Monday Insight – July 18, 2022

Subsidy Dollars For Leisure Passengers?
The EAS Program Is A Nightmare For Everybody – DOT Included

It Doesn’t Connect To The Air Transportation System.
It Only Serves A Small Part of The Consumer Base, Mostly Impulse/Leisure Passengers.
It Does Little To Make The Community More Business-Attractive.
It Appears To Offer Only A Few Flights A Week.

Yup. But it’s going to be providing EAS service at Eau Claire.

There seems to be a lot of legitimate scrutiny about Sun Country – a leisure-destination ULCC – being awarded over $6 million in Essential Air Service dollars at Eau Claire to provide mostly vacation/leisure flights to a couple of Florida destinations.

Just to cut to the chase… Ray Charles could see the problems with the DOT’s decision.

  • The Sun Country service does not meet the air access needs of Eau Claire. It’s just a few flights a week to leisure/impulse destinations, and two flights a week – count them, two – to MSP where there might be limited connectivity to a few SY destinations. But that’s it.
  • The Sun Country service, being ULCC in nature, will draw ridership from other small communities. That was not the intent of the EAS program.
  • The Sun Country service will not enhance Eau Claire as a business investment site.

The DOT Is Stuck In The Middle. It’s obvious as a gorilla in a china shop, that this situation really doesn’t fit the intended EAS objectives.

But the fact is that the Department of Transportation really doesn’t have a lot of options. Most applicants are small carriers that are in the “EAS business,” and some of the proposals don’t make a lot of sense. In the scramble to replace SkyWest/UA, a couple of communities recently only got applications for single-engine service, when the requirements are for multi-engine. So, the community rejected them, asking the DOT to get alternative applications.

Unfortunately, the folks at the DOT aren’t magicians. They really don’t have the ability to gin up EAS operator-applicants that aren’t there. They have to take what comes in from interested applicants – and these operators are getting fewer and fewer.

So, they get the Sun Country proposal for EAU to provide leisure-focused jet service to a few destinations in Florida, and two weekly flights to MSP.

With that, the DOT is faced with the decision to potentially give the award to another small-aircraft operator with fleets that are less than what consumers at EAU really want. (Assuming there is one that meets requirements.)

Or, there is this 737-800 ULCC operator that logically will generate hundreds of enplanements weekly. Not business enplanements, to be sure. And not service that is connective to the total air transportation system. But it will put a lot of people through that airport.

DOT knows that most of the usual-suspect small-airliner applicants don’t have the market horsepower to really make EAU fully connective, anyway. And, again, most operate aircraft that consumers don’t easily cotton to.

At the end of the day, the Sun Country application is a lot less policy-disruptive and a lot more capable of attracting passengers (albeit leisure passengers) than other applications.

At the least Sun Country is likely to generate willing passengers. No, this service in no way is essential to the business base of the region, but it’s a much better use of the funds than the traditional and usually ineffective alternative proposals with unbranded flights to points with low connectivity, anyway.

Sun Country is playing completely by the rules. They made an application up front and professionally, and the DOT knows full well of what they were honestly offering. The conundrum facing the DOT likely was that the other applications weren’t going to generate much more than fueling revenue for the EAU FBO.

This is a tough conclusion, but it is a fact. If not awarded to SY, the alternatives are placebo flights that won’t attract enough passengers to fill a Ford Econo-Van.

Actually, Beneficial For Other Communities In The Region. But Not In Delivering Air Access. Also, the concept that these SY flights will “divert” passengers from other airports in the region is not necessarily valid. Remember, the SY flights will be mostly to a couple of impulse-generated leisure destinations. That means it will, as with most ULCC service, draw traffic from a wide region. But most will not be core demand. And almost none will be business travel.

No More Uncertainty. EAS Needs To Be Rebuilt. Or Scrapped. Bottom line: The Sun Country award is actually a positive event. In a very real sense, this Sun Country situation is very positive in that it illuminates the need to re-think the entire program.

The main benefit is that it clearly illuminates the obsolescence of the current EAS program. On one hand it is no longer effective. On the other, the range of applicants that the DOT can consider is getting pretty thin.

Again, to assure we understand the nature of this service: It won’t make EAU more attractive to business. It won’t do a whole lot to connect the community to the air transportation system.

But that’s a description of the entire EAS program as it stands today, not just at Eau Claire. The DOT is stuck trying to administer a program that is 30 years out of date and addresses an air transportation system that’s been gone at least that long.

All that notwithstanding, will probably generate a whole lot more PFCs at EAU than any of the alternative applications. Leisure segment consumers will benefit with a spend option not there now, and the airline will be making money.

And maybe, just maybe, this could be the signal to rework the entire EAS program.


Final Comment for The Week

To read the media stories, the airline pilot shortage is causing all sorts of mayhem.

Small communities losing flights. The stories of dire hardships are recounted, often without much accuracy

Here’s a point: there is a pilot shortage causing this situation at smaller airports. But it’s a specific type of shortage, one that phalanxes of new pilots won’t fix.

This slide sums it up factually…

This is just one part of the latest Boyd-Swelbar Unvarnished video, which dives into a number of today’s most controversial aviation issues.

It’s 26 minutes of insight, perspectives and exploration that you won’t find anywhere else. If you haven’t logged on yet, click here and join us.

And be sure to let us know your thoughts by going to the comments, or just send an email.