Essential Air Service at Macon, Georgia

Order 2007-10-22
OST-2007-28671

Issued and Served October 18, 2007

Order Setting Final Rates

On July 2, 2007, Atlantic Southeast Airlines, Inc. filed a 90-day notice of intent to suspend its subsidy-free service at Macon, Georgia, effective October 1, 2007. ASA provides Macon's only scheduled service. Order 2007-7-12, July 13, 2007, prohibited ASA from terminating that service, and required it to maintain service at Macon consisting of two daily round trips until replacement service could be secured. The order also requested replacement service.

We are continuing to seek replacement service at Macon. The carrier has agreed to a rate of $1,968,830 per year for two daily, nonstop turnaround trips to Atlanta with either regional jets or large turboprops -- the only aircraft in its fleet.

We have reviewed ASA's proposed rate and find it reasonable for the service provided. The calculation of this subsidy is shown in Appendix B. We note that this high level of subsidy is driven by the fact that ASA does not possess any aircraft smaller than regional jets or very large turboprops. The level of subsidy would likely be considerably less if the service were provided with smaller, less expensive aircraft.

In the meantime, ASA is entitled to be compensated for its service. We will continue to process the carrier-selection proceeding, and will relieve ASA and its code-share partner, Delta Air Lines, Inc., of this obligation as soon as possible.

By: Michael Reynolds