Order 03-01-14

Order 03-01-14

Essential Air Service Between Staunton, Virginia and Pittsburgh, Pennsylvania

Order 03-1-14
OST-02-11378

Issued January 17, 2003
Served January 23, 2003

Order Selecting Carrier and Establishing Final Subsidy Rates

90-Day Notice to Terminate Scheduled Air Service between Stauton, Virginia and Pittsburgh, Pennsylvania

After careful consideration of the carriers' proposals and the community's views, we have decided to select Colgan to provide essential air service at Staunton for a one-year period at its proposed annual subsidy rate of $623,667, with an extension for an additional year subject to the mutual agreement of the carrier and the Department.

Reaching a decision in this case was difficult, particularly in view of the continued strain on program resources. In some respects, Colgan's and Air Midwest's proposals are identical: both carriers propose 19 nonstop round trips a week to Pittsburgh with 19-seat Beech 1900 aircraft, and both have code-share alliances with US Airways, Inc., the dominant carrier at Pittsburgh. The choice therefore lies between Air Midwest's lower subsidy requirement versus the community's strong preference for Colgan, which it believes is more likely to return Staunton''s service to self-sufficiency in the long term. Given Staunton's history of nearly always being selfsufficient, we believe that the community's return to self-sufficiency is a realistic prospect, and we will not gainsay the community's opinion as to which carrier is more likely to achieve that objective. The difference in subsidy between the two proposals -- about $109,000 -- is not substantial in comparison with the long-term program savings that self-sufficiency would realize. We have therefore decided to give Colgan an opportunity to work with the Staunton community to rebuild the market.

By: Read Van de Water