Silver Airways Disappointed in U.S. Department of Transportation’s Carrier Selection for Victoria, Texas Essential Air Service

Silver Airways to File Motion for Reconsideration with the U.S. DOT

Following yesterday’s decision by the U.S. Department of Transportation (DOT) selecting a new carrier to provide Essential Air Service (EAS) in Victoria, Texas, Silver Airways will be filing a Motion for Reconsideration with the DOT and petitioning the DOT to stay the current order and re-open bidding.

Silver Airways is challenging the DOT’s determination that service provided by Silver Airways in Victoria would not be more appropriate under federal law and better suits the governmental, business, and leisure needs of this proud Texas community than the selected air carrier operating a nine-seat aircraft. In doing so, the DOT shunned the recommendation of officials in Victoria and Houston. Federal aviation law and DOT policies mandate that the DOT give “substantial weight” to the views of EAS communities. “We are exceedingly disappointed and frankly surprised that the DOT would ignore the strong support and enthusiastic recommendation provided to Silver by political, airport, business, and other community leaders in Victoria and Houston,” said Silver Airways Senior Vice President Kurt Brulisauer. “Silver was undoubtedly the strongest airline in terms of service and product offering and was the carrier of choice of by the City of Victoria, Victoria County, Victoria Regional Airport, City of Houston, and Victoria Economic Development Corporation. It is a very troubling precedent that the DOT did not follow these community recommendations, which all cited Silver’s larger, 46-passenger ATR aircraft, service to Houston’s George Bush Intercontinental Airport (IAH), and Silver’s numerous interline agreements with larger air carriers at IAH as key reasons for supporting Silver’s proposal.”

With its Victoria bid, Silver was the only carrier satisfying all five of the long-established federal statutory considerations of the EAS program. Instead the DOT focused exclusively on one factor, subsidy amount, in spite of the fact that Silver’s proposal is more cost-effective. Federal law requires the DOT to monitor per passenger costs and caps EAS subsidies based on passengers, not on total cash outlay. The subsidy per seat for the selected carrier would be 220 percent higher than Silver’s proposal and the government’s subsidy per projected passenger for Silver would also be lower. In its Motion for Reconsideration, Silver will petition the DOT to re-select Silver as the EAS provider in Victoria, or alternatively, to provide for an expedited re-bidding procedure. “We can offer a restructured proposal to the community with a 34-seat Saab 340B+ twin-engine aircraft that would grow traffic in Victoria and better meet the needs and requirements of business and leisure travelers at lower cost per passenger,” added Brulisauer.

By selecting an aircraft operator operating only nine seats, the DOT is not factoring in one of the hallmark principles of the EAS program – market development and passenger growth – and is potentially endangering Victoria’s prospective eligibility in the EAS program by failing to satisfy minimum passenger guidelines. Silver set records for passenger counts and stimulated the market sharply in its most recent EAS service at Bar Harbor, Maine in 2018, drawing rave reviews from the community with its safe, affordable, and friendly air service and with its superlative operational performance. Silver’s controllable completion factor year-to-date exceeds 99 percent system wide and is 100 percent in EAS markets. This is among the best among regional airlines and also comparable to that of top-tier major airlines. Silver’s introduction of new ATR-600 series aircraft should even further improve the airline’s operational performance and further enhance the customer experience.

Silver is in the midst of a corporate turnaround with a revitalized management team of experienced airline and military leaders, and Silver intends to supplement its scheduled passenger airline service in the Southeastern United States and the Bahamas to become one of the DOT’s top EAS providers by working in partnership with communities and business partners to grow and develop air service in EAS markets. In its bid at Victoria, Silver pledged $50,000 to market its service in the Texas communities and Silver is committed to hiring station personnel from the Victoria community. Unlike most EAS carriers, all of Silver’s flights are operated under Part 121 of the Federal Aviation Regulations, which requires the most stringent safety and training requirements and regulatory oversight, and all Silver flights are operated in twin-engine cabin-class aircraft with highly trained flight crews, a flight attendant, and a full-size lavatory. In addition, Silver participates in all major GDS systems, which provides ease of booking for consumers, facilitates codeshare and interline relationships, and allows consumers to more easily shop and compare alternatives, and to more easily connect to the largest number of mainline codeshare and interline partners among all EAS carriers.