Economic development

November 6, 2013 By Luke Schmidt

Officials announce commercial air service in Eastern Kentucky WYMT-TV (Hazard)

Article originally posted to the WYMT-TV (Hazard) web site on November 6, 2013 http://www.wkyt.com/wymt/home/headlines/Officials-announce-commercial-air-service-in-Eastern-Kentucky-230907141.html

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

Officials announce commercial air service in Eastern Kentucky

By: Whitney Burks – Email

Posted: Wed 7:16 PM, Nov 06, 2013

PIKEVILLE, Ky. (WYMT) – Wednesday was described as a monumental day for Pikeville and our region as officials announced the first passenger airline to serve Eastern Kentucky.

For years it has been a dream for many leaders in Pike County and the commonwealth.

“Commercial air service is terribly important in linking up particularly the business community with the rest of the world,” said Congressman Hal Rogers.

On Wednesday those leaders made the official announcement that the first passenger air service, Appalachian Air, to serve Eastern Kentucky is landing here at the Pikeville-Pike County Regional Airport, beginning with daily roundtrip flights to Nashville International Airport in March.

“As leaders of the great people of the Appalachian region we must stop living in the dreams of yesterday, wake up and understand the reality of today and find smart ways of making a better and brighter tomorrow,” said Pikeville City Manager Donovan Blackburn.

Governor Steve Beshear and Congressman Hal Rogers, both deemed instrumental in getting commercial air service here, say it is another step in moving the region forward and making it more accessible.

They say it is a great beginning to something they announced recently called Shaping Our Appalachian Region, or SOAR.

“Everybody took a lot of risk to get us to where we are today. That’s what it’s going to take to move our region ahead. We can do it. This is proof we can do it. It’s a vital part of moving our region ahead,” said Gov. Steve Beshear.

And they are hoping the air service will help business and tourism in the mountains take off.

November 6, 2013 By Luke Schmidt

Taking flight; after months of speculation…Appalachian Air is a reality (Pikeville) Appalachian News-Express

Article originally posted to the (Pikeville) Appalachian News-Express web site on November 8, 2013 http://news-expressky.com/edition/

Taking Flight

After months of speculation, debate and planning, Appalachian Air is a reality

BY CHRIS ANDERSON

NEWS EDITOR

Commercial air service in Pike County figuratively took off months ago with the awarding of a federal grant. On Wednesday, however, the service had its first literal takeoff.

At an unveiling event Wednesday afternoon at the Pikeville-Pike County Regional Airport, local, state and federal officials unveiled the county’s new commercial air service and also revealed the name for the service — Appalachian Air. About 300 people gathered in one of the airport’s hangars for the unveiling of the service, which saw officials such as Gov. Steve Beshear and Congressman Hal Rogers join local officials in lauding the establishment of the service and encouraging residents of the region to utilize the new airline.

Pikeville City Commissioner Jimmy Carter, who opened the event, said the establishment of commercial air service was the result of a group of determined local leaders who never gave up on their hopes for commercial air service. He said the launch of commercial air service, expected to begin carrying passengers in early March, will make the region accessible to the rest of the world.

“This is an opportunity to open the hills of the Appalachian region to the world,” Carter said.

Carter was joined on stage by several people who had a part in establishing the air service venture. Carter added that the air service is not a venture of chance, but one which officials, such as the ones onstage with him during theevent, believe will work and be successful.

“Trust me, this did not happen by accident or chance,” he said.

Pikeville City Manager Donovan Blackburn, while quoting iconic aviation pioneer Charles Lindbergh, said the region’s elected and appointed officials have to stop “living in the dreams of yesterday” and “wake up and understand the reality of today.”

“We need to understand that doing the same thing over and over and expecting different results simply does not work,” he said.

Blackburn detailed the steps taken by local officials to establish Appalachian Air. He said there have been several starts and stops, but those seeking to establish the service persevered and eventually were successful in luring an airline to the region — in Pike County’s case, Corporate Flight Management.

“Finally, after four contracts, here we are,” Blackburn said. “Through the labor and cooperative spirit of many, we were successful.”

State Sen. Ray S. Jones II spoke about the apparent support for the commercial air service initiative. He said in spite of those who doubt the service will work, he believes it is a worthwhile venture.

“I think the turnout, if you look around this room, it’s clear that the people of Eastern Kentucky support commercial air service,” Jones said. “We’ve always had people that were skeptical about Eastern Kentucky.”

Jones said there have been doubters for such ventures as the Kentucky College of Osteopathic Medicine at the University of Pikeville; Pikeville National Bank; and the continued growth of Pikeville Medical Center. He said those doubters have been silenced by those ventures’ successes and, he believes, they will be silenced again on commercial air service.

“I think when we look back a few years from now, the naysayers will be proven wrong yet again,” Jones said. “I think that this will be a hugely successful undertaking.”

Jones also addressed the airport board’s near-unanimous support of the commercial air service venture. He did not shy away from the fact that the venture was not universally accepted as viable and approved.

“When this project first came to my attention, it was pretty quickly obvious that there some folks who were naysayers, who were skeptics,” he said. “It’s okay to be skeptical of a new idea. It is not okay to be an obstructionist.”

Jones went on to commend the members of the Pikeville-Pike County Airport Board who voted in favor of the contracts between the City of Pikeville, the airport board and the airline to establish the commercial service.

Absent from Jones’ recognition of the individual members of the airport board was member Brent Wagner, who voted against entering into the contracts.

Rogers, who began his remarks by complimenting Pike County for its resilience in establishing the air service, said the establishment of the service was both difficult and complicated. He complimented local officials for their workon the venture and said the dedication of those working on the initiative “typifies the kind of attitude that I love about the mountains of Kentucky.”

“I’ve learned one thing about Pike County and Pikeville: When you people set your mind to something, get out of the way, and this is one of those big times,” he said.

Beshear said the new service will breed opportunity for the region, which has traditionally been one of the most difficult to reach. He said many facets of the region will benefit from it.

“This daily service will support the coal industry and existing initiatives related to the health and higher education sectors of Eastern Kentucky, and even more importantly it’s going to open up new opportunities just like a new road or highway would do,” the governor said. “It’s part of our ongoing efforts to invest not only in the physical infrastructure of this region, but also in the people infrastructure, the human capital, in this region.”

The new air service is expected to depart Pikeville seven days per week upon its anticipated launch on March 3, utilizing 19-passenger Jetstream J32 turboprop airplanes. As part of the contract to lure the service, local officials agreed to a revenue guarantee agreement with the airline to compensate for unsold tickets.

Southeast Kentucky Chamber of Commerce Chairman Danny Vanhoose said he is confident that if the turnout for Wednesday’s event is an indication of the initiative’s support, funding may not be an issue. He also said the air service is an important part of the future economy of the region.

“Certainly, this is a key component to economic development, economic diversification,” Vanhoose said. “This is certainly something that is an absolute critical need that we’ve had.”

Airport board Chairman Bill Hickman spoke only briefly during Wednesday’s event, but used his time to encourage those in attendance to support the service.

“Buy tickets, please,” Hickman asked, drawing laughter from the crowd.

November 6, 2013 By Luke Schmidt

Launching of commercial “Appalachian Air” Service in Pike County Williamson (WV) Daily News

Article originally posted to the Williamson Daily News web site on October 6, 2013 http://williamsondailynews.com/apps/pbcs.dll/article?avis=LO&date=20131112&category=news&lopenr=311129973&Ref=AR

Launching of commercial “Appalachian Air” Service in Pike County

Commercial flights to begin on March 3, 2014

by Rachel Baldwin rbaldwin@civitasmedia.com

PIKEVILLE, Ky. – What was once though to be only a pipe dream and an impossible feat is now becoming a reality for the residents of the Tug Valley area who hate the thought of traveling to Charleston, WV or Lexington, Ky. in order to board a commercial flight.

According to Air Service Project Consultant Luke Schmidt, March 3, 2014, is the date the first flight is scheduled to depart. Pikeville is just one step away from important destinations like Chicago, New York, Washington, D.C., Dallas, plus many other destinations. More importantly, for the first time, companies interested in investing in this region will now find it much easier to get here, which will in turn make the location more appealing in a business sense.

Schmidt was quoted as saying that access to the global air service system is what the new service is all about, commenting that for example, coal company executives will be able to board a plane in Pikeville and after only two stops, meet with potential new markets in places such as China, India and Latin America.

Schmidt was joined at the ribbon cutting ceremony held last week at the airport by Ky. Governor Steve Beshear, U.S. Congressman Harold “Hal” Rogers, and several other state and local officials. The new Appalachian Air plane was unveiled during the festivities and was described as a sleek, high-performance British Aerospace BAE Jetstream 32 plane, and those in authority permitted 19 individuals to take a short, maiden flight.

Congressman Rogers was one of those who took the flight and said that it was truly a great day for not only Pike County but for all of Southeastern Kentucky and it’s surrounding areas, and encouraged people to utilize the service to make it a success.

Appalachian Air will provide one, round-trip flight every day of the week between the Pikeville-Pike County Airport and the Nashville, Tennessee International Airport. Once in Nashville, passengers may link with connecting flights that travel non-stop to over 50 major destinations in the United States, Mexico and Canada. The trip from Pikeville to Nashville is expected to take approximately 1 hour and 20 minutes.

For years, officials have been working toward bringing commercial flights to the local region and feel that this service will provide many conveniences to those that call Eastern Kentucky home.

Rules are being implemented that explain how passengers flying out of Pikeville will undergo security screenings before departing and will not be required to repeat the process once they arrive in Nashville. The airport authority will also offer free parking, as well as short check-in and security lines. All public charter flights are regulated by the U.S. Department of Transportation, which means that the federal government places strict limitations on the cancellation of public charter flights, as well as the fact that Appalachian Air passenger funds must be held in an escrow account approved by the government until the flight is complete.

For more information on the future flight plans for Pike County, you may visit their website at http://appalachianair.com.

November 6, 2013 By Luke Schmidt

Pikeville to have daily air service to Nashville WVLT-TV (Knoxville)

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.

November 6, 2013 By Luke Schmidt

Pikeville to Nashville Air Service to Begin in 2014 WMKY-FM (Morehead State University Public Radio)

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.

November 6, 2013 By Luke Schmidt

Scheduled commercial air service is now a reality in Pike County, KY WSAZ-TV (Huntington/Charleston) web site

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.

November 6, 2013 By Luke Schmidt

New Passenger Air Service Lands in Pikeville

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.

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.

(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.

October 6, 2013 By Luke Schmidt

Subsidy needed to launch commuter air service (Somerset) Commonwealth Journal

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.

September 6, 2013 By Luke Schmidt

Pikeville Air Service Project Partners Issue Response…

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.

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