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State works on new air service grant program


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New Mexico officials are working to establish the rules that will enable the state to provide grants to rural counties and cities that want to establish new routes for smaller passenger flight service from their airports.

According to administrators with the airports in Roswell and Artesia, neither entity anticipates seeking a grant, which is limited to aircraft carrying nine or fewer passengers.

“Our first priority for new air service is still adding a non-stop to Denver,” said Scott Stark, director of the Roswell Air Center.

The Air Center has renewed its competitive search process for a consulting service to identify a new air carrier to supplement the routes already available to Dallas, Texas, and Phoenix, Arizona, by American Airlines.

The state grant program was created by the Rural Air Service Enhancement Act that passed the New Mexico Legislature in March and was signed into law in April. The law is effective July 1, but the first grants probably will not be made until September at the earliest, said Marisa Maez, communication director for the New Mexico Department of Transportation.

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The department’s Aviation Division is administering the program.

Before grants can be made, the state department is holding a rule-making process that begins with a July 8 public meeting. The administrative law could take effect 30 days after that, or about Aug. 9, at the earliest. After the administrative rules become law, grant applications can be made and evaluated on a competitive basis. Factors that will be considered include demand for service for the air routes; economic impact on the cities or counties; and the feasibility of a carrier licensed by the state providing the service.

A total of $9 million for the program has been made available for the initial awarding of grants, Maez said. Of that amount, up to $900,000 can be used for developing needed infrastructure at airports. The rest is to be used to provide minimum revenue guarantees to air carriers, which are to selected after a competitive process.

In the airline industry, revenue guarantees are incentives to have air carriers fly in and out of airports. They are often structured so that air carriers receive payments if they are not operating profitably based on seat sales.

The two-year air service grants can be made for up to $1.25 million for counties or cities to establish new routes for airports that already have passenger service. Grants of up to $1.75 million can be made if passenger service is not already available. Matching funds by the local governments are required. They are 10% or 50%, depending on whether a local government already has passenger service.

The infrastructure improvement grants will be made by the Aviation Division for cities and counties obtaining the air service grants.

Maez said that the department has no indication of how many counties or cities might apply.

“All that can be stated is that 20 of the state’s 50 airports technically qualify to apply,” she said. “This means 20 airports have 20,000 or more residents living within 50 miles. There are airports in all corners of the state that technically qualify to apply.”

Lisa Dunlap can be reached at 575-622-7710, ext. 351, or at reporter02@rdrnews.com.

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Lisa Dunlap is a general assignment reporter for the Roswell Daily Record.