Southern Airways Express (9X, Memphis Int'l) and Air Choice One (3E, St. Louis Lambert Int'l) are trying to have Boutique Air (4B, San Francisco, CA) disqualified from bidding for an Essential Air Service (EAS) contract at Jackson, TN, claiming the carrier’s proposal does not meet the contract's requirements for service to the Tennessee airport.

The two airlines have submitted a joint motion to the US Department of Transportation (DoT) to have Boutique Air disqualified as an eligible contender for the EAS for the term beginning June 1, 2021. Alternatively, they have requested the DoT to dismiss all Jackson EAS proposals received and to re-solicit offers.

Five carriers - Air Choice One, Boutique Air, Cape Air (9K, Hyannis), Silver Airways (3M, Fort Lauderdale Int'l), and Southern Airways Express - have applied for the new contract term, but the DoT has not yet made a decision.

In its Request for Proposals issued in September 2020, the applicants state the DoT had required submissions to match the community’s current services, namely 18 weekly round trips to St. Louis Lambert Int'l, a medium-size hub. The DoT had stated it would also consider proposals, with community support, to a different airport, as long as it provided numerous connecting opportunities to the national air transportation system. Where the nearest hub airport was more than 400 miles (643km) from the eligible place, service to a small hub would be acceptable, the DoT had said.

According to the complainants, the four applicants other than Boutique Air had heeded these instructions. They had submitted proposals involving up to six options with services exclusively to large and/or medium hubs. However, Boutique Air's proposal had partially ignored the instructions by including an offer of service from Jackson to Pensacola Gulf Coast Regional, a small hub, which, the airlines argued, did not meet the requirement for numerous national connections.

In a letter dated December 8, 2020, the City of Jackson, Madison County, and the Jackson-Madison County Airport Authority had jointly supported Boutique Air’s bid to connect Jackson with Atlanta Hartsfield Jackson and Pensacola. However, the airline argued that given the clear DoT instructions, “it would be manifestly unfair” to select Boutique Air’s option.

“Movants wish to stress that service from Jackson to Pensacola or a similarly irrational location is by no means consistent with the objectives of the EAS programme. The programme exists to connect small communities to the national air transportation system as efficiently as possible – not to link such communities to the location of vacation homes or resort properties served by airports with little or no connectivity. If Boutique or any other carrier believes the Jackson-Pensacola market can support financially self-sustaining air transportation, it is free to inaugurate unsubsidised service at any time – so long as the service is truly unsubsidised. But the squandering of federal dollars on flights supported only by an ulterior and frankly dishonest motive is antithetical to the very concept of Essential Air Service. There is simply no justification for taxpayer dollars being misapplied in this manner,” they stated.

The complainants charged that Boutique Air’s proposal was “only the latest in a series of unrealistic, nonconforming or improper offers" it had submitted to the department. In their view, they said, “Boutique has crossed a line that should not be crossed, and the time has come for DOT to address the situation with decisive action”.

In support of their allegation, they cited what they called “unethical” zero-subsidy bids submitted by Boutique Air for EAS contracts at Sioux City and Joplin, both for which the DoT had not yet selected a winning carrier. In both cases, they said local city or airport authorities had found Boutique Air’s zero-subsidy bids to be financially unfeasible. Instead, they alleged, they had been clear attempts to pre-empt the market versus carriers that had submitted realistic proposals.

In another example quoted, Boutique had allegedly shifted half of its Muscle Shoals EAS commitment from Atlanta/Nashville Int'l to Pensacola, Florida, in a move the airlines claimed was serving holiday homeowners and did not provide the community with national air connections.

Two further examples - Carlsbad, NM, New Mexico and Chadron, Nebraska – were quoted where, the airlines alleged, Boutique Air was “currying favour with officials at the same time those officials are formulating comments on several EAS proposals”.

Boutique Air chief executive Shawn Simpson was not immediately available for comment.