Advanced Air Wins Essential Air Service Contract from Boutique Air – What You Need to Know

2023-05-12 07:00:00

Boutique Air loses rebid for essential air service following asking US DOT to end its current contract amid cost increases.

A vote by the Carlsbad City Council might mean that the Essential Air Service contract for the Cavern City Airport held by Boutique for eight years will be awarded to Advanced Airlines.

Board members voted 5-3 Tuesday night to recommend to the U.S. Department of Transportation (USDOT) that Advanced Airlines, an airline based in Hawthorne, California, receive the Essential Air Service (EAS) agreement.

Boutique’s Chief Executive Officer, Shawn Simpson, wrote in a letter to the USDOT dated February 9, 2023 that the San Francisco-based company wants to terminate its EAS agreement with the City of Carlsbad that was signed in 2021.

In the letter, Simpson wrote that the “cost increases in personnel, fuel, parts and services caused by the coronavirus pandemic are now hampering Boutique Air’s ability to operate under the original budget.”

Under the original agreement, USDOT was to provide subsidies ranging from $3.4 million to $3.6 million during a four-year period ending in 2025, according to USDOT documents.

In the letter, Simpson issued a 90-day notice to terminate its EAS contract and wrote that Boutique Air has the “intention to rebid at a subsidy that will support continued operations.”

More: Carlsbad selects new essential air carrier

On March 24, USDOT ordered Boutique to continue providing flights at Cavern City Air Terminal until a new carrier might be found.

The federal agency has requested at least two proposals for a new contract to begin two to three months following a new EAS agreement is signed, USDOT records read.

Proposals were due April 24, and Carlsbad City Administrator John Lowe said proposals from both Boutique and Advanced Airlines were received April 25.

Both California companies were the only ones to submit proposals, according to Lowe, as the USDOT did not request public comment until May 16.

An ad-hoc committee formed by Carlsbad Mayor Dale Janway and chaired by Ward 4 City Councilman Wes Carter reviewed both proposals on May 3. The committee decided to recommend Advanced Airlines, more commonly known as Advanced Air, to the city council, Lowe said.

Both proposals are being considered closely

Boutique Air has been providing EAS flights from Carlsbad since 2015 with 12 weekly return flights to Albuquerque and six weekly return flights to Dallas-Fort Worth (DFW).

The airline’s new proposal did not change the number of flights currently offered, reads the proposal submitted to the city of Carlsbad.

Simpson said in the proposal that air service would be operated with nearly nine modern aircraft for a period of two years.

Advanced Air proposed 12 weekly round trips to Albuquerque and seven weekly round trips to Phoenix in a four-year contract. The airline would not provide flights to Dallas/Fort Worth.

“The addition of a Phoenix option will provide flexible travel options not currently available in the area. An online survey found that flights to Phoenix in particular were of significant importance, not only as a final destination, but also for centralized and easy connectivity to other destinations,” reads part of Advanced Air’s proposal.

This is not the first time Advanced Air has bid for the City of Carlsbad’s EAS — having submitted proposals during the last two essential air service contract solicitations in 2019 and 2020.

Advanced Air projected revenues for its services under the EAS at $1.3 million and expenses at $6.2 million. In the first year of EAS subsidies, Advanced Air would receive $5.2 million; $5.5 million in year two; $5.8 million in year three; and $6.1 million in the fourth year of the contract.

Boutique Air projected revenues under the EAS contract at $1 million and expenses at $6.5 million. The company’s EAS proposal indicated that EAS would subsidize for two years: $5.7 million the first year and $6 million the second.

Proposed change controversial

Ward 3 Carlsbad City Council Member Karla Niemeier, Ward 1 Council Member Lisa Anaya-Flores and Ward 2 Council Member Jeff Forrest voted once morest awarding Advanced Air the EAS contract.

“I felt that the whole process was rushed,” Niemeier told the Carlsbad Current-Argus.

She said the EAS ad-hoc committee may not have received enough information to “make the best decision.”

More: Cavern City Air Terminal ends 2021 with more than 2,000 passengers taking off

Niemeier said the proposal should have been presented to the entire Carlsbad community before council members acted.

“Because we didn’t have time to get the community’s involvement and get the community’s input. I think they made the best decision they might with the information they had as far as the committee (was involved),” she said.

Niemeier’s biggest concern was the loss of flights to DFW, something she felt the City should have negotiated with Advanced Air to keep.

“Dallas is greatly needed by the people who support the core of the economy – the oilfield workers. If anything, Carlsbad should be increasing Dallas flights, not eliminating them,” Simpson said in an emailed statement to the Current Argus.

Flight data from the city of Carlsbad indicated that from January to March of this year, 1,544 people boarded planes from Carlsbad to Albuquerque, and 877 people flew from Carlsbad to DFW.

Ward 1 City Councilman Edward Rodriguez voted for Advanced Air and said he believes the committee made the right choice.

“I have great confidence in the effort that our committee has put in,” Rodriguez said during Tuesday’s meeting. “I recommend we go with the chairman’s recommendation and go with Advanced Air.”

Jason Shirley, a member of the EAS committee, said the six members of the committee worked to meet the requirements of an EAS.

“Many Carlsbad residents enjoy the flight to DFW. EAS is concerned with making sure you connect to the most important hub and so Phoenix meets that requirement,” he said.

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Shirley said Advanced Air’s service to Phoenix will provide options for area fliers, as Carlsbad residents looking for flights to Texas can travel 77 miles to Roswell and catch two daily American Airlines connecting flights from Roswell to DFW. American Airlines began flights from Roswell to DFW in 2007.

Jennifer Griego, interim director of the Roswell Air Center, said the community has lost its flights to Phoenix because of a pilot shortage.

She said the flights from Roswell to DFW have always been full and 15% of Eddy County residents travel to DFW via Roswell.

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Carlsbad travelers looking for flights to Houston can travel 70 miles to the Lea County Regional Airport in Hobbs. United Airlines offers daily flights from Hobbs to Houston, according to the Fly Hobbs website. Daily flights are also offered from Hobbs to Denver.

What is EAS?

More than 40 years ago, USDOT implemented the EAS program to ensure that small communities like Carlsbad would have a minimal level of scheduled air service, according to a USDOT website.

USDOT has been mandated to provide eligible EAS communities access to the National Air Transportation System with two subsidized daily round trips with 30 to 50 seat aircraft or additional recurring flights with nine seats or fewer aircraft, usually to a large or medium airport hub, the USDOT noted. .

The USDOT has not indicated how long it will take to review the City’s recommendation of Advanced Air for the EAS.

What do we know regarding Advanced Air?

Advanced Air operates flights between several cities in two states – California and New Mexico, with flights also to Phoenix and Las Vegas, Nevada.

In New Mexico, the airline provides service between Silver City and Albuquerque, between Silver City and Phoenix, and between Gallup and Phoenix.

This year, the company began providing flights between Las Cruces and Albuquerque and Las Cruces and Phoenix, the first flights from that city’s airport in more than two decades, according to the Las Cruces Sun-News.

The airline mainly uses a Beechcraft Super King Air 350. The twin-engine aircraft has a capacity of nine passengers.

Here is the layout of the interior of the King Air 350, described on Advanced Air’s website as “the world’s most popular business turbo.”

On its website, Advanced Air says the price for a nonrefundable ticket for flights to and from Las Cruces is $85.13 ($75 plus tax) or $105.28 for a ticket purchased in advance that is refundable.

The price for flights to and from Carlsbad by Advanced Air was not yet known.

Read the letter from NMDOT:

Read the order issued by the USDOT to Boutique Air:

Mike Smith can be reached at 575-628-5546 or by email at [email protected] or @ArgusMichae on Twitter.

The Las Cruces Sun-News contributed to this reporting.

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