TUPELO • The Tupelo Regional Airport Authority on Friday voted to hire an airline consultant to review the two airline service bids it believes has the most promise for the airport.
Volaire Aviation Consulting will be paid $2,000 from the reminder of a marketing grant the airport received earlier.
While five airlines have submitted bids to continue service at the airport after the current contact expires Sept. 30, the airport board has narrowed its focus on two – the current contract holder, Contour Airlines, and SkyWest.
Airport executive director Cliff Nash said the board prefers Contour and SkyWest since they offer jets service, while the other three airlines do not.
Contour is winding down its current 30-month contract signed in 2017 valued at $10.1 million that provides 15 round-trip flights between Tupelo and Nashville weekly on 30-passenger regional jets.
For its next contract, which it hopes will be for four years, Contour is proposing 14 weekly roundtrips between Tupelo and Nashville, with an annual subsidy of $3.887 million. Contour will continue using ERJ135 and 145 30-passenger jets.
SkyWest is offering 14 roundtrip flight between Tupelo and Houston and Chicago, with an annual subsidy of $3.524 million. How the flights will be divided between Houston and Chicago has not been determined. The airline will fly CRJ-200 regional jets with 50 seats.
SkyWest currently provides regional jet service between Meridian and Dallas.
Contour expects more than 26,000 passengers annually, while SkyWest anticipates just over 40,000. Contour is relying on having 60% of its planes filled, while completing 99% of its flights. That matches it current service.
SkyWest derives it numbers by estimating 64% of its seats filled and 97% of its fights completed.
Contour’s average fare is $45, while SkyWest expects an average of $112.56.
Under guidelines of the Essential Air Service program, once revenue and expenses have been calculated, airlines can take a 5% profit. That would allow Contour a profit of $241,285, while SkyWest would see $382,352.
But still up in the air is how will the flying public respond, no matter whichever airline is chosen. With the pandemic still holding back some travelers and many businesses still limited in their operations, airlines have seen a 90% drop in passengers.
Contour was not immune in April, with only 87 passengers. Nash said the numbers are improving this month, but are still lagging. Up until April, Contour had seen double-digit growth nearly every month for a year.
“I don’t see it as much as getting nervous to get on a plane as much as it is what are you going to do when you get to Nashville if so much is still closed,” Nash said of the drop-off in passenger traffic. “Unless you’re getting up there to make another connection and until things get back to normal, we’ll have to wait to see what happens. But it’s not just Tupelo and Nashville, it’s everywhere.”
Nash is concerned that Contour is cutting back one flight per week from its current contract on its new proposal.
“I can understand that we should have plenty of capacity for next year with the coronavirus recovery still taking shape, but still hate losing any capacity,” he said.