Article originally posted to the WVLT-TV(Knoxville) web site on October 6, 2013 http://www.local8now.com/news/state/headlines/Pikeville-to-have-daily-air-service-to-Nashville-230966841.html 

Pikeville to have daily air service to Nashville 

PIKEVILLE, Ky. (AP) — Eastern Kentucky residents will soon have daily passenger air service to Nashville, Tenn., from Pikeville. Appalachian Air will provide round-trip service to Nashville starting March 3 from Pikeville-Pike County Regional Airport. Gov. Steve Beshear and U.S. Rep. Hal Rogers announced the service Wednesday. Beshear said the service will open up one of the Kentucky’s more difficult areas to reach, allowing travelers to connect to Nashville’s air system in less than 1 1/2 hours. Rogers said commercial air service will open up competitive opportunities for the region. Kentucky House Speaker Greg Stumbo said the service will be helpful in bringing more companies to eastern Kentucky. Beshear’s office said the flights will be operated using a British Aerospace BAE Jetstream J32, which was unveiled during a ceremony at the airport Wednesday.

Article originally posted to the WMKY-FM (Morehead State University NPR station) web site on October 6, 2013 http://wmky.org/post/pikeville-nashville-air-service-begin-2014

Pikeville To Nashville Air Service To Begin In 2014

By Joshua Grandison and Dan Conti 

Appalachian Air will provide daily round-trip passenger service from the Pikeville-Pike County Regional Airport to Nashville this spring.  The announcement was made at a press conference in Pikeville on Wednesday (November 6).

Luke Schmidt is President of L.B. Schmidt & Associates, a consulting firm which served as the air service project manager. He says the new service will begin March 3, 2014.

 “We will start with one daily round trip from Pikeville to Nashville. The outbound flight will depart early in the morning, probably around 6:30. It’s a little over an hour and fifteen minute flying time to Nashville and then once everybody gets there, they will have the opportunity to connect to any of the nine airlines that currently serve Nashville and fly on to fifty different non-stop destinations.” –Luke Schmidt

Schmidt says those destinations include cities throughout the United States, Canada and Mexico.

Kentucky House Speaker Greg Stumbo says he hopes the new service will help lure more companies to the Mountain Region.

Article originally posted to the WSAZ-TV (Huntington/Charleston) web site on October 6, 2013 http://www.wsaz.com/home/headlines/Offical_Update_Proposed_Pike_county_Air_Service_127518158.html

(Click on the link above to see video news report)

UPDATE 11/6/13 @ 3:30 p.m.
PIKEVILLE, Ky. (WSAZ) — Scheduled commercial air service is now a reality in Pike County, Ky.

A ceremony formally announcing the air service was held Wednesday afternoon at the airport.

Beginning on March 3, 2014, Appalachian Air will provide one daily roundtrip flight between Pikeville-Pike County Regional Airport (PBX) and Nashville International Airport (BNA).

Upon arrival at BNA, passengers will be able to connect to any of the nine airlines which currently serve BNA with nonstop service to 50 major destinations throughout the United States, Canada and Mexico, according to a news release from Gov. Steve Beshear.

The aircraft which will be used for the flights, a Jetstream J32, was also unveiled at the airport ceremony.

Donovan Blackburn, Pikeville City Manager, believes the air service will serve as a catalyst for continued growth in Pike County and Pikeville.

“The development of passenger air service has been a long held goal of the Pikeville community,” said Blackburn. “In fact, one can go back as far as 1968 to see when this issue was first discussed.”

“Scheduled passenger air service will open new opportunities for much of Eastern Kentucky,” said Gov. Beshear. “What has historically been one of the more difficult regions of the Commonwealth to reach will now be less than an hour and a half flying time from connecting to the global air system in Nashville.”

“As we face a new era in eastern Kentucky and work to expand our industrial portfolio, this commercial air service launches us into the competitive market,” said Congressman Hal Rogers. “With new economic challenges ahead, we have to access greater opportunities, embrace new technology and create innovative strategies to shape our future, and this air service will provide unprecedented access to this important energy producing region.”

“Today’s announcement marks a major step forward for our region, and I am confident that this dedicated service will be widely used,” said House Speaker Greg Stumbo. “This will go a long way in helping us lure more companies to the mountains.”

Passengers boarding flights in Pikeville will undergo security screening and upon arrival in Nashville will deplane at a gate in the main terminal in a sterile area. Passengers will not have to go through any additional security screening in Nashville.

                                                                                                

Commonwealth of Kentucky

Office of the Governor

FOR IMMEDIATE RELEASE

Contact:

Kerri Richardson

Governor’s Office

502.564.2611

Danielle Smoot

Congressman Roger’s Office

606.679.8346

Luke B. Schmidt

L.B. Schmidt & Associates, LLC

502.292.2898

Donovan Blackburn

City of Pikeville

606.205.9800

New Passenger Air Service Lands in Pikeville

New Service Will Serve as a Catalyst for Growth in Eastern Kentucky  

PIKEVILLE, Ky. (Nov. 6, 2013) – Governor Steve Beshear and Congressman Harold “Hal” Rogers announced today that Appalachian Air will provide daily roundtrip service to Nashville this spring.  The leaders joined the local work group leading the development of scheduled passenger air service in Eastern Kentucky at the announcement at the Pikeville – Pike County Regional Airport (PBX). 

The aircraft which will be used – a sleek, high performance British Aerospace BAE Jetstream J32 was also unveiled at the airport ceremony. 

Beginning on March 3, 2014, Appalachian Air will provide one daily roundtrip (Monday – Sunday) between PBX and Nashville International Airport (BNA).  Upon arrival at BNA, passengers will be able to connect to any of the nine airlines which currently serve BNA with nonstop service to 50 major destinations throughout the United States, Canada and Mexico. 

“Scheduled passenger air service will open new opportunities for much of Eastern Kentucky,” said Gov. Beshear.  “What has historically been one of the more difficult regions of the Commonwealth to reach will now be less than an hour and a half flying time from connecting to the global air system in Nashville. 

“As we face a new era in eastern Kentucky and work to expand our industrial portfolio, this commercial air service launches us into the competitive market,” said Congressman Hal Rogers. “With new economic challenges ahead, we have to access greater opportunities, embrace new technology and create innovative strategies to shape our future, and this air service will provide unprecedented access to this important energy producing region.” 

“Today’s announcement marks a major step forward for our region, and I am confident that this dedicated service will be widely used,” said House Speaker Greg Stumbo.  “This will go a long way in helping us lure more companies to the mountains.” 

The new flights will be operated as regularly scheduled public charter flights by two companies: Corporate Flight Management of Smyrna, TN, which will operate as the Direct Carrier and Public Charters, Inc. of Avoca, PA, which will operate as the Indirect Carrier.  A public charter flight is a form of commercial air travel where departure and arrival times, origin and destination airports and fares are advertised to the general public in accordance with a prospectus that the companies will file and which is approved by the United States Department of Transportation Special Authorities Division.  The prospectus essentially serves as a contract which binds the two companies to provide the service as promoted, and the service also provides unique consumer protections to passengers. 

Passengers boarding flights in Pikeville will undergo security screening and upon arrival in Nashville will deplane at a gate in the main terminal in a sterile area.  Passengers will not have to go through any additional security screening in Nashville. 

(Additional information concerning this new service accompanies this press release) 

Corporate Flight Management, the world’s largest operator of the BAE Jetstream J32 aircraft, will be responsible for all aspects of this new service related to flying, including providing the aircraft, the flight crew and aircraft maintenance.  Public Charters will be responsible for all non-flying aspects of the service, including ground handling of passengers and baggage, ticketing and ticket sales.  Through its contracts and distribution rights, Public Charters will sell tickets for passengers traveling to or from PBX on all of the leading online ticket sales platforms, such as Travelocity (ticket sales will also be available through telephone sales). 

“The development of passenger air service has been a long held goal of the Pikeville community,” said Donovan Blackburn, Pikeville City Manager.  “In fact, one can go back as far as 1968 to see when this issue was first discussed.  The new service to be provided by Appalachian Air will build on many exciting things which are underway in Pikeville, including the expansion of both the University of Pikeville, the Pikeville Medical Center and the new Pikeville Commons development and will serve as a catalyst for continued growth,” Blackburn continued. 

“This new service, while supporting the existing coal industry, will help the region to begin diversifying beyond coal,” said Luke B. Schmidt, President of L.B. Schmidt & Associates, LLC, the Louisville-based consulting firm which served as the air service project manager.  “Companies interested in investing in this region will now find it easy to reach and this service will assist in creating new jobs. This project has been a team effort from the very beginning, and I want to congratulate my clients and colleagues for their efforts to bring Appalachian Air to Eastern Kentucky, including Donovan Blackburn, Pikeville City Manager, Bill Hickman, Pikeville – Pike County Airport Board Chairman, and, Jared Arnett, President & CEO of the Southeast Kentucky Chamber of Commerce,” said Schmidt. 

The City of Pikeville is a Fourth Class City and is the county seat of Pike County, the largest geographical county in Kentucky.  Pikeville is the regional center for education, employment, health care, manufacturing, mining, tourism and transportation in a region comprised of nine Kentucky counties, three Virginia counties and one West Virginia county with a combined population of 345,000 people.  The Pikeville – Pike County Airport Board owns and operates the city/county airport.  The Southeast Kentucky Chamber of Commerce represents 500 members in eight Kentucky counties and has established a support network for businesses in Southeast Kentucky that are committed to improving the local economy, regional unity, political advocacy and economic development.  These three entities by working together are leading efforts to establish scheduled commercial airline service in Eastern Kentucky.  L.B. Schmidt & Associates, LLC is a full-service management consulting company based in Louisville, Kentucky and provides consulting services to this group in the area of developing and facilitating passenger air service.

 

 

Article originally posted to the (Somerset) Commonwealth Journal web site on October 6, 2013 http://somerset-kentucky.com/local/x1836129420/Subsidy-needed-to-launch-commuter-air-service

by Bill Mardis The Commonwealth Journal Sun Oct 06, 2013, 12:37 AM EDT

Somerset —

“If we can raise the money we have the service.”

The current status of commuter airline service in and out of Lake Cumberland Regional Airport was so verbalized by Martin Shearer, executive director, Somerset-Pulaski County Development Foundation, and Luke B. Schmidt, consultant for the airport project.

The development foundation has in hand a written proposal for airline service submitted by two companies: Public Charters Inc., of Avoca, Pennsylvania, and Corporate Flight Management of Smyrna, Tennessee. The two companies propose to operate daily (including weekends) nonstop round-trip flights between the Somerset airport and Nashville International Airport.

The aircraft would be a 19-passenger British Aerospace BAE Jetstream J31turboprop. The Jetstream J31 is a state-of-the-art, high performance pressurized aircraft with stand-up cabin, lavatory and two pilots. It cruises at 265 mph with a service ceiling of 25,000 feet, above most weather. The Jetstream can easily take off and land on the 5,800-foot runway at the Somerset airport, Schmidt noted.

The flight to Nashville is about 45 minutes. It would connect to flights in Nashville operated by nine airlines, including low-cost Southwest Airlines. The are 49 nonstop destinations out of the Nashville airport.

Martin and Schmidt emphasized the “critical juncture” in what they describe as “ … a very, very valid proposal” is “right now we don’t have the money.” All airlines, opening a new hub, lose money for a time after start-up. Schmidt estimates it would take a year for a local commuter service to become profitable and the local airport, the community or somebody would have to cover the losses.

Shearer said the development foundation has applied for a $1 million grant from Small Community Air Service Development, an agency of the U.S. Department of Transportation. If the money becomes available, a contract for a minimum revenue guarantee would be made with the carrier to make up losses established by audit,” Schmidt said. “We would only make up verified losses in revenue,” Shearer emphasized.

Emphasizing the companies’ sterling reputations in the airline industry, Shearer and Schmidt reiterated: “If we can raise the money, we have the service.”  They said the two companies making the joint proposal really believe a commuter service out of Lake Cumberland Regional Airport can be profitable.

A recently completed regional survey of airline travelers indicates a robust market in this Southern Kentucky area for a commuter airline service at Lake Cumberland Regional Airport.

Released by the development foundation, the survey indicates a potential annual enplanement of 142,166 passengers who would use airline service in and out of the Somerset airport. “This is not just Pulaski County … this is the region,” Schmidt said. He called airline service a tremendous trigger for economic development.

Shearer and Schmidt said attractiveness of commuter service in Somerset would be convenient location, time saved and free parking.

“We could be ready to go in four or five months after a source of funds is identified,” Shearer said. Public Charters would be responsible for ticket distribution, passenger check-in, boarding, baggage, cargo handling and all other ground functions. Corporate Flight Management, serving as the direct carrier, would be solely responsible for flying, aircraft, aircraft maintenance and flight crews.

Screening of passengers would be done at Lake Cumberland Regional Airport’s state-of-the-art terminal, making it quick and easy to board flights out of Nashville.

Schmidt said the two carriers making the proposal for commuter service in and out of Somerset assure a rigid flight schedule to and from Nashville. Only interruptions would be weather or mechanical problems.

“We’ve worked for three years to bring this project to fruition and we believe this is just the type of service we need in order to re-launch passenger air service successfully in this market,” Shearer said. “While we still have some hurdles to overcome, we are pleased to be at this particular point,” he added.

A Florida-based commuter airline operated out of Lake Cumberland Regional Airport, first to Nashville and then to Washington, D.C., for a little more than two years. It was subsidized with about $900,000 obtained by Congressman Hal Rogers from the U.S. Department of Transportation and $100,000 in local matching funds. No sustaining local source of funding developed before the federal funds were exhausted and the airline shut down February 19, 2010.

FOR IMMEDIATE RELEASE

 

Pikeville Air Service Project Partners Issue Response

Pike County Fiscal Court Resolution is Misleading,

Misinterprets and Misrepresents Many Key Issues

Pikeville, Kentucky (September 4, 2013) – The group leading the development of commercial air service in Eastern Kentucky today responded to the Resolution passed by the Pike County Fiscal Court on September 3, 2013.

The Resolution calls into question why Pike County Government didn’t have more involvement with the two contracts which were recently signed and which will lead to Eastern Kentucky’s first-ever commercial air service, beginning in March 2014.  The Resolution also questions the City of Pikeville’s role in the project and the fact that the City is one of two parties in the recently concluded Air Service Agreement.

“The development of commercial air service in Pikeville has been a long-held community goal,” said Donovan Blackburn, Pikeville City Manager.  “There have been numerous studies and plans that confirm the need for the development of such a service.  Three years ago, representatives from four groups met and agreed to begin a renewed effort to recruit commercial air service to the Pikeville – Pike County Regional Airport.  The four groups included the City of Pikeville, Pike County Fiscal Court (specifically Judge/Executive Wayne T. Rutherford), the Pikeville – Pike County Airport Board and the Pikeville – Pike County Chamber of Commerce (now the Southeast Kentucky Chamber of Commerce).

“It was agreed that our group would retain the services of Louisville-based consulting firm L.B. Schmidt & Associates, LLC and its president, Luke B. Schmidt,” Blackburn continued.  “However, when it came time to finalize the arrangement, Judge Rutherford elected to withdraw, stating he did not have the support of Fiscal Court.  While we respected Judge Rutherford’s decision, the remaining three partners agreed to support the recruitment effort, which led us to the recently announced service to Nashville with Public Charters and Corporate Flight Management recognizing the benefits that this service will bring to the region.”

The new service will operate under strict USDOT rules which will ensure safe and reliable service.  Daily roundtrips between Pikeville and Nashville are slated to begin in March.  Flights from Pikeville will connect to flights operated by all nine airlines currently serving Nashville to 49 nonstop destinations in the U.S., Canada and Mexico, including flights operated by low-fare carrier Southwest Airlines, which has a major presence in Nashville.  Two companies are involved in providing the new Pikeville service.

Public Charters, Inc., of Avoca, Pennsylvania, will serve as the Indirect Carrier (operating under USDOT rules).  As such, Public Charters will be responsible for all non-flying aspects of the program, including, ticket sales, ground handling of aircraft in both Pikeville and Nashville, baggage handling, etc.  This will include a dedicated gate and ticket counter space at both airports as well.

Corporate Flight Management, of Smyrna, Tennessee, will serve as the Direct Carrier (again, operating under USDOT rules).  Corporate Flight Management will be responsible for all flying aspects of the program, including providing the aircraft (which it owns), providing the flight crew and all aircraft maintenance.

In essence, Public Charters serves as the contractor for this project and Corporate Flight Management serves as the subcontractor.  The role of Public Charters cannot be overstated.  The company has contractual arrangements with some 15 online ticketing platforms (such as Travelocity) which will soon list the Pikeville – Nashville flights.  Having access to these platforms for the purpose of selling tickets is vital to the success of this program.

More importantly, Public Charters and Corporate Flight Management each have significant experience in providing commercial air service to smaller communities.  Both companies teamed up to provide the first-ever Alternative Essential Air Service flights between Manistee, Michigan and Chicago’s Midway Airport.  This service has been in operation for almost nine months and during this time, only one flight has been cancelled.  In fact, Corporate Flight Management has a 99% dispatch reliability factor, almost unheard of in the industry.

In order to support the new service, as it builds to a sustainable/profitable level, a revenue guarantee fund needed to be established.  This is standard practice when it comes to community development of new air service markets in communities both large and small. In order to fund the revenue guarantee, the City of Pikeville successfully applied for a USDOT Small Community Air Service Development grant in 2011.  The City was awarded $750,000 ($100,000 of which will be used to develop a marketing/promotion campaign for the new service).

Last year, the City applied for a multi-county coal severance tax grant in the amount of $1 million from the Commonwealth of Kentucky.  Grants made from the coal severance tax fund are specifically earmarked for economic development projects in Kentucky’s coalfield counties.  As such, applying for the grant for the purpose of funding the revenue guarantee was appropriate, given the fact that commercial air service serves as a catalyst for economic development and it will assist in creating new jobs – primarily in Pike County.

By law, in order to apply for the multi-county coal severance tax grant, simple resolutions of support are required from the project’s home county (in this case, Pike County) and one additional county.  In this particular instance, all that was requested of Pike County Fiscal Court and Floyd County Fiscal Court was the simple passage of the resolution of support (not one dollar of county money was requested).

Floyd County Fiscal Court, after ten minutes of review and deliberation passed the requested resolution of support recognizing the benefits that this service will bring to the region.  It took Pike County Fiscal Court nearly four months to consider and finally pass the resolution.  Finally, following a community forum on the issue hosted by the Appalachian News-Express, which indicated widespread support for the project, five members of Fiscal Court voted to approve the resolution.  Governor Steve Beshear announced the award of the $1 million grant in November 2012.

(Since the governor’s announcement, the state grant has been reduced to $670,588, due entirely to the War on Coal, various EPA regulations which have resulted in a reduction in coal mining and receipts to the state’s multi-county coal severance tax fund.  Recognizing the importance of this project to the future of Eastern Kentucky, Governor Steve Beshear directed his Finance Cabinet to find the funds to support this project.  As a result of the governor’s leadership on this issue, $200,000 will be directed to the project through the Department of Local Government, with the remaining $470,588 coming from the Transportation Cabinet’s Division of Aviation.  None of these funds will come from the multi-county coal severance tax account.  Both grants will go to the City of Pikeville as originally planned and the City will serve as the administrator of these grants.)

(It should also be noted that this project enjoys widespread support among Kentucky’s leaders, including: Governor Steve Beshear, Congressman Hal Rogers, Senator Mitch McConnell, Senator Rand Paul, the entire regional state legislative delegation, Cabinet for Economic Development Secretary Larry Hayes, Department for Local Government Commissioner Tony Wilder, etc.)

The Pike County Fiscal Court Resolution passed on September 3^rd calls several issues into question, including:

• The legality of the City’s role of party to the Agreement for Air Services with Public Charters

Since the City applied for both revenue guarantee fund grants, and serves as the sole administrator for both grants, it is entirely appropriate for the City to enter into agreement with Public Charters on this matter.  The County Judge/Executive opted out of this project three years ago, as such, why would he have been consulted on this project? How can the County Judge/Executive justify taking a leadership role in this project?

• The legal right of the Pikeville – Pike County Airport Board to enter into a contract with Public Charters (Airport Use Agreement)

As provided for in Kentucky Revised Statutes (KRS) Section 183 (and various subsections), the airport board operates the airport on behalf of the community.  Joint action taken by the City and the County creating the joint board occurred on October 7, 1985, thus granting the board all of the authority and power as authorized by various sections of the KRS Section 183.  Appointments to the board are made by both the City of Pikeville and Pike County Fiscal Court.  The board has the legal right to enter into contracts with various vendors, suppliers, etc. as a customary part of its daily business pursuant to Kentucky law.  This is true of airport boards across the Commonwealth.

(Copies of KRS 183.133, KRS 183.137 and, KRS 183.140 which address the duties and responsibilities of airport boards in Kentucky, the right of airport boards to enter into contracts, and, the establishment of air carrier services accompany this release)

The concern stated within the county’s Resolution regarding ownership of the property where the airport is located is not relevant to this issue.  The contract is not speaking in reference to the title of land but rather the Airport Board as a “joint creation” through the 1985 City/County joint action and adoption referenced above.  As the result of this action, pursuant to KRS Section 183 the Airport Board has been given the authority to oversee and operate every aspect of the airport including the development of commercial air service.

In this case, the airport board is chaired by an attorney who is knowledgeable as to what the law allows in terms of entering into contracts.  As an additional precaution, the airport board is also advised by outside counsel, who did in fact review the Airport Use Agreement as it went through several revised drafts.  This contract went through a careful and thoughtful process and was not entered into lightly.  The board chairman also E-Mailed several drafts of the proposed contract to all board members as they were revised.  Each board member was given ample opportunity to comment on the drafts as the process moved forward.

• The lack of a contract between the City of Pikeville and Corporate Flight Management (the actual operator of the flights)

As previously noted, Public Charters serves as the contractor for this project, with Corporate Flight Management serving as the subcontractor.  It is entirely appropriate for the City to enter into contract with Public Charters for this purpose.

• The lack of a license for Public Charters to “do business in the Commonwealth of Kentucky”  

As this project moves forward through the implementation phase to the first flight in March 2014, significant paperwork will be filed with the USDOT to launch this service.  The public can rest assured that whatever licenses are required will be obtained by all of the parties involved.  Since this is Public Charters’ first venture in Kentucky it is only reasonable to understand as to why they are not yet licensed.

• The City’s right to enter into the Air Service Agreement 

By citing what can best be called “legalese” concerning the City’s sovereignty, government immunity, etc., this particular paragraph is confusing at best and totally ignores the fact that cities and towns across Kentucky enter into contracts every day.

The County does enjoy some sovereign immunity that Cities do not enjoy; however, even Counties do not enjoy total immunity from lawsuits. Their individual employees are still subject to liability claims which require the County to carry insurance just like the City.  This is why the county purchases insurance from KACO.  This is why the city also carries insurance and contractually requires Public Charters to carry a $25,000,000 policy as well, naming the City as an additional insured on its policy.

It is important to note that both contracts – the Agreement for Air Services and the Airport Use Agreement – provide the usual and customary protections and indemnifications for all parties.

“It is disappointing that when the community should be celebrating this achievement – the recruitment of commercial air service to Pikeville and Pike County – that Judge Rutherford has reprised his role to continue to question the work of many community leaders who only wish to move the region forward,” said Luke B. Schmidt, President, L.B. Schmidt & Associates, LLC, and project consultant.  “I like and respect Judge Rutherford; however, the fact remains that action taken by Fiscal Court lead by Judge Rutherford will continues to undermine the progress and implementation of commercial air service to the people of Pike County,” said Schmidt.

“The War on Coal makes it imperative that all of us work together to do everything in our power to create new jobs,” continued Schmidt.  “The City, the airport board and the Chamber are to be commended for providing the necessary leadership to see this project through.  I have no doubt that this new air service will assist in creating new, non-coal dependent jobs in Pike County while still supporting the existing coal industry,” said Schmidt.

“The Pikeville City Commission will continue to work hard and fight to derail any attempts to stifle our plan to improve the quality of life for those we are elected to serve and represent.  As the 13-county region’s center for education, employment, health care, retail shopping and transportation, citizens look to the City to create resources such as commercial air service that will enable us to grow while improving our ability to market our resources and our workforce,” said Mayor Pro Tem Jimmy Carter.

 

The City of Pikeville is a Fourth Class City and is the county seat of Pike County, the largest geographical county in Kentucky.  Pikeville is the regional center for education, employment, health care, manufacturing, mining and tourism in a region comprised of nine Kentucky counties, three Virginia counties and one West Virginia county with a regional population of 345,000 people.  The Pikeville – Pike County Airport Board owns and operates the city/county airport.  The Southeast Kentucky Chamber of Commerce represents 500 members in eight Kentucky counties and has established a support network for businesses in Southeast Kentucky that are committed to improving the local economy, regional unity, political advocacy and economic development.  These three entities by working together are leading efforts to establish scheduled commercial airline service in Eastern Kentucky.  L.B. Schmidt & Associates, LLC is a full-service management consulting company based in Louisville, Kentucky and provides consulting services to this group in the area of facilitating airline service.

###

Article originally posted to Appalachian Express-News Web site http://news-expressky.com/news/article_cb713d46-1676-11e3-b400-001a4bcf887a.html

    By Russ Cassady Editor | Posted: Friday, September 6, 2013 5:00 am        

The involvement of the Pike County Fiscal Court in a proposed project to bring daily air service to Pike County has, thus far, been limited to its approval of joining other counties in applying for funding.

However, on Tuesday, just days after the City of Pikeville and Pikeville-Pike County Airport Board approved contracts with Public Charters Inc., to begin a daily round-trip flight between Pikeville and Nashville in March, the Pike Fiscal Court approved a resolution expressing concerns about the project.

   

Article originally posted on August 30, 2013 to WYMT-TV Web site http://www.wkyt.com/wymt/home/headlines/Commercial-air-service-landing-in-Pikeville–221852021.html

PIKEVILLE, Ky. (WYMT)   It is a day city officials in Pikeville say they have waited years for. A new program approved by the Federal Aviation Administration is in place that will bring commercial air service to the region.

A specially called joint meeting between the Pikeville City Commission and the Pike County Regional Airport board was held on Friday. The meeting was called to review and vote on two contracts that will bring commercial air service to the airport.

For years plans of bringing the service to Eastern Kentucky have been discussed and that is why Pikeville officials say Friday’s meeting was monumental for the region.

Project Consultant Luke Schmidt says, “We have reached a critical milestone in this project and were able to present a contract for use of the airport as well as a contract for air service.”

Both contracts passed, and the plan is to begin daily roundtrip service to Nashville International Airport beginning in March 2014.

“This is not only providing service but also opening ourselves up to the rest of the world for trade and working on a way to diversify our economy,” explains Pikeville City Manager Donovan Blackburn. “With the war on coal, we are losing jobs. We have to find a way to open ourselves up and make the area more enticing.”

Officials say none of this would have been possible without the help of Congressman Hal Rogers and support from the community which allowed them to receive a $750,000 federal grant.

Blackburn says, “Over 200 businesses worked with the chamber to write letters, the power of business…asking for the service, writing about what it would mean to their businesses. We had more letters submitted for that federal grant than any other community in the entire nation.”

Officials say it is a risk, “Will it work? We don’t know, but if we don’t try it shame on us because our community deserves quality healthcare, a quality education, an expo center for good entertainment, and quality services such as commercial air,” says Blackburn.

However, it is a risk officials say they are willing to take to help improve the region.

Officials are planning an formal ceremony for October 17th. The aircraft and its local brand name will be unveiled at that ceremony.

The flight will be operated by Public Charters.

 

Press Release

EMBARGOED FOR RELEASE UNTIL SATURDAY, AUGUST 31, 2013

Pikeville – Pike County Airport Board, City of Pikeville Sign Agreements to Facilitate New Air Service

Agreements are the First of Several Steps to Bring Passenger Air Service to the Central Appalachian Region

Pikeville, Kentucky (August 31, 2013) – The group leading the development of commercial air service in Eastern Kentucky today announced that the Pikeville – Pike County Airport Board and the City of Pikeville have each signed agreements with Public Charters, Inc. (PC) of Avoca, Pennsylvania.  PC will facilitate the development of new air service at the Pikeville – Pike County Regional Airport (PBX), which will be operated under contract by Corporate Flight Management (CFM) of Smyrna, Tennessee.  The first agreement outlines various airport services, such as fueling, deicing, aircraft ground handling, terminal space, etc., that the airport will provide to PC and the fees that the airport board will charge for such services.

“The airport board is pleased to take this first and historic formal step towards the establishment of passenger air service in Eastern Kentucky,” said Bill Hickman, Chairperson of the Pikeville – Pike County Airport Board.  “This new service will link the region directly to the domestic and global air service systems and will provide a seamless and easy to use service for all of our region’s air travelers.  This new service looks to the future of the region and will help to create new jobs,” Hickman continued.

The second agreement outlines how the City of Pikeville will manage its revenue guarantee fund to support the start-up of new air service at PBX.

These two agreements are the first of what is expected to be a series of three agreements to be developed between PC and the airport board, the City of Pikeville and the Southeast Kentucky Chamber of Commerce.

In 2011, the City of Pikeville was awarded a $750,000 USDOT Small Community Air Service Development grant for the purpose of funding the City’s revenue guarantee to the first company to commit to providing service.  This grant was augmented with a multi-county coal severance tax grant of $1 million, which was announced last year by Kentucky Governor Steve Beshear.

(Since the governor’s announcement, the state grant has been reduced to $670,588, due entirely to the reduction in coal mining and receipts to the state’s multi-county coal severance tax fund)

“Each of the project partners has approached this project very carefully in terms of recruiting a provider to the community that will best meet our needs,” said Donovan Blackburn, Pikeville City Manager.  “By working together, Corporate Flight Management and Public Charters will bring new air service to Pikeville which will become an important tool in our toolbox when it comes to creating new jobs throughout the region,” said Blackburn.

The third agreement, expected to be signed at a later date this Fall, will be between PC and the Southeast Kentucky Chamber of Commerce.  This agreement will cover marketing and promotion of the new service.  “The Chamber looks forward to playing an active role in helping to develop and promote the new service throughout the region,” said Jared Arnett, President/CEO of the Southeast Kentucky Chamber.

The new service, which is expected to begin in March 2014, will feature nonstop turboprop flights operated by CFM under contract to PC from PBX to the Nashville International Airport (BNA).  PC will provide all ticket distribution, ticket counter, and check-in services, as well as coordination of ground handling and fueling services in both Pikeville and Nashville.  PC will also develop sales platforms for tickets for the new flights on virtually every Internet travel site, such as Travelocity, etc., (tickets will also be available for sale via PC’s web site and over the telephone).  CFM will conduct all flight operations using their BAE Jetstream 19-passenger turboprop airliners.

“The new flights to Nashville will be timed to allow Pikeville travelers to connect to nonstop connecting flights to 49 destinations throughout the U.S., Canada and Mexico,” said Luke B. Schmidt, President of L.B. Schmidt & Associates, LLC and project consultant.

“Travelers will be able to connect to any of the nine airlines which serve BNA, including low-cost carrier Southwest Airlines which has a major presence in Nashville,” Schmidt continued.  “Fully 23 of the Top 25 business destinations for Pikeville travelers will be only one stop away by connecting in Nashville.  This new service will eliminate the need to drive to Lexington, Charleston and Huntington/Ashland when it comes time to travel,” said Schmidt.

Public Charters, Inc. has been offering charter flights by partnering with numerous air carriers since 1999.  PC focuses on markets that are underserved by major airs’ scheduled services.  The company partners with companies such as CFM to provide regularly scheduled public charter flights and provides support in the area of ticket sales and ground handling.  PC’s services are offered on a fleet of aircraft ranging from turboprops to Boeing 737s.

Corporate Flight Management is the largest operator of BAE Jetstream J31/J32 and J41 turboprop aircraft in the U.S.  The company has provided unique scheduled passenger air service from Austin and Nashville to the new regional airport in Branson, Missouri.  The company holds the coveted ARGUS Platinum safety rating and operates a substantial aircraft maintenance and overhaul facility in Smyrna.  The company also manages a fleet of privately owned aircraft, ranging from piston twin engine aircraft to light and medium jets, operating from five bases in the Eastern United States, and holds numerous charter contracts with the State of Tennessee, the U.S. federal government and several collegiate sports teams.

A formal community announcement with more details on the new service is scheduled for October 17, 2013 at the Pikeville – PikeCountyRegionalAirport.  Schedules and ticket prices will also be announced at a later date.

 

The City of Pikeville is a Fourth Class City and is the county seat of Pike County, the largest geographical county in Kentucky.  Pikeville is the regional center for education, employment, health care, manufacturing, mining and tourism in a region comprised of nine Kentucky counties, three Virginia counties and one West Virginia county with a regional population of 345,000 people.  The Pikeville – Pike County Airport Board owns and operates the city/county airport.  The Southeast Kentucky Chamber of Commerce represents 500 members in eight Kentucky counties and has established a support network for businesses in Southeast Kentucky that are committed to improving the local economy, regional unity, political advocacy and economic development. By working together, these three entities are leading efforts to establish scheduled commercial air service in Eastern Kentucky.  L.B. Schmidt & Associates, LLC is a full-service management consulting company based in Louisville, Kentucky and provides consulting services to this group in the area of facilitating air service.

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Article originally posted on August 31, 2013 to the Appalachian News-Express Web site http://news-expressky.com/

BY RUSS CASSADY

EDITOR

The first concrete steps toward establishing a commercial air service out of the Pikeville-Pike County Airport were taken Friday, with two bodies approving agreements with a company which wishes to have a daily service out of, and back into, Pikeville.

During a special joint meeting on Friday of the Pikeville City Commission and Pikeville-Pike County Airport Board, the agreements and funding sources were approved to get the project off the ground.

According to documentation obtained by the News-Express, the two companies involved in the project, Corporate Flight Management (CFM) of Smyrna, Tenn., the service provider, and Public Charters, Inc., of Avoca, Penn., the ticketing and ground service company, plan to have the service operating by March.

The agreements approved on Friday outline airport services that the airport will provide to the airline and the fees the airport board will charge for the services, as well as how the City of Pikeville will manage its revenue guarantee fund to support the service. 

How the service will operate

The service, according to a statement from the organizations working on the project, will feature nonstop turboprop flights operated by CFM to travel from Pikeville to the Nashville International Airport. Because of the involvement of Public Charters Inc., the statement said, sales platforms for tickets for the new flights will be available on virtually every Internet travel site, such as Expedia, Kayak, Travelocity and others.

From Nashville, passengers can reach the world, officials said.

“The new flights to Nashville will be time to allow Pikeville travelers to connect to nonstop connecting flights to 49 destinations throughout the U.S., Canada and Mexico,” said Luke B. Schmidt, the consultant for the City, Chamber and airport on the project. “Travelers will be able to connect to any of the nine airlines which serve (Nashville), including low-cost carrier Southwest Airlines, which has a major presence in Nashville.

“Fully 23 of the 25 business destinations for Pikeville travelers will be only one stop away by connecting in Nashville,” Schmidt continued. “This new service will eliminate the need to drive to Lexington, Charleston and Huntington/Ashland when it comes time to travel.”

Those flights, unlike a charter service, will operate seven days a week, with one flight departing Pikeville and traveling to Nashville, and another flight returning from Nashville later that day. The flights, officials said, will run seven days a week, and, because of the regulations under which the service will operate, flights can only be cancelled because of extreme circumstances, such as weather or a nationwide or regional grounding of flights.

The service, officials said, differs greatly from a proposal made a few years ago by a company called Locair.

According to documents provided to the News-Express, the current proposal differs from what Locair offered in “every” way, including:

• The airports and flight schedule are approved by the U.S. Department of Transportation (DOT) Special Authorities Division; no changes can be made to either without DOT approval.

• The service will be daily, including weekends.

• All passenger seats on the aircraft are available for sale on each flight.

• There will be combined itineraries with many carriers, including Southwest.

• There will be connecting service at the hub airport’s main terminal — in Transportation Safety Authority “sterile” conditions to hundreds of destinations.

The sterile conditions will mean TSA screeners and inspectors, who will be employed and paid by the TSA, and stationed in Pikeville. Because of the “sterile” treatment, Schmidt said, the planes from Pikeville to Nashville will actually pull up to a terminal, eliminating the need for a second security check to get on another flight. 

Funding source has changed

When the project was in its early stages, it was subjected to a high level of controversy, when it became clear to organizers that they would have to have the support of the Pike Fiscal Court to apply for a $1 million multicounty coal severance grant.

After weeks of controversy, the fiscal court approved by a 5-2 vote applying for the funding for the project, which was later received.

However, this week, documents show, the full $1 million in funding was not obtained through coal severance.

According to a letter obtained by the News-Express, earlier this week, Pikeville City Manager Donovan Blackburn was notified by the Kentucky Department for Local Government that the agency would be funding a grant for $200,000 for the air service project from coal severance.

The reduction in coal severance, Schmidt said, is a direct result of the reduction in mining in the region, which has caused severance tax receipts to fall.

In the same letter, the agency confirms that it is the intent of the Kentucky Transportation Cabinet to fund the rest of the project, contributing a total of $470,588 to ensuring the operation of the service.

The funding, according to documentation provided to the News-Express, will be used to fund a monthly revenue guarantee program, which officials said will only be paid to the carrier if the company’s actual revenue trails the agreed upon monthly revenue target, and in an amount equal to the shortfall.

The service, according to the documents, is projected to carry a total of 5,244 passengers in the first year, with that number climbing to 13,223 the following year.

“The service should start with an average of three revenue passengers per flight in month No. 1 and build to an average of 18.5 revenue passengers per flight in month No. 14,” the documents said.

According to documents, the total amount of revenue guarantee which is planned to be available to the company is $1.425 million, between March of next year through February of 2016, the end of the agreement, with city officials planning to ask the state legislature to fund an additional $104,412 to bring the total available to that amount.

Approximately $750,000 is coming from the U.S. DOT’s Small Community Air Service Development Grant Program, from a grant first approved in 2011. 

Not all convinced of the good of the project

While the Pikeville City Commission unanimously approved the agreements during the meeting on Friday, the Pikeville-Pike County Airport Board approved the agreements by a 5-1 vote, with member Brent Wagner voting against the measure.

During the meeting, Wagner questioned Schmidt on several points of the airport’s end of the contract, including what the airport’s rights and responsibilities are.

Wagner told Schmidt that he was disappointed the board had only received the agreement 16 hours before the meeting.

“It’s hard to prepare and have valid questions when you don’t have the documents in front of you,” Wagner said.

However, Wagner pointed out that one part of the agreement commits the airport board to spending a maximum of $210,000 to bring the service to Pikeville. In response to Wagner’s questioning, Schmidt said that no matter what, the amount the airport would have to contribute cannot exceed that amount.

Also, Wagner pointed out that the contract is written in such a way that it would prevent the airport board from backing out without the city’s permission and that it would lock the airport board in to only being able to add a “mark up” of 50 cents per gallon on the fuel sold to the airline.

Schmidt said the fuel cost being locked is simply an incentive to attract the company, which wants to purchase fuel from the Pikeville Airport to contribute back to the community. The plane, Schmidt said, could fly from Nashville and back without having to fuel up in Pikeville.

“In reading this, I get the impression that there’s a lot of things in line for this company … to make it work,” Wagner said. “But we’re being restricted in many ways. We’re restricted on our profitability. We’re restricted about not being able to take this agreement and speak to the public, the people that’s spending the money for it.” 

Project first-of-a kind

According to Schmidt, the project to bring air service to Pikeville, as far as he is aware, is the first of its kind, in that the airline expects its involvement with the Pikeville-Pike County Airport to be profitable and it could become a model project for the nation.

But, he said, it doesn’t come without risk.

“All this requires a bit of a leap of faith,” Schmidt said.

Pikeville Mayor Pro-Tem Jimmy Carter agreed there is some risk before casting his vote, but said that the possible reward makes the risk worth it.

“We have to take the calculated risk to make sure that we succeed here in Eastern Kentucky,” Carter said. “If we don’t, we’re dead in the water.”

A formal community announcement of the project is currently scheduled for Oct. 17 at the airport. Schedules and ticket prices will be announced at a later date.