Expect to see a few new and unexpected routes operating over the next 10 weeks. As with the Summer 2020 version of the Payroll Support Program US airlines face certain service obligations to receive funding under the renewed version this winter. And the US Department of Transportation expects far fewer exceptions this time around.
In the Show Cause order issued late on Friday the US DOT outlined the rules for this round of service minimums. While most of the considerations match last summer’s, a couple minor variations present.
Few exemptions expected
While the DOT leaves open the possibility that airlines can request exemptions from service in markets without demand it also expects roughly none of those to come through.
The Department recognizes that, while still considerably below pre-COVID levels, demand for air travel has improved since the Department issued Order 2020-4-2. The Department also recognizes that, during the effective period of Order 2020-4-2, virtually all points continued to receive service at all times that was in excess of the minimum levels required by Order 2020-4-2. Traffic has recovered from being down 96 percent in April 2020 year-over-year to being down 60 percent year-over-year in October 2020. The Department believes the services currently provided by Covered Carriers at most Covered Points will, in the majority of instances, readily satisfy the proposed Service Obligation. The Department expects that compliance with the Service Obligation will be minimally disruptive to Covered Carriers’ operations, while still providing the traveling and shipping public with the essential access to the National Air Transportation System envisioned by the legislation.
Airlines operated far more than was required under the Summer 2020 mandate and demand is higher now. The DOT does not expect maintaining service levels will be an undue burden to the carriers.
But the DOT will also continue to honor the exemptions previously granted, allowing carriers to skip those markets without filing anew for the permission.
If an airline halted service to a particular airport after 30 September 2020 it need not return, barring certain extenuating circumstances. JetBlue will not be required to resume service at Long Beach, for example, even though it operated significant service at the airport during the comparison period the DOT used to generate the requirements.
This requirement has already led to certain inefficient routes operating, such as Frontier‘s flight between Orlando and Jacksonville, Florida. Just 2.5 hours apart on the interstate and not served regularly in more than a decade, that route will operate on Saturdays for a couple weeks despite roughly no demand, allowing Frontier to access the support funding.
If, however, there are no airlines serving an airport the DOT may choose to require the last carrier that left to resume service. But even that is not a certainty. In those scenarios “the government entity operating the airport at the Covered Point may petition the Department for a restoration of service from a Covered Carrier that served the point during the effective period of Order 2020-4-2.” The airport operator must identify “net public benefits that service restoration would provide” as well as alternate airports that could meet the demands and any supply chain disruptions experienced as a result of the cuts. The airline(s) will also have the opportunity to object to any such requests before the DOT rules.
The DOT identified four airports where all service terminated since the expiry of the Summer 2020 PPP mandate:
- Destin, FL
- Morrisville, VT
- Worcester, MA
- Meyers Chuck, AK
“Fixing” the city point problem
Under the prior iteration of the service mandate airlines could choose to serve only one airport in any market represented by a metro airport code (e.g. NYC, WAS). The revised version alters this rule slightly, requiring every airport in a BTS defined metropolitan area to receive service. But the minimum service levels (1/3/5x weekly) are counted at the metro level, not per individual airport. From a practical standpoint this likely impacts Akron, OH (CLE metro area) and Newport News, VA (Norfolk Metro Area) more than the others. The NYC market could also see some additional flights at its many airports as a result.
The DOT declined, however, to adjust its city points to align with the definitions used by passengers and ticketing platforms, despite the bill explicitly requesting that change.
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