Let the bidding begin.
The U.S. Department of Transportation is requesting bid packages from airlines interested in servicing YRA through the Essential Air Service program, according to a letter received by the Yellowstone Regional Airport board Sept. 7.
The main bidders for the contract are expected to be the same players as last go-around in late 2015: United Airlines and Delta subsidiary SkyWest, holder of the current contract.
In 1978, EAS was established in the wake of deregulation of the airline industry. Deregulation lowered ticket prices for customers but also threatened to leave isolated communities without air transport to hub cities as carriers got latitude to leave marginally profitable markets.
To prevent those pullouts, Congress created EAS, a federal subsidy which gives airlines flying to remote places a bonus for maintaining service.
Cody’s current EAS contract calls for SkyWest to be paid $1,076,100 over a two-year period ending in February 2018. In return for the federal payout, SkyWest has been contracted to operate at least 14 flights a week from YRA to Salt Lake City.
SkyWest’s EAS contract to service YRA is somewhat unique in that it is only in effect eight months of the year, because summer tourism brings enough travelers through the airport to support unsubsidized service between June and September.
Prior to SkyWest’s current EAS contract, which runs from March 2016 through February of next year, both United and SkyWest had EAS contracts for the airport, with each carrier responsible for seven roundtrip flights per week.
United’s hub-service connects to Denver International Airport. That airport provides more connection options for outgoing passengers than does Salt Lake City’s.
More than 1,500 commercial flights depart DIA daily, according to the airport’s website. Salt Lake City International Airport public relations and marketing director Nancy Volmer said for SLC, the number of daily departures is about 350.
In the last round of EAS-bidding two years ago, however, SkyWest made a lower ask for subsidy money, and DOT decided to award the contract exclusively.
Price point is not the only consideration DOT factors into the contract decision. Federal law also requires the DOT to give “substantial weight” to the recommendations of local officials – such as members of the YRA board, Cody City Council members, Park County Commissioners and state representatives.
After bidding is closed Oct. 16, DOT will field public comment for several weeks before making a decision.
“If the community has anything that they need to have put in the package, [DOT] will certainly take that into consideration,” airport operations manager Bruce Ransom told board members at their last meeting Sept. 13.
“The turn-around time for public comment is really short [compared to other comment windows],” YRA board member Bucky Hall noted. Hall is also president of Cody Yellowstone Air Improvement Resources, a nonprofit whose mission is to increase services to YRA.
As recently as April, the $175-million-a-year EAS program was under threat of elimination under a budget proposed by President Donald Trump, who called EAS wasteful. It was the latest challenge to EAS, which had program eligibility criteria tightened five years ago to limit participating airport numbers – and costs to DOT.
The program survived again, however, with Congress voting in May to keep funding in place, at least through 2020.
In Cody, CYAIR officers and YRA board members were part of the lobbying effort to get Wyoming’s congressional delegation to back off the cuts to EAS.
“They’re backing off [cutting EAS] pretty well because they got so much negative stuff from the commercial airport operators,” Hall said.
“I think there’s going to be a lot of action on [EAS] at [this] week’s [Wyoming Airport Operators Association] conference,” YRA Chair Bob Adrian said.
“I’m looking forward to that.”