Essential Air Service at Athens, Georgia

Order 2006-3-19
OST-2002-11348

Issued and Served March 22, 2006

Order Re-selecting Carrier and Establishing Subsidy Rate - Bookmarked | Word

By Order 2004-3-25, the Department selected Air Midwest to provide two nonstop round trips on weekdays and on weekends to Charlotte with 19-seat Beech 1900D turboprop aircraft for the two-year period ending May 31, 2006, at an annual subsidy of $392,108.  As the end of that two-year contract period was approaching, the Department issued Order 2005-12-3 on December 13, 2005, requesting proposals from carriers interested in providing EAS at Athens for a new two-year period beginning June 1, 2006, with or without subsidy.  In response to our request, we received proposals from only the incumbent, Air Midwest.

Air Midwest submitted two options, both of which would provide nonstop service to Charlotte with 19-seat Beech 1900D turboprop aircraft.  Air Midwest has a code-share agreement with US Airways at Charlotte, and would continue to serve the community as US Airways Express.  Under Option 1, it would provide 13 nonstop round trips per week (two each weekday and three over the weekend) for $624,679, and Option 2 would provide 18 nonstop round trips per week (three each weekday and weekend) for $938,481.

We have decided to select Air Midwest’s Option 1, which will provide Athens with 13 nonstop round trips per week to Charlotte for an annual subsidy of $624,679 using 19-seat Beech 1900D turboprop aircraft.  We find that the service and subsidy levels are reasonable.  The major reason for the significantly higher subsidy rate is higher fuel costs, representing almost $200,000 of the $233,000 increase over the carrier’s current subsidy rate.

By: Michael Reynolds