Airline CEO 'Shocked' by Vote to Switch Carriers; Board Member Says Move is Needed to Keep Federal Subsidy

The chief executive of the airline serving Johnstown’s airport said on Thursday that he was “shocked and dismayed” by airport officials’ Aug. 5 vote to recommend a switch to a different carrier.

Meanwhile, one of the five board members who voted in favor of that switch said it’s the right move to make sure Johnstown doesn’t lose the federal subsidy that makes commercial air service here viable.

“Up until now, we’ve had a really warm reception due to the fact that we’ve doubled the number of passengers over the previous carrier, so I just did not imagine in a million years that we would not have the support of the airport in building a maintenance base there,” said Shawn Simpson, CEO of San Francisco-based Boutique Air, which has held the Essential Air Service (EAS) contract for John Murtha Johnstown-Cambria County Airport since Nov. 1, 2018.

Simpson said the proposed switch would impact Boutique’s new Johnstown maintenance facility, which opened earlier this year: “Boutique Air already has 20 jobs at the airport – five customer service individuals and 15 personnel working on the maintenance side. We’re actually planning to expand that to at least 30 jobs … but, of course, if we don’t have the contract, it’s going to make it very difficult to do that, to the point where we’re going to need to pull out and put that maintenance base in a location where we actually have operations.”

Boutique’s current contract to serve Johnstown with its fleet of eight-seat turboprop planes expires Oct. 31. It applied to retain the EAS contract, but the airport board voted 5-3 to recommend that the subsidy instead be awarded to Utah-based SkyWest Airlines, which proposed to operate round trips to Chicago O’Hare International Airport and Dulles International Airport using a fleet of 50-passenger twin-jet aircraft. (While the board’s recommendation carries significant weight, the final decision will be made by the U.S. Department of Transportation.)

The board is expected to vote on the issue again at its regular meeting on Tuesday because the first vote was taken at a special meeting before members of the public had the chance to comment, a violation of Pennsylvania’s Sunshine Act.

Rick McQuaide, Michael Parrish, David Kalina, Jonathan Gleason and Timothy McIlwain voted to recommend SkyWest. Voting against the motion were Jack Babich, Melissa Komar and George Arcurio.

McQuaide said on Friday that he voted to recommend SkyWest in order to minimize the chance that Johnstown could lose its eligibility for the EAS program.

EAS is a federal subsidy designed to fund a minimal level of scheduled air service to small communities that would otherwise be unprofitable for airlines to serve. A community must meet several eligibility requirements, including drawing enough passengers that the per-passenger subsidy amount is below $200. If the community can’t meet that threshold, it is at risk of losing its eligibility for the EAS program.

Neither Boutique nor Johnstown’s previous carrier, Southern Airways Express, has been able to get below that $200-per-passenger threshold. Johnstown has been granted several waivers to remain in the program, but McQuaide warned that that’s not a guarantee. Airports in Franklin, Venango County, and in Jamestown, New York, have lost commercial air service in recent years after being dropped from the EAS program.

“That is one of the most important things to our airport – to not lose that service, because that would be devastating,” McQuaide said. “To lose that would be a huge loss to the airport and the community. … There was nothing in the current proposal from Boutique to demonstrate that they could meet the enplanement levels that we need in order to have our per-passenger subsidy be reduced below the $200 mark.”

McQuaide said he believes SkyWest will be able to make good on its promise to get below the $200 mark.

“They’re projecting to meet it, and I believe it,” he said. “There are travel companies that promote group travel, and I’ve gotten emails from some that have said, ‘If you can get a 30- to 35-passenger commuter service, we can start recommending it, but we can’t recommend an eight-seat passenger plane.’ … This is the first time that the Johnstown airport will have jet service on a regular basis. That’s a major milestone. If we can prove that jet service works, I think other airlines will take a look at our airport if we can demonstrate that we can get the ridership using our airport up.”

McQuaide also cited as factors in his vote what he said was the comfort and convenience of SkyWest’s larger jet aircraft, an anticipated increase in brand recognition of United Express-branded flights, a greater number of connections out of SkyWest’s destinations and reduced travel time to destinations west of Chicago. He said SkyWest has committed to hiring 10 people by its first day in Johnstown.

“All of us on the airport authority respect Boutique,” he said. “There’s no issues with this company. They did, in fact, put in a maintenance facility. … We were happy for them to build this maintenance center. A lot of people are questioning our decision to move to SkyWest because of the maintenance facility and jobs, but the jobs at the maintenance facility are limited to the EAS contract, and the EAS contract is only two years at a time.

“The biggest driver of all, though, is the fact that, if we were to decide on keeping Boutique, we feel like we’re putting our whole EAS program in jeopardy because of not being able to meet the flight subsidies,” he added, arguing that the Boutique jobs would also be put in jeopardy if Johnstown lost its EAS eligibility.

Simpson maintained on Thursday that Boutique’s proposal is Johnstown’s best option. He criticized the proposal to fly to Chicago and Dulles instead of Boutique’s current destinations, Baltimore and Pittsburgh, which he said “have proven themselves to be solid destinations for Johnstown,” and questioned the need for 50-passenger jets in Johnstown when even Boutique’s smaller planes “still have plenty of availability.”

Simpson also said that the members of the board’s enplanement committee, which reviewed and discussed the airlines’ proposals in preparation for the vote, were concerned that Boutique didn’t sign a contract committing to buying fuel at the Johnstown airport, but added that the airline would have signed such a contract if it had been asked to do so and that it already buys a significant amount of fuel here.

“I said right there in the meeting that to say we’re not committed to Johnstown is fairly ridiculous,” Simpson said. “We’re already hiring people. We’ve already got 20 employees and we’re planning to hire another 10. If they needed a commitment, I told them right then and there, ‘You have my commitment. This is what we’re doing, and if you want me to put it in writing, I’d be happy to do so.’ ”

Simpson alleged that the enplanement committee didn’t give Boutique a fair chance to argue its case for keeping Johnstown’s EAS contract. He maintained that the Department of Transportation is willing to grant waivers for the $200-per-passenger requirement as long as passenger counts are increasing.

“From the discussions, it sounded like there were quite a few facts that they thought they had right that they didn’t have right,” he said, “and I tried to explain some of these things at the last meeting, but due to a meeting that didn’t quite go as you would expect in terms of allowing people to talk, some of the discussion was shut down. … There hasn’t been an opportunity for the public to comment, and in fact we were never even given the opportunity to give a formal presentation to the full board, either.”

Larry Nulton, vice president of Nulton Aviation Services, said Friday that his company’s priority is keeping jobs at the Johnstown airport. Nulton is the airport’s fixed-base operator, which means it provides on-the-ground services such as fueling, aircraft storage and flight planning.

“We are interested in keeping jobs in the community and building an economic environment at the airport,” Nulton said, “and we have seen an increase in jobs at the airport over the past four years. That’s been our mission. Nulton Aviation Services has been wanting to see growth and development of employment, and with the change in Boutique and SkyWest, there could be a significant decline in the number of employees on the field with the change in airline service.”

Daniel Lose, Boutique’s manager of aircraft maintenance operations in Johnstown, provided The Tribune-Democrat with a copy of an open letter he wrote criticizing the anticipated loss of Boutique jobs.

“The employees working here have signed rental contracts or purchased homes and are spending their earned dollars here in Cambria County,” he wrote in the two-page letter. “The board’s decision to recommend replacement of Boutique Air throws away the valuable opportunity to grow this community, not only currently, but for future generations.

“I am a Johnstown native that left 20 years ago to pursue a career in military and civilian aviation. I returned to Johnstown in March of 2020 to start Boutique Air’s maintenance Facility. I saw this a fantastic opportunity to create something in my hometown that is beneficial to the community and local economy.”

SkyWest and Boutique were two of four airlines seeking the EAS subsidy for Johnstown. Also in the mix were Hyannis, Massachusetts-based Cape Air and Florida-based Southern Airways Express, the latter of which held the subsidy from 2016 to 2018 before losing it to Boutique.

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