JOHN H. COX III

Mayor

CITY COUNCIL

Tommy L. Benson, Ill, Ward 1

Lois Hawkins, Ward 2

Carolyn Weather.;. Ward 3

Betty J. Watkins, Ward 4

Ann Hollowell, Ward 5

Errick D. Simmons, Ward 6

CITY OF GREENVILLE

p. O. Box 897 " 340 Main St " Greenville, Mississippi 38701 0 'lelephone 662-378-1501 c Facsimile: 662-378-0276 " Email: johncox@greenvillems.org

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July 7,2014

Reference DOT-OST-2008-0209

- - .~..•.. "-.;":;. Mr. Michael Mart

,-. -.;

in

United States Department of Transportatio

Office of Aviation Analysis

1200 New Jersey Avenue SE

Room W86-472

Washington D.C. 20590

~i~ . ,'" ~i9 ,j .•'

Dear Mr. Martin,

On Monday June 2

nd

, three airlines submitted proposals to provide essential air service (EAS) at

the Greenville Mid-Delta Regional Airport. The Airport serves Greenville, Mississippi and a large

area of northwest Mississippi as well as southeastern Arkansas and northeast Louisiana. The

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Airport is a vital economic link to the world rr the entire region.

As is noted in today's letter to you from An~ Hollowell, the City's Vice Mayor who is serving as

Mayor during the temporary absence from the City of Mayor John H. Cox III, the City Council

voted this morning to endorse the proposal of SeaPort Airlines to provide EAS at the Greenville

Mid-Delta Airport. This decision was made after City officials had the opportunity to meet with,

or speak with, representatives of each of the carriers.

This letter constitutes the official comments of the City of Greenville regarding the various air

service proposals received.

First, we wish to thank all three carriers for heir interest in our market. We feel this high level of

carrier interest confirms our belief that our 4irport is capable of generating dramatic airline traffic

increases, with the appropriate carrier and service level.

SeaPort's proposal calls for 18 round trip fli ! hts per week to Memphis and requires an annual

subsidy level of $1,483,080. The proposal's subsidy need is between $700,000 and $800,000

lower than any other carrier proposal. While the forecast per passenger subsidy is $198.00, the

forecast load factor is very modest at 45%.

SeaPort is a well-established regional airlin and already has facilities and operations at

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Memphis. We look forward to significant tra IC growth with SeaPort service. We are also

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confident that frequent service to Memphis at this modest subsidy level will generate traffic well

in excess of the 10 enplanement per day requirements and also at subsidy levels well below

$200 per passenger.

We do, again, appreciate the interest in our market by AirChoiceOne and Sun Air International.

We are very impressed with AirChoiceOne's success providing EAS service in other cities. The

carrier offered two Caravan proposals for Greenville, one for 18 round trips per week and one

for 18 per week the first year and 24 per week the second year. We are deeply concerned about

the higher subsidy level required in the carrier's proposals, especially when both carder

proposals forecast subsidy per passenger in excess of $200 in the first year. We understand

that the Department has made clear that, starting with fiscal year 2015, Greenville will be

subject to a strict enforcement of the $200 maximum subsidy per passenger cap. The carrier's

lowest proposed subsidy is $2.3 million annually, which would require Greenville to generate

11,500 passengers per year, including the first year. The proposal calls for 1,840 annual flights,

so 6.25 passengers per flight, or a 69.4% load factor would be required in the first year of a new

market that has been damaged by poor service by the previous carrier. Even in the carrier's

existing successful mature markets, with service into larger hubs than Memphis, the carrier

does not achieve 69.4% annualized load factors even today.

Sun Air International proposed service to Memphis. The carrier's proposal calls for 24 round

trips per week using eight-seat Piper Navajo aircraft. The carrier forecasts a first and second

year load factor of 60%, a total of 11,801 annual passengers and a subsidy need of $2.279

million or $193 per passenger. We are concerned about a forecasted passenger total of 11,801

in the first years of service, the higher subsidy need and thus, again, as with AirChoiceOne, a

potential exists for issues about complying with the $200 subsidy per passenger cap in fiscal

year 2015 and beyond. The highest single month load factor that Sun Air has achieved in any of

its existing EAS markets was 45%, on the Victoria - Houston Intercontinental route.

Accordingly, we have major concerns whether Greenville can achieve a 60% load factor in the

first year with Memphis service. However, the carrier's subsidy need would basically require us

to do so, with no room for error.

This EAS bid process for Greenville is proceeding under the cloud of a 10-enplanement

termination notice about which the Department has advised us. We will address in the

appropriate venue the merits of our market and why we should be granted a waiver from the 10-

enplanement rule and remain eligible for EAS flights. We will simply note here that our Airport

averaged 14,932 annual passengers (20.5 enplanements per day) for the nine years prior to the

arrival of our current air service. We believe that our failure to make 10 enplanements 'per day

during FY 2013 was entirely temporary in nature, and was due only to the poor service Silver

Airways offered in our market. Thus we believe that we will be able to strongly justify a waiver

from the 10 enplanement violation with new SeaPort service to Memphis.

On that note, and looking forward to successful SeaPort service, we do not want to burden that

carrier with having to overcome a subsidy cap deficit left by Silver Airways. The current Silver

Airways service sees subsidy levels per passenger in excess of $500. Thus, we request that the
Department terminate the Silver Airways service at our airport on September 30,2014. This

avoids the Airport and our new carrier having to overcome one or more months of Silver service

in October or November, with each month seeing subsidy levels of $500 per passenger.

We will instead go dormant in terms of air service on October1, 2014 until SeaPort can begin

flights. This action on our part saves the Department subsidy funds and gives our new air

service partner a clean slate from which to grow our traffic levels. We hope the Department can

expedite the termination notice and waiver application process as well as the awarding of a new

EAS contract for Greenville to SeaPort. Ideally we would like Seaport to be able to begin service

on October 1, 2014 but we will understand if that date slips by a few weeks or a month. We

would not want our dormancy to extend more than 45 days.

We again express our thanks to the three airlines that offered service proposals, and we thank

the Department in advance for working with us as we navigate the challenges of preserving and

growing our air service to meet the transportation needs of our region.

Andrew N. Alexander III

City Attorney

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