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Tupelo airport board looks to end SeaPort contract

For several months, the Tupelo Airport Authority has threatened to end the air service contract with SeaPort Airlines due to its poor performance.

Late and canceled flights have plagued the airline, which blames a nationwide shortage of pilots for many of its problems.

Since beginning service last October, SeaPort has seen enplanements – the number of passengers boarding a plane – in Tupelo fall from more than 350 when it started to fewer than 100 last month.

The board meets tonight, and on its agenda is reviewing/approving the “termination of contract with SeaPort Airlines.”

But if the board approves the measure, it will have to submit its request to Washington. And then comes the process of asking for new bids from interested airlines.

In other words, it will take time to get a new air service provider.

The U.S. Department of Transportation, through its Essential Air Service program, provides subsidized air service to more than 100 airports across the country, including Tupelo, Greenville, Laurel/Hattiesburg and Meridian in Mississippi.

The department last year, with the support of the airport board, signed SeaPort to a two-year contract to provide 30 round-trip flights a week – 18 to Nashville and 12 to Memphis – for $2.5 million a year. But the number of flights was sliced recently by SeaPort to 14 total flights a week, at least through September, the airline said.

That was likely the final straw for the airport board, which is looking to end the SeaPort contract as soon as possible.

But the request will have to go through the Transportation Department, said Caitlin Harvey, a spokeswoman for the agency.

“The contract is with DOT and SeaPort” and not with the airport and SeaPort, she said in an email. “But the board can request that the Department end it.

“If the Department receives a formal request to end SeaPort’s contract, the department may issue a request for proposals (RFP) for replacement service, which may or may not be in place before the end of the current contract.”

The contract is set to expire in September 2016.

Meanwhile, as SeaPort has reduced the number of flights in and out of Tupelo, it’s also getting less money from the federal government.

“SeaPort is only paid for flights that it operates, with exceptions for certain weather cancellations,” Harvey said. “So, if SeaPort has reduced the number of flights it operates, then, yes, there would be a reduction in compensation from DOT to SeaPort.”

There also is a danger that because of SeaPort’s reliability problems, it will not meet the subsidy cap of $200 required by a 2012 law. By exceeding that cap – as SeaPort has done through the end of March, averaging more than $300 per passenger – it could lose its contract for that violation.

DOT will evaluate the contracts in each of the EAS cities at the end of the fiscal year, which is Sept. 30, Harvey said.

“After Sept. 30, the Department will enforce the $200 subsidy cap on an annual basis based on data compiled at the end of every fiscal year. Consistent with established procedures, DOT will issue a show-cause order to each EAS community that has been identified as failing to meet the $200 per passenger subsidy requirement.

“Each such community will have a fair and reasonable opportunity to demonstrate compliance with the $200 subsidy cap prior to a final decision by DOT. In addition, any community that is deemed ineligible under the $200 subsidy cap provision may petition the secretary for a waiver. After receiving a community’s petition for a waiver, the secretary may waive the subsidy cap for a limited period of time, on a case-by-case basis, and subject to the availability of funds.”

Harvey said, however, that the DOT will need time to look at the 2015 data to see which communities might be kicked out of the program for failing to meet the $200 cap.

“DOT does not intend to issue any show-cause orders concerning compliance with the $200 subsidy cap until 2016,” she said.

— Dennis Seid, Northeast Mississippi Daily Journal


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