- Associated Press - Sunday, October 19, 2014

PIERRE, S.D. (AP) — Pierre has a history of asking the federal government for airport aid.

The latest effort by Pierre officials to obtain financial assistance for Pierre Regional Airport follows a series of attempts in recent years.

In 2003 - when Dennis Eisnach was mayor - the city asked for a grant from the federal government as part of the Small Community Airport Service Development Program. A total of $19 million was parceled out to 35 airports across the United States that year for the purpose of addressing air service and airfare issues.

The city requested the money for two reasons, according to a letter Eisnach sent to the Department of Transportation in June 2003. Eisnach said the funding would help “completely assist the existing and potential demand for air service in this region and develop an Air Service Master Plan to chart a course of improvement” and could be used to “develop a comprehensive marketing and advertising campaign to promote the airport and counteract the disenchantment with air service that exists in our community and region.”

With more than 70 pages of supporting documents, the city’s proposal included a comparison of airfare, public comments and a financial plan. The proposal said Pierre would provide a $50,000 matching contribution if the federal government awarded it a $150,000 grant.



At the time of the request, Great Lakes Airlines was providing subsidized flights via the Essential Air Service program between Pierre and Denver, the Pierre Capital Journal (https://bit.ly/1yeMs6i ) reported.

“In our opinion, receiving a subsidy for this route is not a satisfactory, long-term solution. They (Great Lakes) have been recipients of this subsidy for the past 19 months following 10 years of profitable service,” the proposal noted. “We are in a unique position to eliminate this subsidy by effectively marketing this route and enhancing this service to a profitable level.”

In 2004 - when four airlines were vying for EAS subsidies to provide service to Pierre - Eisnach sent a letter to an official in the U.S. Department of Transportation in an attempt to secure the grant.

“The City feels one of the keys to the long-term success of our airport is to become self-sufficient,” Eisnach wrote. “It is our opinion that programs such as the Small Community Development Grant Program and requiring some level of commitment from communities are worthwhile programs that increase the chances for long-term success and local independence from the EAS program.”

Two years later - 2006 - Eisnach once again wrote to the Department of Transportation, but this time he was recommending the approval of the latest application by Great Lakes to obtain EAS subsidies. He mentioned the community grant, which was approved, saying it helped work toward the city’s stated goals.

The following year, Pierre no longer received subsidies after Great Lakes offered to provide services for less than the proposal submitted by another company.

Then in 2009 - under current Mayor Laurie Gill - the city put together another Small Community Air Service Development Program Grant request. This time the city was seeking $67,500 to “recruit a low-fare carrier” to Pierre. Although the city promised to provide a 10 percent match from Pierre’s general tax fund, the grant was not issued by the federal government.

Communications between Pierre officials and federal authorities have continued in recent years due to additional complications in air service.

When Delta Airlines attempted to terminate its service to Minneapolis in 2011, the federal government intervened, requiring the airline to continue until Great Lakes could replace it in early 2012. City officials sent letters to federal officials voicing their concerns.

In recent months, the number of flights offered to Denver and Minneapolis by Great Lakes has declined due to the difficulties of implementing new Federal Aviation Administration rules on the minimum qualifications for co-pilots. The new rules resulted in a dramatic increase in cancellations and a significant reduction of on-time departures, prompting Gill to write to the Department of Transportation in January 2014.

“While Pierre has thus far not required subsidy, the last two months have seen such a shrinkage in its air service market that it will be difficult to rebuild sufficient confidence in air service to ensure a self-sufficient air service market,” Gill wrote. “We have reluctantly concluded that the only thing that will salvage our air service market is for the department to declare that the service being provided by Great Lakes does not meet the requirements of Essential Air Service, and open a proceeding for bids to provide this service.”

Gill concludes, “Our city is anxious to work with the department to bring about the kind of air service to which Pierre is entitled.”

Throughout the year, Department of Transportation officials have received subsequent letters from Gill, in addition to Sen. Tim Johnson.

On Sept. 15, Gill was granted her request when the Department of Transportation issued a request for proposals from air carriers interested in providing flights to Pierre. According to the proposal, air carriers can provide service with or without subsidy support for a two-year period. Proposals are due by Oct. 15 and will be provided to the public for comments.

Since the issuance of the request for proposal, Gill said at least one airline has contacted the city and asked for historical data of Pierre’s air service.

___

Since 1998, airline carriers providing South Dakota’s EAS-eligible airports have collected more than $55 million in subsidies, a Capital Journal review of U.S. Department of Transportation records indicates.

Six airports in South Dakota cities - Aberdeen, Brookings, Huron, Pierre, Watertown and Yankton - have benefited from the assistance of hundreds of thousands, and as of late, millions of taxpayer dollars each year.

This year, three airports in the state are being provided subsidized service from Great Lakes and SkyWest Airlines. In return, the two companies will receive over $6.4 million in federal subsidies in 2014 alone. EAS subsidies are given to the air carrier, not to the community served.

Over the past 16 years, the federal program and funding provided to carriers flying to the state’s subsidized airports have experienced a significant increase.

In 1998 - when $42.9 million in subsidies was split between carriers serving 101 airports throughout the United States - Brookings Regional Airport and Chan Gurney Municipal Airport in Yankton were provided service by carriers that received $678,374 for each airport from the EAS program. The two were South Dakota’s only subsidized airports until the Huron Regional Airport was added to the list of EAS beneficiaries in 2001. Great Lakes last received money for servicing Yankton in 2000, after the airport was eliminated from eligibility due to program reforms.

In the aftermath of 9/11, two more airports joined Huron and Brookings, with Pierre Regional Airport receiving funds starting in 2002, in addition to Watertown Regional Airport in 2003.

Pierre - which has historically received the least amount of subsidies of South Dakota’s airports - last had EAS funding in 2006. From 2002 to 2006, Great Lakes took in $1.8 million in subsidies, all for flights flown between Pierre and Denver.

Watertown - the first airport in South Dakota to break the million dollar barrier - received its first subsidies in 2003, with $1.8 million. Since then, Mesaba Airlines, which served the airport from 2003 to 2011, and Great Lakes, which took over in 2012, have taken in at least $1 million per year, totaling nearly $20 million. In 2014, Watertown broke a new threshold for South Dakota’s subsidized airports, when it netted Great Lakes $2.8 million.

Since 2001, air carriers providing service to Huron Regional Airport have taken in over $18 million in subsidies. This year the airport began a new two-year $2.5 million contract Oct. 1, according to airport manager Larry Cooper.

Aberdeen Regional Airport, which joined the list of South Dakota’s subsidized airports in 2012, has landed SkyWest $3.4 million.

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Information from: Pierre Capital Journal, https://www.capjournal.com

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