The Department of Transportation warns that small airports could lose their subsidies next week as a result of the government shutdown.

Here’s the notice:

If the department is unable to pay EAS carrier subsidies beyond October 12, 2025, by this Notice, we will relieve all EAS carreirs of their obligations under all EAS orders beginning on October 13, 2025, until such time as funding is restored. Air carriers that continue to operate EAS flights beyond October 12, 2025, would do so at their own risk as the Department may not be able to pay the contracted subsidy.

• Read this as a play to leverage members of Congress from affected states. Essential Air Service subsidies are a huge bipartisan boondoggle, and none want to be responsible to their consistuents for any loss in air service.

• The agency’s published ‘lapse plan’ shutting down in 2018–19 explicitly kept the Essential Air Service exempt from pause.

• The program shouldn’t exist in its current form and at its current scale. But this isn’t about cutting the program, it’s about applying pressure to end the shutdown without concessions from the administration.

Generally the Department of Transportation pays Essential Air Service “in arrears” per flight, after receiving monthly invoices. Short lapses don’t instantly stop checks, though processing can lag until staff return. What DOT is doing here is saying,

1. it won’t enforce contract service levels after October 12
   
2. carriers that keep flying can’t rely on retroactive make-whole payments, and
   
3. the statutory 90-day/30-day “hold-in” rules are effectively suspended by administrative notice during the funding lapse.

Agencies can’t incur obligations in advance of or in excess of appropriations. Ordering “hold-in” flying without money would create an obligation, so DOT is making clear it won’t do that. If a carrier flies anyway, DOT isn’t committing to pay later (although a presumption would be that any funding deal would do so).

What they’re doing in using discretion over available funds in DOT accounts seems legal, and EAS contract language genreally includes a “subject to availability of funds/no liability beyond” September 30 clause. But I wasn’t expected this, because as far as I can tell it’s unpredented.

Still the program itself has become bizarre. The Essential Air Service program was created 47 years ago as a temporary measure to soften the blow of airline deregulation. It provided for a ’10 year transition’ period in which small community service could receive subsidies. The program was supposed to end in 1988.

Now, about 175 communities have been receiving subsidies. More than a quarter of those are in Alaska.

• Generally 30-50 seat aircraft, and usually two roundtrips a day
  
• Or more frequencies with 9-seat aircraft

Subsidized cities are supposed to have at least 10 passengers per day, though this requirement can be waived. Many of the planes fly largely empty.

Last year’s FAA reauthorization more than doubled funding for the program, with promised increases in future years.

Airports within 210 miles of a medium hub or larger used to be capped at a subsidy of $200 per passenger because obviously why should taxpayers pay for this..? But the latest update to the law more than tripled this to $650 per passenger for airports within 175 miles of the larger facility. In Tyranny of the Status Quo (1984), Milton Friedman wrote “Nothing is so permanent as a temporary government program.”

People choose to live far away from an airport. And for many of these airports there’s just no justification for subsidies at all.

• When they’re within reasonable driving distance of another airport
  
• Many of these flights don’t even connect to hubs, so driving and picking up a non-stop is more convenient anyway.
  
• The average airline passenger has a six figure income, making this reverse Robin Hood
  
• And flying empty, inefficient planes raises environmental concerns

If you’re traveling out of Pueblo, Colorado you could just as easily drive to Colorado Springs to start your journey. Hot Springs, Arkansas is less than an hour from Little Rock. Decatur, Illinois is less than an hour from both Champaign and Springfield. Why subsidize service 110 miles away to St. Louis? The new law did at least restrict subsidies to airports in the contiguous 48 states that are “at least 75 miles from the nearest medium or large hub airport.” But the distance shouldn’t be measured from a medium hub!

• Lancaster, Pennsylvania is about half an hour from Harrisburg
  
• Muskegon County Airport is less than an hour from Grand Rapids
  
• Owensboro-Daviess County, Kentucky is under an hour from Evansville, Indiana

Not only didn’t the program die in 1988, it grew to $22 million in 1998 and to a discretionary $155 million in 2018. It was authorized at:

• $340 million for fiscal year 2025
  
• $342 million for fiscal year 2026 and 2027
  
• $350 million for fiscal year 2028

The program’s requirement for an average of 10 passengers per day departing an airport can even be waived multiple times under the new law. The DOT can also waive some subsidy limits, too.

The reason this program lasts is concentrated benefits and dispersed costs. Members of Congress and constituents in districts receiving these subsidies care a great deal about them and are willing to exert muscle and treasure to keep them, while the public at large cares very little about the program. At less than $2 per person per year, there’s little incentive for the median American to learn about the program let alone oppose it. But Members of Congress whose districts benefit get onto House and Senate committees responsible for the funds.

Spending on the program had already quintupled over the past 25 years before being almost tripled in this new legislation. It’s grown under both Republican and Democrat-controlled Congresses and administrations. It’s a bipartisan boondoggle. So it’s only fitting that it’s used as a political football during the shutdown.