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'If it ain't broke, don't fix it': Rural Montana airports prefer Cape Air as federal contract runs out

'If it ain't broke, don't fix it': Rural Montana airports prefer Cape Air as federal contract runs out

Cape Air passengers board

Cape Air passengers board their plane in 2016 in Billings.

Eastern Montana airports are hopeful the U.S. government will keep Cape Air as its contract airline for rural parts of the state.

Since late 2013, Cape Air, of Hyannis, Massachusetts, has been offering the round-trip flights between Billings and five rural airports: Glasgow, Glendive, Havre, Sidney, and Wolf Point. Federal subsidies from the Essential Air Service make the flights possible, keeping customers' share of airfare down to $49 a flight. Butte and West Yellowstone also use Essential Air Service subsidies to connect to Salt Lake City.

More than 46,000 people flew to and from Montana’s rural communities on Cape Air’s 8-passenger planes in 2018, according Montana Department of Transportation data. Cape’s contract with the federal Department of Transportation expires later in 2019. The company, which would like to keep flying the routes, is one of three bidders to service rural Montana.

“Their ridership is up 188%. They’re on-time departures are in the 98% range. Each of the communities, as the representatives, have found no fault with Cape,” said Walt McNutt of the Richland County Airport Authority. “If it ain’t broke, don’t fix it.”

The Essential Air Service uses fees collected from commercial airlines combined with federal general funds to subsidize flights to rural airports that lost commercial service when the airline industry was deregulated more than 30 years ago. In that move to deregulate, airports like Sidney lost commercial service — in Sidney’s case from Frontier Airlines, McNutt said.

At the other end of rural EAS flights there’s always an airport with commercial flight connections. For Eastern Montana, that connecting airport is Billings Logan International, where Cape Air boards more passengers in a year than American Airlines does. Those rural flights have helped Billings hold steady as Montana’s second-busiest airport. Bozeman is first, with about 670,923 annual boardings, when compared with Billings’ 440,733.

“The subsidy cost per seat has really spiraled down because of increased boardings,” said McNutt, who is also a member of the state EAS advisory board. “There’s a magic number — it’s as high as a $1,000-a-seat subsidy. If you get over that, you’re too high,” and EAS program looks to cut service.

The lowest subsidy per seat in Montana right now is $216 because Cape Air is averaging six passengers a flight. The overall cost of Montana EAS service is in the millions. Cape Air’s contract to service six Montana communities is $13.3 million a year. SkyWest receives $1.5 million to service Butte and West Yellowstone, according to Federal Department of Transportation data. The total cost of EAS service in Montana has increased about $1.5 million since 2014.

Last year, Congress agreed to fund EAS for five years, but there have been numerous attempts by lawmakers to eliminate the program since its creation 30 years ago.


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