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Show Key Airlines Announces Decision To Terminate Moab Service Key Airlines, which has been serving Moab for nearly 3 years, stated in a letter to Utah Governor Calvin L. Rampton this week that they have made a decision to terminate service. This decision was made according to the letter from James C. Bacon, Executive Vice President and General Manager of Key Airlines, on the basis of financial losses experienced on the route and what he termed an unfair division of subsidies between Key and Skywest Airlines. The letter reads: "Over the past few months considerable time and effort have been placed in the formation of a much needed Commuter Air Carrier Demonstration Program Pro-gram and Study to determine the states needs relative to commuter airline service. Your efforts and response to this program have been very encouraging and much appreciated appre-ciated by all concerned. "With the approval of the study given by the State Legislature, a meeting was held on Thursday, February 5th, with members of the Air Transportation Committee. It was announced that because of a reduction in the commitment by the FAA, the proposed $255,000.00 study would now be funded at approximately $148,400.00. It was also announced that the Executive Board of the Committee had decided to grant both Skywest Airlines and Key Airlines a total of $40,000.00 to be split equally ($20,000.00 to each carrier) for the demonstration portion of the study. The consulting firm will receive approximately $85,000.00 to handle the study portion of this project. , "Key Airlines decided to withdraw from the Demonstration Demonstra-tion Project because we do not feel the split between the the study and the subsidy is in the best interests of the people of the 'state and the allocation between the airlines is not based on need, but on an arbitrary split which is unfair to us. "Skywest had originally petitioned pe-titioned the Committee for $25,000.00 and Key Airlines $65,000.00 to participate in the demonstration. At the meeting, meet-ing, Skywest officials stated the $20,000.00 figure would be acceptable to them. "Our airline provided the residents of Southeastern Utah with an exceptionally high degree of reliable and responsive respon-sive airline service for nearly three (3) years; unfortunately, we are faced with continued losses in serving this route. These are losses our company cannot afford to subsidize any longer. We had hoped this Commuter Demonstration program pro-gram would give us the financial stability to continue service to Southeastern Utah. The proposed $20,000.00 as our share of the demonstration will not begin to cover our losses. "Key Airlines has for over one year now attempted to continue service in Southeastern South-eastern Utah and work out some long term solution to our financial problems while absorbing ab-sorbing the losses. A short term subsidy of $10,000.00 which covered less than 23 of our losses was worked out by your staff for the period of November 1975 through January Janu-ary 1976 but there again we feel this was unfair to us and the citizens of Southeastern Utah since Skywest got $15 thousand based on less need. "I am sure you know that Key's stock is. owned by Johns-Manville and that a considerable amount of money has been invested over the past year to establish Key as a viable operation. However, the time has come when they must realize some return on this investment. Accordingly Johns-Manville has established establish-ed profit objectives for Key and expects them to be met. "We cannot escape the cold-hard financial facts with which we are now faced and have made the decision to terminate service to this area. If another carrier wants to take over this service, Key within the framework of its planning will provide an assistance possible to the new carrier. "Our decision today, while in the best interests of our company economically, has not been an easy one to make. We have, over the past few years, made many local friends along this route. We will miss them and their hospitality. "Governor Rampton, if you desire both myself and E. Paul Burke, Senior Vice President, Johns-Manville will meet with you at your convenience to discuss our decision and the reasons behind it." |