On May 21 Air Midwest filed notice with the U.S. Department of Transportation [DOT] to terminate its subsidized air service between Moab and Vernal and Salt Lake City. A similar notice terminates service between Cedar City and Salt Lake and Las Vegas as well as six other routes in the Southwest.

    "We are losing money in the market," Tom Bacon, vice president of planning for Mesa Air Group, Air Midwest's parent company, said in telephone interviews with The Times. "Moab is part of a broader market where we are trying to grow the business. But it hasn't worked out."

    The May 21 notification states the company will end essential air service on August 19, after the required 90-day notice period expires. But, Mesa is obliged to continue to provide service until the DOT contracts with a new carrier. The bidding process and selection of a new carrier generally takes about 90 days. But if it takes longer, Bacon says, Mesa will continue to serve as long as necessary, or until Mesa's current contract with the DOT expires at the end of May, 2008.

    When asked about the level of service the community might expect during this period Bacon insisted the minimum level of service will be continued. "I believe we are at that level today," he said, "We will try to keep it up."  

    How quickly DOT acts to replace Mesa as its essential air service [EAS] provider to Moab, and what level of service it strives for, are questions that will bring all the issues of subsidized air service back to the table for the Grand County Council.  

    At several meetings earlier this year the council debated asking DOT to re-bid the contract with Mesa to an airline using smaller planes so that the county would not have to bear the cost of expensive firefighting capability at Canyonlands Field that is currently required by the Federal Aviation Administration because Mesa uses 19-passenger aircraft.

    At the May 1 council meeting, council chairman Jim Lewis wondered if the county might be better off choosing to forgo the EAS subsidy and seeking an airline willing to take on the challenge of building its service without federal subsidies.

    The council ultimately decided to table until August its March decision to ask DOT to seek another airline because reports from the airport manager show the number of passengers in Moab rose to 356 during April. compared to 103 passengers in April 2006 and 81 in April 2005, both years that Salmon Air provided service using smaller aircraft.

    While the Moab market has responded, according to Bacon, to Mesa's attempts to build business by adjusting schedules, doing promotions, and price adjustments, it appears that the "broader market" that includes Cedar City and Vernal has not responded similarly.

    According to Cedar City Airport Manager Steve Farmer, enplanements there exceeded 10,000 annually before Mesa took over. Since then enplanements have dropped by 30 or 40 percent because of poor service. Even so, Farmer expressed regret with the termination notice because he said airport officials had hopes negotiations with Mesa could lead to better service.

    Farmer told The Times that Mesa received the contract last year because its bid for the subsidy was just over half as much as asked for by the previous carrier, Sky West. Now, Cedar City's hope is that Sky West will try to come back. Uncertain that any other carrier will even apply, Farmer assumes that bidders will offer less service in order to lower the cost of the subsidy.

    According to Mesa's termination noitice, the EAS subsidy payment to Mesa for its service to Moab is set at $1,298,784 per year; for Vernal it is $562,720; for Cedar City it is $897,535.