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April 07, 2023

Lycoming County officials grapple with roots of lost airline service

Credit: Sun-Gazette

A 2008 letter, received through a Right-to-Know filing, has raised questions about how and why the Williamsport Regional Airport lost participation in the Essential Air Service (EAS) program, which in turn resulted in the total loss of commercial flights out of the airport.

At their meeting last week, the Lycoming County commissioners were notably upset when it was revealed by director Richard Howell that the airport may have been cut from participating in a federal program that subsidizes air service to rural communities because of what was characterized as a bureaucratic decision at the Federal Aviation Administration.

But did a decision by the Williamsport Municipal Airport Authority in 2008 set the stage for the loss of commercial air service here when US Airways pulled out of serving the local airport in 2021?

The commissioners had asked Howell to provide documents so that they could determine what happened and how it could possibly be fixed. Howell came through with a timeline that detailed events that led up to the airport sitting empty of commercial air service.

As a result of the Airline Deregulation Act, in 1978 the federal government created EAS to help small, rural airports acquire air service. Williamsport was one of the eligible cities.

Twenty years later, in 2008, Piedmont Airlines, operating as US Airways Express filed a 90-day notice of termination with the Department of Transportation saying that they were going to terminate service with Williamsport, citing the high cost of fuel as the reason.

Up until this point, the Williamsport airport had not received subsidized air service.

“The airport never took anything from EAS,” commissioner Rick Mirabito said.

“The federal government never had to tap the EAS fund because there was sufficient traffic,” he added.

In 2008, according to information given to the commissioners, there were 80,000 passengers that went through the airport. By 2019, before the pandemic, the number had dropped to 40,000.

“I think that it’s really important for the public to understand the whole issue of repopulation in the county, that I’ve talked about at various times. The loss of population affects all the different aspects of our economy and our growth,” Mirabito said.

“The whole fact that we dropped that much in airport passenger traffic, I think is partially attributable to the problem of depopulation that we face as a county,” he said.

During those 11 years, the county population went from 120,000 to 112,000, and that was even with the growth in the gas industry locally, Mirabito noted

Faced with a threat by US Airways to discontinue service to the local airport, the authority entered into the bidding process to try to find another airline to fly in and out of the airport. One of the bidders was US Airways and another was Northwest Airlink (Mesaba Airlines). Northwest was the lowest bid.

“What happened was, the Airport Authority received a notice of termination from US Airways back in 2008, that they were going to terminate service at Williamsport. That triggered the airport authority to apply for the Essential Air Service subsidy, which was a bidding process that the Feds handle,” said Mark Murawski, who was chairman of the authority at that time. “Then, when the Feds went through the bidding, my recollection was that Northwest was the low bidder at that time.”

Northwest was offering service to Detroit, while US Airways connected with Philadelphia.

“The way I remember it, back then, basically people in the community were not happy with getting service to Detroit,” he said.

About 300 people in the community corresponded with the authority stating that they did not want to have service to Detroit, but preferred Philadelphia.

“And, you know, I guess if there was more local control in this federal process we might have had a different idea of where the service should have been provided, but it’s a federal program and they kind of run the show on it. That’s the thing you’ve got to be wary of,” Murawski said.

Both airlines, plus Colgan Air, which provides service to Dulles Airport, submit bids for three daily flights. The DOT says the bids do not meet the requirements for the request for proposal and ask all three to resubmit bids for two flights daily. They had determined that the required seat guarantee could be provided with fewer daily flights, plus, according to the documents, the subsidies that had been requested to provide air service were double the program average.

On Oct. 16, 2008, the DOT selects Mesaba Aviation to provide service to Williamsport, basing their decision on the fact that Mesaba’s bid was $400,000 less per year than Piedmont’s.

They stated that “the overall goals of the EAS program are best served by selection of Mesaba.”

At this point in the process, US Airways withdrew their termination notice and resumed service with three daily flights to Philadelphia, but without the EAS subsidy.

At the recent commissioners meeting it was stated that because they realized that it was not the lowest bidder, US decided to continue service without the federal funding, but according to the letter, it was the authority that asked the Department of Transportation to allow the airport to obtain service without the subsidy.

The letter, dated Oct. 22, 2008, stated, “In light of the steady decline in fuel prices, US Airways strong traffic on the reduced three round trip pattern that started in September, and the growing Williamsport area air service demand generated by natural gas exploration, the Airport and Community fondly hope that US Airways will reconsider its decision to request subsidy at Williamsport and instead decide to continue to serve the market without Essential Air Service support.”

A month prior to this letter, the authority had communicated to DOT that they were “disappointed” with the choice of Northwest stating, “We believe that US Airways service to Philadelphia will generate much more traffic than Detroit service under the Northwest brand.”

“Then I remember, US Airways decided to withdraw their termination notice and resumed the service without a subsidy from the Feds. That just meant resuming the prior service to Philadelphia,” Murawski said. “The thinking at the time by the airport authority was that if we had a choice between service with Northwest at Detroit through the EAS subsidy versus the current service we had in Philadelphia — the current service was preferred by the community to Philadelphia. … People would rather fly to Philadelphia and then connect from there than go out of Detroit with Northwest. That was the motivation behind the letter.”

Even though Piedmont did not utilize the federal subsidies available through the EAS program, Williamsport still remained eligible.

At that time, Murawski pointed out, the authority was trying to attract another air service, in addition to US, in order to offer competitive pricing for travelers.

“What the airport authority concentrated on back then was trying to get at least one additional carrier to compete with US Airways to try to lower prices because one of the complaints we had was that air service was too expensive here — that our rates were not competitive,” he said. “We thought if we introduce competition by attracting a second airline, then that would force US Airways to basically compete with that airline and lower fares.”

“Now, the other thing back in those days, I’m talking about the 2011-12 timeframe, we had some discussions with a number of airlines to see if they were interested in providing that competing service with US Airways,” he continued.

“But in just about every case, these other airlines expressed concerns about the terminal building, the old one. They were like, well, if you can do a new terminal building project and have more capacity to process passengers, because our waiting areas were very restrictive, then they might be interested in coming in and providing the service we were looking for. Our focus in those days was basically to get the terminal building project started,” he said.

In 2012, Congress passed legislation which said that if an airport had not used its EAS subsidies in 2011, they would revert back to the government and the airport would no longer be eligible for the funds.

Murawski admitted that he doesn’t recall a lot of discussion about that.

“Honest to God, I don’t seem to remember a big discussion about that. I’m not saying that didn’t happen. I just don’t remember a big push politically or anything to overturn that,” Murawski said.

“You have to remember using the EAS service in those days, it wasn’t giving us the desired service we really wanted through the bidding process because we have no control over the bidding process, basically, and the outcomes. It was like well, maybe we can negotiate on our own better,” he said.

“The whole environment is different today… It’s really hard for any small community to convince an airline to come in and provide service. That wasn’t necessarily the case back then,” Murawski said.

Referring back to the fact that the Williamsport airport had never taken any EAS subsidies, even though it qualified, Mirabito said that may have been one of the reasons the government did not get upset when the authority said they would take service without the funding.

But, he still questions the regulatory criteria that the Department of Transportation uses which would allow a carrier, in this case US Airways, to just drop the subsidies.

“Unfortunately, our community said we didn’t want to go to Detroit,” Mirabito said.

While the documents that the commissioners were given confirm that DOT followed a certain procedure in allowing the subsidy to be dropped, he questions why a hearing wasn’t held on the issue.

Although he has not read the comments received in support of keeping a carrier with service to Philadelphia and not Detroit, he said that he doubts that anyone from the community said they didn’t want the subsidy.

“I guess that if the Department of Transportation passed the regulations, knowing that there were going to be communities that needed subsidies to survive, I question why the Department of Transportation would allow the subsidy to be terminated without at least some sort of analysis of whether that was good for the community,” Mirabito said.

“It was obviously good for the federal government not to have to pay a subsidy. But was there any analysis done as to the impact on the community should the economic situation change? No one was expecting the economic situation to change? And of course, we know what was happening in 2008. The financial meltdown was putting a lot of pressure on the government to find ways to cut spending,” he said.

“I’m not necessarily blaming the Department of Transportation. What I’m saying is in light of the fact that material conditions have changed from 2008, wouldn’t it be both prudent and Fair for the Department of Transportation to say, listen the fact that the subsidy wasn’t needed, but it’s needed now, should not prejudice this community from getting it back,” he said.

Two bills have recently been introduced by Reps. Dan Meuser, R-Dallas, and David Trone, D-Maryland, aimed at addressing some of the issues facing smaller airports.

Commissioner Tony Mussare commented that he hoped that the bills would “gain traction.”

He also said that the commissioners “have a better understanding of the matter at this time.”