Two years after Silver Airways won the federal contract to fly Montana Essential Air Service routes, the Florida-based airline said it won’t bid again.
Silver has formally filed the required 90-day notice with the U.S. Department of Transportation that it wants to cease Montana operations and transfer its Beech 1900D airplanes to the airline's Cleveland operation.
However, the EAS flights will continue as Silver is legally bound to continue flights between Glasgow, Glendive, Havre, Lewistown, Miles City, Sidney, Wolf Point and Billings until another carrier takes over. The Transportation Department has extended the deadline to submit bids on the Montana routes until July 15.
As previously announced, the EAS flights to Lewistown and Miles City will be discontinued July 15 because ridership is too low to qualify for the federal air transport subsidies.
Mickey Bowman, Silver Airways' vice president of development, was in Billings on Friday telling some of airline’s employees and subcontractors of the decision. He said the decision hinged on whether it made economic sense to sign another two-year contract with five instead of seven cities to serve.
“Our problems are with what’s going to happen, particularly after we lose Lewistown and Miles City,” Bowman said. “It’s all a matter of unit costs, and it wasn’t going to work out.”
Kevin Ploehn, assistant director of aviation and transit at Billings Logan International Airport, said he wasn’t surprised at the announcement because Montana is a long way from the Florida-based airline and one of its few winter routes.
“We liked working with them. I think the communities liked working with them,” he said.
Ploehn was less certain about the chances of landing another EAS carrier.
“We’ll get bids. It’s going to depend on what those remaining five markets want. They may not be on the same page,” he said.
Silver’s EAS contract ran out at the end of May, but the Transportation Department extended it indefinitely.
After talking with Montana airport officials, Bowman said he had heard of some other airlines that might bid on Montana, including Great Lakes Aviation of Cheyenne, Wyo.
Great Lakes flew the Montana routes until it lost the bid two years ago to Silver.
Other carriers that might be interested in Montana EAS routes include Cape Air based in Hyannis, Mass., Seaport Airlines of Portland, Ore., and SkyWest Airlines, Bowman said.
The next bidders may not want to fly to all five cities but may cherry pick the best.
Silver’s three daily weekday flights to Sidney and the Bakken oil field had 55 percent ridership, the best in Montana, he said. The Glasgow-Wolf Point route had about 40 percent of the seats filled.
“Ridership on all of the other routes was extremely low,” he said.
Some Montana airport managers said their passengers liked Great Lakes because it used Denver as its hub, not Billings.
But Bowman said Silver did better in three cities than Great Lakes did.
Glasgow-Wolf Point flights were about 33 percent higher ridership than Great Lakes and flights between Sidney and Billings had twice as many passengers.
Silver has 49 employees in Montana. No pilots will be furloughed, and employees in good standing will be offered other jobs in the airline, the company said.
Another factor in Silver’s decision was the House of Representatives trying again to cap EAS funds, Bowman said. The program is designed to help smaller communities that can’t afford commercial air service without federal subsidies.
“That all conspired to make it difficult for us to carry through for another two years,” Bowman said.
Silver has been replacing its 19-seat airplanes, the Beech 1900Ds, with 34-seat Saab 340BPlus. Silver flies EAS routes out of Cleveland, Washington/Dulles International Airport, and Atlanta.