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Five Airlines Vie To Serve Visalia

Great Lakes Airline Plans to Remove Seats To Meet FAA Rules

July 14,2014
Five airlines have filed preliminary applications to serve Visalia under the Essential Air Service contract as of the deadline Friday. The airlines include the existing contractor Great Lakes Airline who flies daily from Visalia to Los Angeles. The current two year contract expires at the end of September. City airport manager Mario Cifuentez says in August a city council committee will recommend to council which of the five proposals to recommend to the FAA who will have the final say.

Great lakes  2014-07-14 at 12.32.58 PMBesides Wyoming-based Great Lakes the other airlines seeking the route are Portland-based Seaport Airlines who operates an average of 140 daily scheduled flights to 23 cities in 9 states, including operations in Southeast Alaska branded as “Wings of Alaska.” The carrier has submitted proposals to provide Essential Air Service (EAS) at Tupelo and Greenville, Mississippi, and Muscle Shoals, Alabama, and recently applied for authority to begin service between San Diego and San Felipe, Mexico in November 2014.

Seaport competed in the last round with Great Lakes in Visalia but was not favored in part because Visalia sees value in daily connections to LAX as opposed to other hubs. Seaport was proposing to fly 9 seaters compared to Great Lakes 19 seat planes.

Mokulele Airlines who flies in Hawaii but is owned by Arizona-based Transpac Aviation, in business since 2011, has also applied.The company has a number of ESA contracts to several small Hawaii airports.

SF-based Boutique Airlines who flies small airplanes between SF and LA as well as Las Vegas has an application.

Lastly an airline called Wine Country Express is also in the run.

Look for a Visalia recommendation around August 15 says Cifuentez.

Pilot Shortage Prompts Unique Strategy

Visalia had been disappointed that Great Lakes has not stepped up the number of flights to LAX but the carrier like other small airlines has been held back by the lack of qualified pilots available with the proper training after the FFA last year increased the requirements for regional carriers.Under the new rules the federal Dept Of Transportation increased the minimum training hours for co-pilots from 250 to 1500.

Since January 1 2014 ,Great Lakes Airlines has stopped service to 14 small cities in eight states, places like Hays, Kan., and Jamestown, N.D. In its annual filed April 9, the Cheyenne, Wyo.-based airline said they lacked enough pilots to support the service.
The pilot shortage has hurt the company’s bottom line with financial filings of the publicly-traded company suggesting that without new sources of financing it might cease service.
To help it survive Great Lakes has lobbied Congress to push the FAA to allow  relaxed rules to offer ESA service with pilots that can fly 9 passenger planes  under the old rules.With FAA approval Great Lakes has been ripping out half the seats on its 19 passenger planes to qualify under less restrictive rules  rather than park them somewhere.
Visalia airport manager Cifuentez  says Great Lakes application indicates  “they are likely going to be doing the same thing inVisalia.”
Recently, Great Lakes Aviation, Ltd. (OTC Bulletin Board: GLUX.OB, “Great Lakes”), announced today that it has engaged Raymond James as its investment banker to advise the Company with respect to new financing options and strategic alternatives.  As part of its assignment, Raymond James will also assist the Company in evaluating changes to its business and fleet configuration.
On July 8 the company announced its June passenger load was down nearly  61% from June 2013 with Year to Date numbers down 55%. Great Lakes operates at 30 locations in 9 states.

 Low Pay A Problem?

The small airline industry has been criticized for the low pay they offer these pilots – at $20,000 to $25,000 a year – a fraction that pilots on major airlines get. A Governmental Accountability Office (GAO) report recently offered this view. “A large pool of qualified pilots exists” to meet projected demand by regional carriers over roughly the next decade, but they may not be “willing or available to work at wages being offered.”
Cifuentez says the other four applicants seek to connect Visalia with LAX, Burbank or Oakland.
Last time Great Lakes requested an annual subsidy of just under $1.7 million,less than Seaport’s $1.85 million request.

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