El Dorado News

Monday
November 12, 2018
El Dorado News Times

SeaPort Airlines ceases business operations

By Tia Lyons
This article was published September 22, 2016 at 5:00 a.m.

EL DORADO — A week ago, an official from SeaPort Airlines met with city officials and discussed ways to partner with the local community to better promote the commercial air service in South Arkansas and to regain the community’s trust amid attempts to emerge from a bankruptcy filing.

Late Tuesday afternoon, the community was struck with the news that Portland, Oregon-based SeaPort, unable to rebound from a Chapter 11 bankruptcy filing in February, had been forced to cease operations.

According to a story from The Oregonian/OregonLive, a judge ordered Tuesday that the Chapter 11 bankruptcy be converted to a Chapter 7 liquidation effective at noon on Wednesday.

Airline employees were to have been paid through Tuesday.

A voicemail recording for SeaPort president Tim Sieber directed callers to a statement that was posted to the airline’s website.

“This is a very sad day for our employees, shareholders, and the communities we serve. I would like extend my heartfelt appreciation to the employee team that I have been honored to lead and who delivered industry leading operational performance,” Sieber wrote.

“While we made great strides, a successful financial reorganization did appear possible and we were forced to make the difficult decision to cease operations,” he continued.

Now, for the first time in seven years, El Dorado is without an Essential Air Service provider for South Arkansas Regional Airport at Goodwin Field.

As tough as the situation may seem for a community where EAS is inextricably linked to economic development, it’s familiar territory.

Prior to SeaPort setting up shop in El Dorado in October 2009, the community had gone without commercial air service for nearly two years.

Mike Dumas, president and chief executive officer for the El Dorado-Union County Chamber of Commerce, said SeaPort’s struggles typify economic development obstacles that often plague rural communities who don’t have the air-travel numbers to support larger carriers.

“It’s not a huge surprise. They have been in bankruptcy for several months,” Dumas said. “We were hoping they would get out of bankruptcy. We hate to lose SeaPort.”

“If it weren’t for EAS funding, many cities wouldn’t have airline service,” he said.

The issue is not new to Dumas, who spent much of his 16 years as mayor of El Dorado trying to make sure the community had a reliable EAS provider.

During Dumas’s last term as mayor, the region experienced its longest period — 18 months — without commercial air service since the service was instituted at SARA in the 1960s.

With the then-mayor and the El Dorado Airport Commission at the helm, community leaders worked diligently with the U.S. Department of Transportation to solicit bids and proposals to pick up the routes that were vacated when the area’s former EAS provided withdrew in the spring of 2008.

SeaPort Airlines was awarded the government contract in June 2009, and the airline began flying out of SARA three months later.

SeaPort initially offered daily flights to Memphis and after responding to the requests of the community, the company fought to secure a flight to Dallas Love Field.

Last year, SeaPort switched the Dallas route to George Bush Intercontinental Airport in Houston after experiencing problems at Love Field, including the lack of a dedicated gate and ticket counter space.

The local business community welcomed the switch. Many had wanted the Houston route since SeaPort began offering flights out of El Dorado.

Feedback about the airline’s performance was mostly favorable.

“SeaPort had the best on-time service at Goodwin Field since (formerly) Trans Texas Airways in the 1970s,” Dumas said.

In turn, company officials had said they were pleased with the load factors that were being posted at SARA.

In 2013, SeaPort beat out three other airlines and was awarded another four-year contract to continue providing EAS in El Dorado until 2017.

Bankruptcy

By mid-2015, the El Dorado Airport Commission began discussing complaints from local air travelers about SeaPort’s on-time performance and reliability.

Dalton Sullivan, community affairs manager for SeaPort, told commissioners in July 2015 that some of the delays were caused by ongoing issues at Love Field.

SeaPort began flying to Houston two months later.

Then came news several months later about the bankruptcy filing.

Sieber and other airline officials addressed the issues head-on and shared with the local community some of the challenges that company was facing, such as a nationwide pilot shortage and new federal guidelines regarding flight hours for first officers.

SeaPort began a re-organization that focused on its mid-south hub, which included Arkansas, Tennessee and Texas.

A new focus on improving reliability statistics for the past few months seemed to have begun paying off for the airline, which boasted a scheduled flight-completion rating of 99.9 percent in July and 99 percent in August.

More recently, airport commissioners expressed their frustrations with a change in SeaPort’s fuel-purchasing strategy.

Tim Johnson, manager of SARA, reported in August that the airline was not purchasing as much fuel from the city’s fixed base operation (FBO) — a move that had resulted in a significant drop in Jet A fuel sales.

Commissioners met last week with Noel McDermott, SeaPort director of operations, who agreed to continue working with Johnson to come up with a fuel-purchasing plan that would best fit the needs of the airline and the municipal airport.

McDermott also said then that SeaPort was still struggling to regain its financial footing with a monthly profit of only $850 in August.

The Oregonian/Oregon Live reported Tuesday that SeaPort learned earlier this month that it would lose a key contract and a line of credit that was helping to keep the airline afloat.

Last flight

Johnson told the News-Times that SeaPort’s last flight out of El Dorado took place at 7:30 p.m. Tuesday and that the pilots did not know until they reached Houston.

He said ticket agents at SARA worked until Tuesday night cleaning up the SeaPort ticket counter and clearing out their personal belongings.

The remainder of SeaPort’s belongings will likely remain in the space until the airline receives a directive from the court, Johnson said.

The airport manager said he spent much of the day Wednesday fielding media questions and calls from SeaPort ticket-holders inquiring about their flights and the email notifications they had received about the airline shutting down.

“A few folks who didn’t see the emails showed up for their flights this morning, and they quickly made other arrangements,” Johnson said.

As far as what’s next for the area’s EAS dilemma, community leaders are awaiting word from the USDOT.

SeaPort’s contract for the federal subsidy was to have expired next fall.

Mickey Murfee, chairman of the airport commission, was out of town Wednesday and said he had not yet studied the issue.

“I have not had a chance to talk to anybody about what the (Federal Aviation Administration) is going to do in this situation — if they’re going to give us options,” Murfee said.

Mayor Frank Hash also said that he had not yet spoken to federal officials about the matter, but he remains hopeful of the city’s chances of landing another commercial airline service for Goodwin Field.

Johnson said he expects to receive a letter from the USDOT within the next few days.

“My understanding is that it will explain to us what our options will be,” Johnson said.

“Until we see specifically what it says, my understanding is they probably have a fast-track process to open that contract back up,” he said.

Dumas said El Dorado must work with other Arkansas EAS communities that were served by SeaPort — Hot Springs and Harrison — to help secure the future of regional air travel for the smaller markets.

“We can’t do it by ourselves. Hot Springs can’t do it. Harrison can’t do it. It’s going to take all of us,” he said.

• • •

Customers with tickets on SeaPort Airlines that were purchased with MasterCard or VISA credit cards may apply for a refund through their credit card company. Customers using other credit cards must inquire at their respective credit card companies about refunds.

Tia Lyons may be contacted at 870-862-6611 or by email at tlyons@eldoradonews.com.

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