Hot Springs officials call to keep regional airline

HOT SPRINGS — Southern Airways Express was not the first choice to service Hot Springs Memorial Field two years ago, but its performance since then has convinced the city it’s the best airline for the job.

The Hot Springs Board of Directors has asked the U.S. Department of Transportation to continue subsidizing Southern Airways flights into and out of Hot Springs when the airline’s contract expires in February. Hot Springs is an Essential Air Service city that benefits from federally subsidized flights that connect small airfields to large or medium-hub airports. The board’s letter of support will be considered when the Transportation Department selects the city’s Essential Air Service provider.

The department pays Southern Airways $2,378,312 a year for 18 weekly roundtrip flights from Hot Springs to Dallas-Fort Worth International Airport, according to a subsidy report. Airport Director Glen Barentine said the Memphis area-based airline has three round-trip flights Monday, Tuesday, Thursday and Friday and two on Saturday, Sunday and Wednesday. Round trip fares range from $78 to $168.

The department selected Southern Airways two years ago despite the city ranking Boutique Air as the best of the six carriers that responded to the request for proposals to serve Hot Springs. The San Francisco carrier proposed six-day-a-week round-trip service to Dallas and Atlanta on the King Air 350 aircraft, a proposal that would have required a $3.98 million subsidy.

Boutique and Southern Airways were the only carriers that responded to the request for proposals the Transportation Department issued in September. Barentine said the selection committee ranked Southern Airways ahead of Boutique based on the former’s performance over the last 20 months. The selection committee includes Barentine and members of the city’s Airport Advisory Committee.

Southern Airways had no cancellations in June, July and August, a time of year Barentine said is difficult for airlines operating in the southern United States to service their routes.

“They’ve been amazing,” he said. “We couldn’t ask for anything better.”

The King Air 350 in Boutique’s proposal two years ago was replaced with the single-prop Pilatus PC-12, a smaller aircraft than the Cessna 208 Caravan that Southern Airways flies. Barentine told the board that the Caravan’s nine-passenger capacity compared to Pilatus’ eight creates a 900-passenger difference over the course of a year. The Pilatus also has more maintenance issues than the Caravan, he told the board.

According to proposals submitted to the Transportation Department, Southern Airways offered four service options for Hot Springs. The board endorsed the one with 12 weekly round-trip flights to Dallas-Fort Worth and six to Memphis International Airport. The option would require a $2,620,658 annual subsidy, according to the proposal, increasing to $2,686,174 in year two of the contract, $2,753,329 in year three and $2,822,162 in year four.

Boutique proposed a twoyear contract for 18 weekly round-trip flights to Dallas, requiring a $2,852,255 subsidy in year one and $2.923,561 in year two.

Southern Airways’ proposal showed the board-endorsed option would cost $3,084,865 a year to service against revenues of $618,451. The subsidy program allows airlines to include a 5-percent profit in their proposals. Southern Airways’ cost and revenue estimates are based on serving 10,787 passengers a year for an average one-way fare of $57.

According to the Transportation Department’s request for proposals, Southern Airways had 5,213 enplanements and deplanements during the 10 months it operated at Memorial Field last year and 4,098 through June of this year. Barentine said that level of usage has not been seen at the airport in 16 years. Mesa Airlines of Phoenix was the city’s Essential Air Service provider at that time and operated a 19-passenger aircraft, he said.

Southern Airways began serving Hot Springs after SeaPort Airlines of Portland, Ore., filed bankruptcy in September 2016. SeaPort had been awarded a $1.63 million subsidy for twice-a-day service to Houston and Memphis from Hot Springs.