County Contracts With Boutique Air For Albq. Flights

Boutique Air’s Pilatus PC-12 is a single engine, turboprop, pressurized aircraft configured with either eight or nine passenger seats. Courtesy/Boutique Air

An interior view of Boutique Air’s Pilatus PC-12 aircraft. Courtesy/Boutique Air

Staff Report

Los Alamos County Council voted 4-3 to approve a services agreement with Boutique Air, Inc., headquartered in Sacramento, to provide scheduled air service between Los Alamos County Airport and Albuquerque Airport.

Councilor Vice Chair David Izraelevitz and councilors Susan O’Leary and Pete Sheehey voted against the motion, primarily expressing concerned that the County’s financial subsidy of this service might not be in the best interest of its economic development program.

Council approved Option 2 of Boutique’s proposal for three (3) round trip flights to Albuquerque Airport per day, rather than just two. The 18 round trips per week total 1,878 scheduled flights per year  for a total subsidy by the County of $544,418 per year.

Service is anticipated to begin Sept. 1, however, the confirmed start date will be announced soon. Ticket prices will start at $49 one way and increase on a graduated scale depending upon the number of available seats remaining at the time the reservation is made for the flight. The average fare is proposed to be $66.

The proposed agreement has a one year term and the option to renew for two additional one year terms.  

The County has had scheduled air service between Los Alamos Airport and Albuquerque Airport at various times in the past. Most recently, from April 2013 to January 2015, scheduled air service between Los Alamos Airport and Albuquerque Airport was provided by New Mexico Airlines.

This service was subsidized by the County, originally with assistance from a Small Community Air Service Development Program grant from the federal government and then later solely with County funds. The County chose to terminate the contract last January with New Mexico Airlines.

Subsequently, in February the County issued a Request for Qualifications for a new airline to provide scheduled service to Albuquerque Airport. Two firms submitted responses to the RFQ.  Boutique Air, Inc. was chosen by the selection committee as the most qualified airline to provide the service. The County then entered negotiations with Boutique Air regarding a proposed schedule for the flights and the proposed subsidy to be paid by the County.

Boutique Air flies the Pilatus PC-12 aircraft, a single engine, turboprop, pressurized aircraft configured with either eight or nine passenger seats. Boutique is currently flying scheduled air service in New Mexico from Clovis Airport to Dallas-Fort Worth Airport, from Silver City Airport to Albuquerque Airport, from Carlsbad Airport to Dallas-Fort Worth Airport, and from Carlsbad Airport to Albuquerque Airport. 

All of these routes are subsidized by the federal government under the Essential Air Service Program. Los Alamos is not eligible to receive funding from the Essential Air Service Program and at this time cannot apply for another Small Community Air Service Development Program grant. Therefore, the subsidy of the airline will be the responsibility of the County.

However, the County benefits from Boutique’s EAS contracts with the federal government in that a significant portion of the infrastructure required for the airline to operate has been paid for under the EAS contracts. As a comparison, the EAS contract for Boutique to fly four round trip flights a day from Silver City to Albuquerque has a federal subsidy of more than $3.3 million per year.

The most significant differences between the Services Agreement and capabilities with Boutique and the Services Agreement and capabilities with the last airline to serve Los Alamos are as follows:

  • The subsidy for Boutique is fixed at $400,432 assuming 1,227 scheduled flights are completed (98 percent of the total number of scheduled flights). Once 1,227 flights are completed, the subsidy does not increase should more than 98 percent of the scheduled flights be completed. This subsidy is not sufficient to guarantee a profit to Boutique; therefore, Boutique’s profitability is dependent upon the number of passengers they fly and it is to their advantage to increase the passenger boarding rate. The subsidy for the previous airline fluctuated based on the number of passenger boardings. The fewer the boardings the higher the subsidy in order to guarantee profitability for the airline. Therefore, since their profitability was guaranteed, there was no incentive for the previous airline to increase the passenger boarding rate. For FY 2014 the subsidy paid to the previous airline was $426,402.04.
  • Boutique will have a ticket agent on site at Los Alamos Airport to check passengers in for their flights and check their baggage. The previous airline placed this responsibility on their pilots. Therefore, if the plane was late in arriving there was no one present at the airport to answer passengers’ questions or give them information regarding the delay.
  • The Pilatus PC-12 flown by Boutique is pressurized, whereas the Cessna Caravan flown by the previous airline was not. Therefore, the PC-12 can fly in comfort at significantly higher altitudes than the Caravan. The PC-12 is also approximately 100 mph faster than the Caravan. This means that the Pilatus makes possible future air service to more distant cities than was practical in the Caravan.
  • Boutique requires all of their pilots to be qualified to fly passengers in Instrument Meteorological Conditions (IMC – a term used to designate weather conditions involving reduced visibility or low cloud layers). At the time the contract was cancelled with the previous airline they had only one pilot qualified to fly passengers in IMC conditions. This resulted in a large number flights being cancelled due to weather conditions that would have otherwise been possible to complete.
  • Boutique can interline with other destinations such as Carlsbad and Silver City. Boutique is located at the same counter space in the Albuquerque Airport as the previous air carrier was located, which will facilitate the transition to this new airline.
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