Council Votes to End Air Service Subsidies, Airline Still Interested

Although the Visalia City Council voted to forego selecting another air carrier in favor of a government “buyout” program, the city’s airport may still see passenger service in the not-too-distant future.

The council voted unanimously to shift from the Essential Air Service (EAS) program, a Department of Transportation program that subsidizes airlines to serve small cities like Visalia, to the Community Flexibility Pilot Program (CFPP), which pays cities to forego EAS – and subsidized air service – for 10 years in favor of a direct payment of two years’ worth of subsidies.That funding could be used to improve airport facilities.

But, one airline has stated that itmay consider serving Visalia without the subsidy program.

Mokulele Airlines is exploring the idea of taking on the Visalia market anyway.

“We were disappointed to hear the council opted for the buyout program,” said Ron Hansen, Mokulele Airlines’ CEO.

“We are waiting to hear what Imperial does,” he said.

Imperial County suffered the same fate as Visalia when SeaPort Airlines pulled out of California. It, too, was left without an air carrier.

The three airlines that bid for Visalia’s service – Mokulele, Boutique Air and Great Lakes Airlines – also bid for Imperial’s service. There, the cities of Imperial and El Centro voted to endorse Mokulele’s bid, while that county’s Board of Supervisors voted in favor of Boutique Airlines.

The DOThad not awarded service to either airline as of press time.

If Mokulele is awarded Imperial’s service, it would be flying between the Imperial/El Centro Airport and Los Angeles. At that point, adding flights between Los Angeles and Visalia may be feasible.

“We believe Visalia is a good market and could be very successful,” Hansen said.

During the Visalia’s recent council meeting, the city’s Airport Advisory Committee recommended the city enter into the CFPP buyout program instead of selecting another carrier after serious concerns regarding EAS program restrictions.

Visalia will be the first airport in the country to take advantage of the CFPP option, which has been available since 2004.

Visalia is applying for $3.7 million, which CFPP may provide the city in exchange for sitting out of the EAS program for 10 years. If approved, funding under the program could be used to enhance the airport such as building new hangars and other facilities which could attract cargo and private operations.

SeaPort Airlines served the airport since February 2015, but ceased service overnight on January 15, citing the nationwide pilot shortage affecting regional airlines across the nation.

Prior carrier Great Lakes Airlines had served Visalia from 2008 to 2015, but saw its reliability falter due to the same pilot shortage.

Any carrier that would operate out of Visalia, through the subsidy program, would need to have an effective per-passenger subsidy of under $200 per person. If it went above that limit, Visalia would lose its subsidy anyway – and it would no longer be eligible for the program.

SeaPort Airlines, Visalia Airport Manager Mario Cifuentez said, had managed to hit nearly 10,000 passengers during its time at Visalia. But somewhere between 30-40% of those passengers were simply flying from Burbank to Sacramento, or vice-versa, using Visalia as a stopping point, he said.

While SeaPort was successful in raising passenger counts, the subcommittee stated in its report to council that it was incredibly unlikely any of the three carriers that bid for service would meet that subsidy cap. Cifuentez echoed these concerns to the council.

The program does not mean that passenger service at the airport would be forced to end – airlines would simply be forced to operate at Visalia without a subsidy, Cifuentez said.

Councilmembers said that while it was unfortunate that the community could lose service, they looked forward to the possibility of attracting companies to the city by upgrading the airport’s
facilities.

“This is a good opportunity to market the airport differently,” Councilman Greg Collins said.

The lack of reliability of the airlines serving Visalia has “been a problem” for the last 16 years, Councilmember Bob Link said.

“It could also help the Industrial Park,” Link said. “I support it 110%.”

“I’m totally supportive,” said Mayor Steve Nelsen.

“We’ve been burned [by air carriers] twice,” said Nelsen, referring to service from SeaPort Airlines and Great Lakes Airlines.

“This is a chance to rebrand it [the airport],” Nelsen said.

Through monthly lease and landing fees, the airport has generally been receiving $40,000 annually in revenue from airlines serving Visalia, Cifuentez said in an interview. That’s $400,000 in 10 years versus $3.7 million, he said. He added that he did not know whether the city would receive one lump sum or would be reimbursed project by project.

Cifunetez was to meet with DOT representatives and file for the buyout program funds.

“It’s a viable program,” he said, “but no one has done it before.”

8 thoughts on “Council Votes to End Air Service Subsidies, Airline Still Interested

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  1. This doesn’t make any sense. BoutiqueAir is already here in CA and their proposal shows triple higher passenger counts after picking up from Great Lakes and SeaPort, if that’s supposedly the problem. Why not choose them, seems like a no brainer. We just want a better airline that still goes north and south, not $3.7 million to improve an empty airport or entice some random Hawaiian soup can puddle jumpers.

    • Vic, Boutique’s subsidy was in the order of 3.5 million dollars, or 3.6 million for service to Sacramento.

      Boutique’s own projected passenger count was lower than would be required for Visalia to keep subsidized service.

      If Boutique took over service and failed to meet the required passenger count, which is likely based on historical numbers at the airport, you wouldn’t have “a better airline that still goes north and south,” you’d at best have to deal with your random soup can puddle jumpers, or at worst deal with the soup can bus to Fresno.

      While I disagree with the idea of shuttering service at the airport for ten years, taking three million dollars makes a lot more sense than zero dollars.

  2. So the Board of Supes voted in favor of Boutique Airlines to give us both NorCal and LA flights, then suddenly decided to ask for the same amount of government $$ for NO airline and NO flights, but Mokulele “might be interested” in charging us higher fares after all the money is spent to “rebrand” and “market” such a tiny airport? This is a mayor problem, not a marketing problem.

  3. I’m 100% behind the council’s decision! Use the money to make the airport better…in time Visalia will be big enough to attract a REAL airline without the need for subsidies…till then focus on cargo and making the airport bigger and better.

  4. The EAS is a stupid make-work program that should be abolished. If there was demand for flights, an airline would come and fill it. Why does the government pay airlines to fly empty planes while the local passengers drive to another airport?

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