The mayors of Pierre and Watertown, South Dakota, have implored federal aviation officials to step in and engineer quick fixes to the recent poor performances — financially and flyingwise — by California Pacific Airlines, the communities’ newly branded air carrier.
Or let them find another airline.
In a letter dated Dec. 21 and revised Dec. 27, Pierre Mayor Steve Harding and Watertown Mayor Sarah Caron told Joel Szabat, deputy assistant secretary of the U.S. Department of Transportation’s office of aviation and international affairs, that CPA is not paying its bills and is missing a big slice of its flights and is late half the time with the ones that do land.
It appears to bring to an end a rosy two-plus years of scheduled commercial air service from Aerodynamics Inc., (ADI), which was rebranded California Pacific Airlines as of Sept. 1, after CPA, based near San Diego in Carlsbad, California, completed its purchase of the small airline based in Kennesaw, Georgia, near Atlanta.
ADI has been a charter airline for a half-century until it entered the scheduled passenger service line by winning an Essential Air Service contract in early 2016 from the U.S. Department of Transportation to provide subsidized flights from Watertown and Pierre to Denver.
It has had plans to expand, but ADI had been flying only the 12 round trips per week from Watertown-Pierre-Denver, as well as its charter service for teams from the NCAA and NASCAR.
From the first flight on Aug. 15, 2016, until this fall, ADI/CPA pleased city officials in Pierre and Watertown with good service from 50-passenger Embraer jets, city officials said. ADI was credited with reviving moribund air service in each community under Great Lakes Airlines of Cheyenne.
ADI did a great job, Mike Isaacs, manager of the Pierre Regional Airport , would regularly tell city leaders, citing reliable flights that were nearly always on time, better than many major airlines..
Both cities re-upped this past summer as the initial two-year EAS contract wound down, asking DOT to give ADI/CPA another two years of subsidies for air service.
Annual passenger boardings at both Pierre and Watertown were well above 10,000 in 2017, a key accomplishment because it means each airport qualifies for a $1 million federal grant.
This year, passenger numbers have been slightly lower than last year, but still appeared to be heading for more than 10,000 boardings in Watertown and Pierre.
CPA is owned by Ted Vallas, a 97-year-old entrepreneur, who has had a dream for years of reviving air service from the San Diego area to other parts of California, the Southwest and perhaps farther. But Vallas, while owning CPA for eight years, had no aircraft until he bought ADI and its leased fleet of four Embraer jets.
In November, CPA began its first flights out of Carlsbad, while promising to maintain the 12 weekly Watertown-Pierre-Denver round trips.
But a bunged up wing on one aircraft from bumping into a piece of construction equipment at the Pierre airport while taxiing to the runway and other problems have caused problems that past two months, CPA officials have said.
It’s been enough that the two mayors wrote to Szabat this month in Washington lining out the problems they see with California Pacific Airlines.
“Since the acquisition by CPA, the airline has started to be delinquent on a significant number of bills to both public and private entities. Both Pierre and Watertown have notified CPA of being in default on their lease. In both cases, CPA is more than 180 days behind in rent, landing fees and other payments. Both airports are publicly funded entities that rely upon both user fees and support from taxpayers, and CPA not paying its bills has put undue burdens on each community to fund the shortfall to support each airport’s operations. We also understand that CPA is significantly behind on payments to many private companies in our communities, and we have been told that in some cases the vendors are now refusing to do business with CPA without up-front payments for services.”
The mayors said that since Nov. 17, CPA has cancelled 28 flights at Pierre, which amounts to 30 percent of the scheduled departures; and 26 flights to Watertown, which meant 25 percent of the scheduled flights.
“On top of cancellations, on-time performance has significantly declined with only about 50 percent of flights operating on time,” to each airport, the mayors told Szabat.
The problems really began in November when CPA began its first flights in California, the mayors say in their letter, which was posted Dec. 27 on the federal government’s official online bulletin board at www.regulations.gov.
“While we understand many small airlines can experience operational challenges, it has become evident that the new management’s focus on the California flying has directly impacted the service at Pierre and Watertown and has resulted in significant delays and cancellations,” the mayors said.
Earlier this month, Mickey Bowman, CPA’s executive vice president and chief operating officer, told the Capital Journal that a series of coincidences had created problems over the past month or so, including the wing-tip damage at taxiing speed that happened at the Pierre airport, putting one aircraft out of commission for repairs that took about a month.
But Bowman said CPA has lots of reasons to want to provide reliable service to Pierre and Watertown, as in about $7 million in of them: the federal EAS subsidies each year of the two year contract that was re-upped in August. If a flight is cancelled to Pierre or Watertown, CPA does not collect the federal EAS subsidy for that flight, he said.
Bowman also said CPA, had quit flying charter flights -- for the first time in the airline’s half-century history which was built on only charter flights until 2016 — in order to focus on its scheduled passenger service.
The mayors, however, obviously have little patience left.
“While we understand that the U.S. DOT typically gives airlines the benefit of the doubt in terms of poor operations or financial problems, both Pierre and Watertown have worked too hard and spent too much time and money overcoming problems with the last air carrier to wait for 90 or 180 days of poor operations before a solution can be found. We request the U.S. DOT to work with CPA to resolve both its operational and financial issues within the next 30 days, and if the airline cannot perform as a reliable air carrier — at the 97 percent (on-time service rate as stipulated) in their EAS bid -- and meet its financial obligations, that the U.S. DOT reissue a (Request for Proposal and bidding process) so that Pierre and Watertown can find a carrier that can.”
The mayors sent copies of their emailed letter to DOT to U.S. Sen. John Thune, R-S.D., and California Pacific AIrlines.
Underlying the recent problems for CPA is the new reality created in 2013 when federal requirements for commercial airline pilots’ flying experience were upped from 250 hours to 1,500 hours, a move aimed at increasing flight safety.
But it also led to a shortage of pilots, especially for smaller airlines.
Mayor Harding said more than once in 2017 and early 2018 that Pierre is fortunate to even have commercial passenger air service, when many cities don’t have it.
That’s at least in part due to the new pilot regulations which has grounded some airlines.
CPA began acquiring ADI early this year, from Seaport Airlines, based in San Francisco, which went out of business last year.
Great Lakes Airlines of Cheyenne, Wyoming, which had flown to Pierre for decades, lost its business here and in Watertown after civic leaders said they were fed up with unreliable service. Great Lakes officials cited the pilot shortage and stopped flying earlier this year.
CP’s Bowman told the Capital Journal this month that the main problem isn’t a shortage of aircraft, but of pilots to fly them.
Sen. Thune has attempted to add legislation in Congress that would give DOT the authority to grant more exceptions to the pilot training hours requirements, according to Robert Silk, who writes for Travel Weekly.