Essential Air Service at Hagerstown, Maryland

Order 2006-10-12
OST-2006-25228

Issued October 20, 2006 | Served October 25, 2006

Order Selecting Carrier and Establishing Subsidy Rates

After careful consideration, including the community's views, we have decided to select Air Midwest's two-round-trip-a-day option to Pittsburgh at the annual subsidy rate of $854,452 through September 30, 2007.

The Department previously subsidized three-round-trip service at Hagerstown because it was necessary to accommodate the then-current level of traffic, but that is no longer necessary, due to declining traffic levels. When we last selected the three-round-trip option, enplanements at 1-iagcrstown averaged about 39 a clay, and they could not have been accommodated on just two round trips a day, which would have provided only 38 outbound seats for 39 passengers. In 2005, Air Midwest generated a total of 9,852 Origin & Destination passengers, or an average of 16 enplanements a day at Hagerstown based on a 313-day year to account for reduced weekend service. That level of passengers can be accommodated on Air Midwest's two round trips at a 42% load factor. We would also note that the subsidy requirement has increased significantly. For two-round-trip service, the carrier proposed an annual subsidy requirement of more than $200,000 above the amount the Department subsidized for three round trips in the current selection order. However, Air Midwest's service to Pittsburgh will provide the community with access to a major hub, and will meet the core objective of the program of maintaining access to the national air transportation system. Therefore, based on all of the above, we will select Air Midwest's Option 1, as proposed two nonstop round trips each weekday and each weekend to Pittsburgh, at the annual subsidy rate of $854,452.

By: Andrew Steinberg