Merced leaders stick by decision to switch companies for airline contract. Here’s why

City leaders Tuesday opted to stay the course on a prior decision to select a new airline for passenger service at Merced Yosemite Regional Airport — though the support was not unanimous.

The Merced City Council voted 4-2 to choose Advanced Air over Boutique Air for an Essential Air Service (EAS) contract with the city.

City leaders have the expectation that Advanced Air will provide much-sought airline service between Merced and Las Vegas. But Boutique Air officials trumpeted an economic package they say would bring jobs and investment.

EAS contracts address continued air carrier service concerns throughout the nation’s rural areas. The program provides an operating subsidy to air carriers through a contract with the U.S. Department of Transportation and the selected airline.

Boutique Air had held the contract at Merced Yosemite Regional Airport since 2015.

Council members Fernando Echevarria and Bertha Perez voted no, opting to support Boutique Air instead of Advanced Air. Councilmember Jesse Ornelas was absent.

In previous meetings and on Tuesday, Echevarria reiterated support for Boutique Air because of its promise to inject new dollars and jobs into District 2, which encompasses south Merced.

Perez voted for Boutique Air, saying the San Francisco-based company was only one who reached out to her with their proposal. Perez pointed out she wasn’t present when Advanced Air gave their proposal presentations at the last few council meetings.

Shawn Simpson, CEO and chairman of Boutique Air, shared that keeping Boutique Air would deliver more than a million dollars total in salaries to new employees at the airport.

He said Boutique Air would also work with the city to obtain a federal opportunity zone designation.

An opportunity zone is defined by the IRS as an economically-distressed community that could benefit from economic growth and job creation, while also providing tax benefits to investors.

“Opportunity zones in the United States are places that need investment, there’s additional incentives for that, and the reason I bring it up is because there’s a need to improve the economy here and we’re ready to do that (with Boutique Air),” Simpson said.

Edwin Kainth, president of the Merced Hotel and Lodging Association and supporter of Boutique Air, said keeping Boutique Air would allow for the continuation of flights directly to Los Angeles International Airport (LAX), which connects to other major airports.

In addition, Kainth said keeping Boutique Air is more affordable for the Merced community. He also supported Boutique Air because of their proposal to bring an aircraft maintenance and a pilot training center, more jobs, and create a partnership with UC Merced to bring more internship opportunities for students.

Perez asked Levi Stockton, CEO and founder of Advanced Air, if they would be willing to bring jobs to Merced and invest in the community. She also asked whether flights will be cheaper than Boutique Air.

Stockton responded stating “we will bring more jobs, and promise what we can deliver,” he said.

“It’s one fair price every day all day,” Stockton said to Perez. “Our services to Las Vegas and to Los Angeles, and the option is (flying into) Hawthorne (Municipal Airport) or LAX, the choice is up to you.”

Council member Blake expressed support for Advanced Air and having Boutique Air as the alternative option, but asked why the proposed jobs and economic development weren’t included in Boutique Air’s proposal.

Simpson said it was a private deal between two parties, discussed with Tom Lopes, president of the Gateway Air Center.

“We didn’t want to broadcast that everywhere, his interest in doing this and mine (on economic development) is very much there, but we didn’t want to make a big deal out of this,” Simpson explained.

Moving forward with Advanced Air

Mayor Matthew Serratto said he voted for Advance Air because Southern Airways, who initially backed out of the proposal, spoke highly of Advanced Air.

Other council members previously expressed support for Advanced Air at a previous council meeting because of its proposals to include flights from Merced to Las Vegas International Airport.

None of Boutique Air’s proposals included flights from Merced to Las Vegas.

In addition, Advanced Air pledged $70,000 annually to market the airport. Advanced Air also planned to align flights with bus schedules to Yosemite, expressing support and knowledge of Merced’s economic development and tourism needs, according to city officials.

Councilmember Delray Shelton once again echoed his support for Barbara Hunt, Advanced Air vice president of business operations and for the airline as a whole.

“Her promise and commitment is believable as well as her leadership,” Shelton said. “I do think that Merced needs something new and I think it’s Advanced (Air). I, too, stand by my very first offer of support of Advanced (being) one, with Boutique being number three.”

The current contract with Boutique Air will expire on July 31.

While the federal Department of Transportation ultimately makes the decision as to which airline gets the new contract, the city’s recommendation is taken into account.

However, the federal government’s choice frequently aligns with the city’s suggestion, according to Merced officials.

This story was originally published July 8, 2021 at 5:00 AM.