Small Airports Brace for Decision on Skywest Charter Plan

Devils Lake Regional Airport is partway through a $14.8 million terminal renovation that will double its size and add a boarding bridge to protect travelers from the harsh North Dakota winter. A forthcoming decision by federal regulators may determine just how many passengers ever set foot in it.

(Bloomberg) — Devils Lake Regional Airport is partway through a $14.8 million terminal renovation that will double its size and add a boarding bridge to protect travelers from the harsh North Dakota winter. A forthcoming decision by federal regulators may determine just how many passengers ever set foot in it.

SkyWest Airlines is the only carrier that currently flies to Devils Lake, and its ambitious plan to keep and expand service in small US cities requires US Transportation Department approval. 

The carrier plans to create a subsidiary — SkyWest Charter — to operate flights under less stringent charter regulatory standards than its parent company. It will use regional jets reconfigured with 30 seats instead of 50 and will operate flights on a public timetable open for anyone to book.

The strategy is an indirect way for the nation’s largest regional airline to deal with a crippling pandemic-induced labor shortage: When flights are classified as charters, federal rules allow carriers to use older or less experienced pilots who would not be eligible for hiring on large jets.

SkyWest’s move has also become a major flash point in the industry, attracting fierce opposition from the Air Line Pilots Association, the Association of Flight Attendants-CWA and other aviation labor groups that claim the plan takes advantage of a loophole in federal regulations and the flights will be unsafe and pose a security risk. 

The Transportation Department declined to comment on its lack of action to date on SkyWest’s request, but it recently signaled in an online posting that it is considering “revisions” to the federal regulations governing certain types of charter operations.

Its decision could have far-reaching impact on other carriers, including the rapidly growing JetSuite Inc., a Dallas-based charter carrier that operates as JSX. 

And it will shape the futures of small airports that aim to welcome these flights, not to mention the businesses and regional economic authorities that consider transit accessibility in their plans for investment and development. At least 16 small airports have lost all air service and more than 61 others — from Kalamazoo, Michigan, to Pocatello, Idaho — have lost more than half of their air service over the past four years, according to the Regional Airline Association trade group.

“It can be a little frustrating for us, because it’s the great unknown,” said Dennis Olson, chairman of the Devils Lake Regional Airport Authority board. “All we can do is hang on.” 

Losing Captains

Devils Lake has a contract with SkyWest Airlines under the federally subsidized Essential Air Service program, which guarantees that some small communities have a minimal number of flights. It expired in June, Olson said, and DOT has extended it monthly since then. The agency is “reviewing the application,” a spokesperson said in an email. 

Parent company SkyWest Inc., which provides regional flights for American Airlines Group Inc., United Airlines Holdings Inc. and Delta Air Lines Inc., asked the Transportation Department in June 2022 for authorization to operate SkyWest Charter, which would ferry passengers from smaller cities to larger airports. It proposed starting service to 25 markets, primarily between Denver and cities including Elko, Nevada; Laramie, Wyoming; and Sioux City, Iowa. It also plans a handful of flights from Houston and Chicago to other small cities.

SkyWest took the step after watching as many as 1,500 of its captains lured away by higher-paying, larger carriers over the last 18 months. Those industry behemoths were in recruitment mode after the pandemic spurred a wave of retirements and career changes that had left them without enough aviators to staff their flight schedules. 

SkyWest has dropped flights to 13 cities since January 2022 because of the pilots shortage, the airline said, with flying picked up by smaller carriers. Long-term service to another 18 cities is still at risk, it said.

“I don’t know of another airline that’s ever applied for commuter authority that’s as qualified as Skywest is,” Chief Executive Officer Russell “Chip” Childs said in an interview. “We hope we come to a solution with DOT sooner than later. We’re determined to get approval.”

Small-City Lifeline

That service is a lifeline not only for residents of smaller cities like those around Devils Lake, but is essential to efforts to attract companies, new development and jobs, according to comments filed with the Transportation Department by mayors, airport officials and companies in support of SkyWest. 

David Ahlem, CEO of Hilmar Cheese Co., said flights are critical to support a $600 million cheese and whey processing plant the company is building in Dodge City, Kansas — a town of about 28,000.  

“We’ve made a substantial investment in Dodge City and Southwest Kansas, and we’re hoping the Department of Transportation will do the same,” Ahlem said in an email. 

The company declined to comment on the project’s fate if Dodge City loses flights. 

Devils Lake is among the many airports using federal funds, some provided as part of the pandemic-era CARES Act, to expand or improve terminals, runways or other facilities, and has to finish using the money by July 2024. Two Kansas airports received federal grants this spring  — $7.3 million for a new terminal at Dodge City Airport and $2.3 million for a new snow removal equipment building at Hays Regional Airport — on the assumption they’d have sufficient flights to justify the cost, wrote Senator Roger Marshall and Representative Tracey Mann, both of Kansas, in a letter to Transportation Secretary Pete Buttigieg in June urging approval of the SkyWest plan. 

“It’s our last hope,” Barrett Ziemer, executive director of the Chisholm-Hibbing Airport Authority in Chisholm, Minnesota, said of the SkyWest plan. “Air transportation is our only form of public transportation in this area. No train service, no bus service.” 

The airline told four cities in the Hibbing area “that they simply will not be able to put in a bid for our routes if they don’t get that charter commuter authority,” Ziemer said. 

Safety Concerns

Aviation labor groups say approval of the plan would allow the carrier to skirt established regulations including required 1,500-hour flying experience for most first officers, rest rules and mandatory retirement at age 65 for pilots, and maintenance of a safety risk management system. They also say it will sidestep Transportation Security Administration screening for passengers. 

“Other carriers will follow suit because this is a way to find a loophole in pilot training and security requirements,” said Jason Ambrosi, president of the Air Line Pilots Association International. “People who live in these small rural destinations need to know the pilots up front are at the same level of qualifications and standards as if they were on a mainline jet.”

SkyWest denies the safety claims, saying it will begin operations with pilots holding captain’s rank in both cockpit seats — it’s hired 100 so far —  and will use aviators that already have 1,500 hours of experience and hold a license to fly for large airlines. Once it begins to hire first officers, those aviators will build experience to be promoted to captain. The company said it will meet all the standards for a traditional passenger carrier and will use standard TSA checkpoints if commuter authority is approved.

The Air Line Pilots Association and American Airlines also raised questions about JSX as part of their opposition to the SkyWest application, claiming it has exploited the same loophole and should be subject to more stringent regulations. The suggestion that JSX is operating through a regulatory loophole “is fraudulent,” and the company meets or exceeds all of the relevant federal requirements, said Ben Kaufman, a JSX spokesperson.

United supports the SkyWest plan as safe and “the only way I know of that we’re going to have any dent on small-city service problems,” Chief Executive Officer Scott Kirby said in a Bloomberg interview. 

–With assistance from Alan Levin.

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