002
Served November 5, 2002

Order Requesting Proposals and Setting Interim Subsidy Rate

Essential Air Service at Glasgow, Glendive, Havre, Lewistown, Limes City, Sidney and Wolf Point, Montana

Order 2002-10-40, the Department (1) requests proposals from carriers interested in providing essential air service at the seven Montana communities, and (2) extends the current subsidy rate for the incumbent, Big Sky Transportation Co., d/b/a Big Sky Airlines, as an interim rate beyond November 30, 2002, the end of the current rate term, until the carrier selection case initiated here is concluded.

By Order 2000-11-11, November 13, 2000, the Department selected Big Sky to provide subsidized service at the seven Montana communities listed above by operating 12 round trips a week from Sidney to Billings, 5 round trips from Sidney to Bismarck, and 12 round trips a week from the other six communities to Billings with 19-seat Fairchild Metro III aircraft for the two-year period through November 30, 2002, at an annual subsidy rate of $4,952,234. However, by Order 2002-8-3, August 7, 2002, the Department revised Big Sky's annual subsidy rate to $5,716,559, effective October 1, 2001, through the remainder of the rate term, in recognition of the lower revenue and higher costs experienced by the carrier as a result of the September 11 terrorist attacks.

Big Sky has operated subsidized service at the seven communities since 1980, when it replaced Frontier Airlines, Inc. During the year ended June 30, 2002, the most recent 12-month period for which data are available, Glasgow averaged 6.3 enplanements a day, Glendive 3.1, Havre 3.0, Lewistown 2.3, Miles City 3.2, Sidney 6.7 and Wolf Point 4.8. On a composite basis, the seven communities averaged a total of 29.4 enplanements a day, a decline of about 18 percent from the previous 12-month period. The decline was doubtlessly attributable to the September 11 terrorist attacks; as we noted in Order 2002-8-3, the communities' traffic during the nine months following the attacks was 22 percent below the same nine-month period a year earlier.

By: Read Van de Water