Essential Air Service at Cedar City, Utah

Order 2006-1-19
OST-2003-16395

Issued January 25, 2006 | Served January 30, 2006

Order Selecting Carrier - Bookmarked

By this order, we are selecting Mesa Air Group, Inc. d/b/a Air Midwest, to provide essential air service with 19-passenger Raytheon/Beechcraft B-1900D aircraft at Cedar City, Utah, for two years. The annual subsidy rate will be set at $897,535. We are also directing SkyWest Airlines, Inc., to show cause why we should not set the subsidy rate of $1,068,607 on an annual basis, for its provision of service from January 1, 2006, until Air Midwest inaugurates essential air service at Cedar City through March 31, 2008.

At $1,602,912 annually, Sky West's proposal would cost almost twice as much as Air Midwest's Option One for $897,535, which would provide 12 nonstop round trips a week to Las Vegas and 4 to Phoenix, and which it intends to operate as America West Express. Both proposals would provide service to major hubs: SkyWest's to Salt Lake City and Air Midwest's to Las Vegas and Phoenix. The cost of the Sky West proposal is also more than twice as much as its current annual subsidy of $770,285, yet would only provide an additional six weekly round trips.

Given the wide disparity in the amount of subsidy required to support these proposed services, we find that the overall objectives of the Essential Air Service Program are best served by the selection of Air Midwest. Its proposal could benefit Cedar City Airport users by providing additional options in connecting to the national air transportation system. Air Midwest would provide Cedar City with two nonstop round trips to Las Vegas each weekday and weekend and an additional nonstop round trip to Phoenix on Monday, Wednesday, Friday and Sunday, for an annual subsidy rate of $897,535.

By: Michael Reynolds