Lewistown, Miles City losing airline subsidies

2013-06-12T17:55:00Z 2013-06-28T13:31:11Z Lewistown, Miles City losing airline subsidiesBy JAN FALSTAD jfalstad@billingsgazette.com The Billings Gazette

The U.S. Department of Transportation ordered Wednesday that subsidies for Essential Air Service flights to Billings from Lewistown and Miles City will stop on July 15.

The decision comes one week after the DOT said that the EAS flights could temporarily continue.

“I guess the handwriting’s on the wall unless we can appeal that termination order somehow,” said Lewistown airport manager Jerry Moline.

During the last fiscal year, Lewistown flights on Silver Airways Inc. cost the federal government $2,009 per passenger, the DOT said. Per-passenger subsidies for Miles City flights cost $2,337. Both subsidies far exceeded the maximum subsidy of $1,000 set by Congress last year, making the cities ineligible for the program, the DOT said.

Silver, formerly Gulfstream International Airlines, could continue the flights without federal subsidies, but that’s unlikely. Last August, the Florida-based airline stopped its nonsubsidized flights from Billings to Helena because they didn’t attract enough passengers and the airline was losing money.

Silver flies from seven smaller Montana cities that cannot financially support regular commercial air service into Billings. The previous EAS carrier was Great Lakes Aviation, which flew into Denver.

During an attempt to win the bid away from Great Lakes in 2011, Silver executives promised Montana airport managers that passengers could fly into Billings and catch other flights to Denver if they wanted. But that didn’t always happen because of missed connections, Moline said.

“The problem was the planes out of here were late so often, they’d get to Billings and they were left at the gate,” he said.

Mickey Bowman, Silver’s vice president of corporate development, could not immediately be reached for comment.

Silver’s EAS contract to fly 19-passenger Beechcraft B-1900D planes to seven Montana cities expired May 31, but the subsidies for Glasgow, Glendive, Havre, Sidney and Wolf Point will continue until another bid is awarded.

DOT want all bids for Montana's next two-year EAS contract submitted by July 2. 

Montana politicians and local officials lobbied for the flights to continue to all seven cities, citing Montana’s vast spaces and the lack of rail and bus service to these areas. They also argued that passenger counts under Great Lakes were higher and they might come back.

But the DOT said legally it can look only at the previous year’s passenger count when deciding if a city qualifies for EAS service.

The DOT also noted that two years ago, Montana airport officials voted 6-1 in favor of Silver over Great Lakes when the EAS contract was rebid.

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