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Taxpayers Resume Funding South Dakota Flights after MSP Route Shutdown

You may never have boarded a flight to Watertown, South Dakota, but you're paying for it.

5 EYEWITNESS NEWS investigated last fall, when the city of 22,000 people shut down its only passenger flights, which connected Watertown to Minneapolis-St. Paul International Airport.

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Now, the city is taking off once again - this time, with a company that has no experience flying scheduled routes and was found financially unfit by federal regulators 18 months ago.

Last year, a round-trip ticket from MSP Airport to Watertown cost less than $400. But at the time, those flights also carried a hidden price tag of more than $1,000 per passenger - paid for by taxpayers.

"That's huge, and I can't understand anybody wanting to fund something like that because you look at that, and it's just a waste of taxpayer's money," Watertown Mayor Steve Thorson said last fall.

On the average flight, just two of nine seats were occupied. But on Aug. 15, planes five times larger debuted a new subsidized route: Watertown to Pierre, South Dakota, and on to Denver. The Twin Cities route is dead.

"It's another fleecing of the taxpayer," said Annette Meeks, founder and CEO of the Freedom Foundation of Minnesota.

5 EYEWITNESS NEWS also dug deeper and discovered that Aerodynamics, Inc., better known as ADI, the company chosen by the federal government to fly the new route, has never run scheduled flights until last month.

According to U.S. Department of Transportation documents, DOT initially found ADI financially unfit, after the company's now-former CEO was found to have committed fraud. In January 2015, that prompted the DOT to rule... "... ADI does not possess the managerial competence necessary... nor does it have the proper... regard for the laws and regulations governing its services."

Comments in a public regulatory file slammed the company. One stated, "ADI is trying to survive on the speculation of government funds but reality is that it is not financially fit to operate."

What's more, last summer, ADI was bought by the owner of Seaport Airlines, which, within six months, canceled most of its federally-subsidized routes with no notice and declared bankruptcy.

Still, DOT declared ADI financially fit in May.

Mickey Bowman, Senior Vice President and COO of ADI, said Seaport's history will not repeat itself with ADI.

Bowman said ADI's operations and management are entirely separate from those of Seaport Airlines, and that 57 years of experience running charter service means it can handle scheduled flights.

"What we have to come and do in order for the taxpayers to truly get their return is to provide a quality air service that is dependable and well-priced," Bowman said.

5 EYEWITNESS NEWS asked Thorson if he has any concerns about ADI's financial situation moving forward.

"I don't (have any concerns)," Thorson replied. "I think what we're seeing is that they're going to be financially sound and fit."

Thorson said the new route is a good deal for both taxpayers and his city.

"When you think about the needs in this country and where our tax dollars go, they could certainly go to a lot better causes than daily route airplane route service to Watertown, South Dakota," Meeks said.

Meeks scoffed when 5 EYEWITNESS NEWS told her the new Watertown flights will cost taxpayers $2.3 million per year.

"I do think the government should be a much better steward of how they allow our taxpayer dollars to be used," Meeks said.

The subsidized flights are part of Essential Air Service, a federal program that keeps planes flying to remote airports.

DOT has sad it is trying to contain the program's costs. It's also threatening to cut Watertown out of the program entirely because its subsidy far exceeds the $200-per-passenger cap set by the federal government. However, Watertown has objected, arguing it should be exempt because it's located so far from MSP Airport.

Nationally, federal spending on Essential Air Service has increased 600 percent over the past 20 years, reaching $263 million during the last fiscal year.

Since Watertown lost its subsidized flights to the Twin Cities last fall, most passengers have had to drive 100 miles to catch flights out of Sioux Falls instead.

Credits

Stephen Tellier

Copyright 2016 - KSTP-TV, LLC A Hubbard Broadcasting Company

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