How drawn-out negotiations grounded Allegiant’s flight plans at the NoCo Airport

LOVELAND — Travelers along the Northern Front Range are scrambling to rebook flights after Allegiant Travel Co. (Nasdaq: ALGT) canceled its routes from Northern Colorado Regional Airport to Las Vegas and Mesa, Arizona, last week.

The announcement seemingly came out of nowhere, but a prolonged series of discussions between the airport and a third-party air-traffic-control company ended abruptly this month and ultimately caused the staffing delay that would make Allegiant pull out.

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Negotiations begin

Northern Colorado Regional Airport director Jason Licon told BizWest that the airport contacted Serco Management Services Inc. two days after it and Allegiant held a press conference to herald the two routes in mid-August.

That company is the American subsidiary of Serco Group PLC (LSP: SRP), a British provider of public services to governments around the world. Its services span almost every part of the public sector, from managing hospitals and public housing units to maintaining prisons and missile systems.

It also has a near monopoly on traffic control in the western United States, as it’s in the middle of a $187 million operating contract with the U.S. Federal Aviation Administration.

There’s evidence that these discussions were advancing nicely. Serco began advertising job openings for the controllers at the airport within the past few months. But at some point, the negotiations began to stall.

“We had gone back and forth for weeks, if not months, trying to finalize an agreement, and we kept reaching out to the company and kept finding that there’s more and more delays, only to find out that they weren’t able to secure the controllers,” he said.

The pullout

Serco ended the discussions Oct. 8, telling the airport that it couldn’t provide the services it needed to run commercial flights.

Alan Hill, a spokesman for Serco, did not respond to a request for comment seeking details about the negotiations themselves. In a written statement, he said the company couldn’t meet the airport’s staffing needs by October.

“We were unable to meet the airport’s request to have controllers hired and trained at the airport by early October,” he said.

Licon said the plan was to have the air-traffic contractor deal with the U.S. Federal Aviation Administration on setting up a letter of agreement and various safety requirements. But because discussions between the airport and Serco dragged on so long, the airport was far too late in beginning talks with aviation regulators.

In a statement to BizWest, an FAA spokesman said the agency wasn’t aware that the airline and airport had planned to begin flights on Nov. 21 until sometime during the week of Oct. 14. Based on that timeline, it would be impossible for the agency to approve all of the safety requirements needed to allow commercial flights to take off. The FAA plans to finish those safety measures at the airport by Jan. 21, 2020.

“We have a process that ensures safety standards are met and that needs to be completed before both a temporary tower and a virtual tower can begin operations,” the agency said.

Licon called that statement “comical,” saying he knew for a fact that some staffers at the agency were aware of the flight start date.

In an emailed statement to BizWest, Allegiant spokeswoman Hilarie Grey said the airport is responsible for dealing with the FAA. The airline previously left Northern Colorado in 2012, citing the lack of on-site air-traffic control.

False optimism and future testing

Even though Serco couldn’t produce the controllers to begin flights in November, the company is still the prime candidate to provide the staff that will test the airport’s experimental virtual air-control tower, which uses cameras and radar to detect aircraft to send information to off-site controllers at a cheaper cost than building and maintaining a traditional on-site tower.

Hill told BizWest that the company still plans to get enough traffic controllers to test the virtual tower by next year.

“We plan to have controllers at the Northern Colorado Regional Airport in December in order to meet the FAA requirement of establishing Air Traffic Control services in mid-January,” he said.

But Licon isn’t as confident, based on Serco and the FAA’s past statements on getting the mobile tower staffed in time for Allegiant to start flying.

“We do share some skepticism with the airline also on timelines,” he said. “… I think those have been a little optimistic on the FAA side.”