Federal agency cancels Evergreen contract for Adak

Posted: Tuesday, July 09, 2002

ANCHORAGE (AP) -- A federal agency canceled Evergreen International Inc.'s contract for Adak because the airline failed to provide jet service to the Aleutian Island community.

The Department of Transportation had a $1.5 million contract with the McMinnville, Ore.-based airline under the Department of Transportation's Essential Air Service program.

''(Evergreen) said they would provide passenger jet service to Adak and they haven't,'' said Bill Mosely, spokesman for the Department of Transportation in Washington, D.C. ''They didn't do what they were expected to do.''

Evergreen was awarded the two-year contract in July 2001 based on its proposed purchase of a Boeing 727-100 passenger and cargo airplane. The airline said it would provide Adak with two round trips a week to Anchorage, year-round, with passenger and cargo jet service, according to the Alaska Journal of Commerce.

Evergreen last summer also said it would provide service to the Russian Far East, a route that would be largely underwritten by the Adak federal subsidy.

But over the last year, Evergreen has only provided once-a-week mail and freight service with its DC-9 cargo jet to Adak. Peninsula Airways Inc. has been providing passenger service with prop aircraft, under an interim federal award.

Jerry Rock, president of Evergreen's Alaska operations, said the airline has actively shopped for planes, but the events of Sept. 11 and new bypass mail rules have stalled the purchase of aircraft.

Evergreen and a few other airlines in Alaska have been critical of new legislation affecting Alaska's bypass mail service to rural villages. Sen. Ted Stevens, R-Alaska, has said the new legislation is intended to close loopholes that allow carriers to transport mail without providing passenger or freight service.

Rock said the new legislation, slated to take effect next year, closes the door to any new airline wanting to get into the bypass mail business, and protects incumbent mainline carriers, Air Cargo Express, Alaska Airlines, Lynden Air Cargo and Northern Air Cargo.

''The legislation has held us up,'' said Rock. ''We're not going to go out and purchase aircraft when we are not allowed to compete fairly.''

Meantime, Evergreen last month filed with the U.S. Postal Service to haul bypass mail to Nome, Kotzebue and Bethel, hoping to get revenue before the legislation is enacted.

It's unclear whether Evergreen will resubmit a bid for the subsidy to Adak, or will challenge DOT's decision. Four other carriers had bid on the two-year contract to Adak last year, but only Evergreen offered jet service.

City, borough and Native leaders in the Aleutian Island community lobbied hard for jet service, and specifically Evergreen's proposal. Now, the Aleutians East borough, city of Adak and the Aleut Corp. have each formally asked that the service be rebid.

PenAir is lobbying hard for the entire Adak contract, but the Transportation Department's new bid offering stipulates that an airline must provide service with an airplane that has at least a 60-passenger capacity. PenAir's Saab 340Bs only have 30 seats.

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