Great Lakes Aviation landing in Jonesboro.

Great Lakes Aviation Ltd. of Cheyenne, Wyo., said it will begin providing airline service to Jonesboro Municipal Airport as soon as it acquires more airplanes.

Great Lakes recently received a $1.6 million two-year contract from the U.S. Department of Transportation to provide service to Craighead County under the Essential Air Service program.

Air Midwest Inc. of Phoenix, a subsidiary of Mesa Air Group Inc. that currently has the EAS contract to serve Jonesboro and other cities in Arkansas, has announced that it will discontinue service on June 30.

Air Midwest blamed record-high fuel prices, low demand and a difficult operating environment as the reason for shutting down.

"Unfortunately under the current economic conditions there was no foreseeable way to achieve sustained profitability," Jonathan Ornstein, CEO of Mesa Air Group, said in a statement. "Even with subsidies from the DOT, Air Midwest has been unable to sustain profitability for the last several years."

Great Lakes spokeswoman Monica Taylor didn't have a timetable for when the Jonesboro flights would start.

The service will include two flights a day to St. Louis, she said.

Taylor said Great Lakes should have better luck running the Jonesboro service than did Air Midwest.

Air Midwest couldn't predict when it signed its contract that fuel prices were going to jump. And when the prices rose, Air Midwest was stuck with the contract.

"We know what the fuel is right now," Taylor said. "It's a guessing game because if it does continue to increase, we too will be locked into a losing contract. But we were able to adjust our operational cost to today's market and hope that it does not continue to rise."

Great Lakes said it would lose $1.5 million annually if it provided service to Jonesboro without a subsidy from the government, according to a document Great Lakes filed with the DOT.

But with the subsidy, Great Lakes is expected to earn $105,000 annually on the Jonesboro route.

Great Lakes reported a net income of $19.2 million on revenue of $98.2 million in 2007. In 2006, the airline had a net income of $15.7 million on revenue of $87.6 million.