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Feds approve new 4-year contract for Cape Air, rural Montana flight service

Feds approve new 4-year contract for Cape Air, rural Montana flight service

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Cape Air will continue providing subsidized flights between Billings, Sidney and four other rural Montana communities under terms reached Tuesday with the federal government.

The Massachusetts-based air service, which since 2013 has offered flights to Billings from Glasgow, Glendive, Havre, Wolf Point and Sidney, has been awarded a new Essential Air Service contract by the U.S. Department of Transportation. The contract begins in 2016 and ends Dec. 31, 2019.

“I’m pleased by the Department of Transportation’s excellent decision to renew Cape Air as the Essential Air Service provider for these communities,” said U.S. Sen. Steve Daines, R-Mont.

The federal EAS program subsidizes flights to rural cities that otherwise wouldn’t get commercial air service. The program was created after the federal government deregulated the airline industry, and some small communities began losing commercial flight service.

The current federal subsidy for Cape Air’s Montana flights is $11.9 million. That subsidy will increase in 2016 to $12.5 million and continue to increase to $13.3 million in 2019.

Cape Air’s $52 one-way fare paid by customers includes taxes and fees and will be the standard fare for the next two years until the EAS contract is rebid.

Cape Air flies a fleet of 75 Cessna 402s, of which nine are in Montana.

In addition to U.S. routes, Cape Air flies 28 airplanes in Puerto Rico and uses two ATR 42-seat planes, the largest in its fleet, connecting Guam with other islands in Micronesia.

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