The Essential Air Service program was created in the late 1970s as a temporary measure to soften the blow of deregulation. It provided for a ’10 year transition’ period in which small community service could receive subsidies. And it’s the perfect example of the old axiom that there’s nothing as permanent in life as a temporary government program. The program was supposed to end in 1988.
Instead, the Senate’s FAA reauthorization bill includes a tripling of funding for the program going forward.
Now, about 175 communities have been receiving subsidies. A third of those are in Alaska.
- Generally 30-50 seat aircraft, and usually two roundtrips a day
- Or more frequencies with 9-seat aircraft
Many of the planes fly largely empty. In the past the cost of the program per actual passenger has been over $900. Now trips to medium and large hubs less than 210 miles away aren’t supposed to be subsidized at more than $200 per passenger (still a ton!). And subsidized cities are supposed to have at least 10 passengers per day, though this requirement can be waived. Also,
49 U.S.C. § 41731 states that to be eligible, a community must have had an average subsidy per passenger of less than $1,000 during the most recent fiscal year, as determined by the Secretary of Transportation or face termination of subsidy eligibility, regardless of distance to a hub airport.
For many of these airports there’s just no justification for subsidies at all.
- When they’re within reasonable driving distance of another airport
- When the average airline passenger has a six figure income, it’s reverse Robin Hood
- And when flying empty planes should raise environmental concerns?
Yet here’s what FAA reauthorization does to the Essential Air Service program:
- Allows subsidies for airports only if they are “at least 75 miles from the nearest medium or large hub airport,” for airports in the 48 contiguous states.
- Requires such airports to have “had an average of 10 enplanements per service day or more, as determined by the Secretary, during the most recent fiscal year” although the DOT Secretary can waive this requirement up to two times in a row if they believe the situation is “temporary.”
- Limits continued subsidies to airports where the subsidy is less than $500 per passenger if “less than 175 driving miles from the nearest large or medium hub airport” although the DOT Secretary can waive this requirement up to two times in a row if they believe the situation is “temporary.”
- Limits continued subsidies to airports where the subsidy is in all cases less than $1,000.
- Has historically been a part of the program:
(4) is a community that, at any time during the period between September 30, 2010, and September 30, 2011, inclusive—
(A) received essential air service for which compensation was provided to an air carrier under this subchapter; or
(B) received notice of intent to terminate essential air service and the Secretary required the air carrier to continue to provide such service to the community.
- Allows the DOT Secretary to require airlines to continue their service, even if they seek to terminate a subsidized route with required 180-day notice, provided that the government will then increase payments to the airline to provide it with “a reasonable return on investment” recognizing “the fully allocated actual cost to the air carrier of performing the basic essential air service that was being provided when the 180-day notice was given under subsection (a) plus…at least 5 percent of operating costs.”
Increased funding is as follows:
(A) in paragraph (1), by striking “$50,000,000” and inserting “$154,400,000”;
(B) in paragraph (2), by striking “$155,000,000 for fiscal year 2018,” and all that follows through “March 8, 2024” and inserting “$335,000,000 for fiscal year 2024, $340,000,000 for fiscal year 2025, $342,000,000 for fiscal year 2026, $342,000,000 for fiscal year 2027, and $350,000,000 for fiscal year 2028”
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.
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?
- Lancaster, Pennsylvania is about half an hour from Harrisburg
- Visalia is 45 minutes from Fresno, and has Bakersfield to its south
- 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 $150 million in 2018. Spending on the program had already quintupled over the past 25 years before being tripled in this new legislation. It’s grown under both Republican and Democrat-controlled Congresses and administrations. It’s a bipartisan boondoggle.
And not for nothing, but FAA reauthorization doubles funding for Small Community Air Service Development Grants as well. It also provides for a study of turning the essential air service funds into block grants allocated to governors of eligible states rather than managed by the Department of Transportation.
Meanwhile, DOT is also directed to consult with the State of Alaska on whether cities that lost air service between July 1968 and October 1978, and not given subsidies before January 1982, might now have sufficient population to warrant new subsidies.
I agree with you and another benefit would be cities such as Champaign and Springfield service would be more viable. Alaska is a little different in that ground transportation is more difficult in some areas.
Much like the Republicans have disproportional political power in the US above their numbers, so too do rural populations have such power via their representation in Congress. Given the dynamnics nowadays, it would be a surprise to me if EAS type subsidies were to have less support in Congress nowadays than they used to have a couple of decades ago. Keep in mind that rural-area Republicans are now even less about economic libertarianism than what little they were before. Guns and T rump-peddled GBUSA bibles are the order of the day.
Pork for the district. That is one things all elected officials believe in. Doesn’t matter if they are Republicans, Democrats, white, Black, Freedom Caucus or Democratic Socialists.
It is about moving mail, packages, and resources to these regions. Not everyone drives and it would cost more to deliver goods if not for these services. Passengers are not necessary but help pay for the transportation of goods.
Retired Gambler,
The purpose of having elected officials is so that they should be responsive to constituent concerns and tend to deliver for their constituents. But in this regard too the matrix of benefits vs. costs and whether a particular benefit or cost is concentrated or diffuse drives whether and how something gets pursued or stopped.
@GUWonder +1
@Steve – to alaska, sure. there’s really not many packages moving on a Cape Air Cessna.
GUW, how exactly does GOP have more power than their numbers? I think you’re just upset that the Constitution prevents leftists from turning a small majority into a totalitarian state.
Weird take that that you think we conservatives support these programs…it’s leftists like you that support government meddling in every aspect of the economy and in people’s lives. Politicians on both sides love to add pork for their own constituents so they can say they did something and stay in power, nothing more, despite your TDS rantings.
I am perfectly fine with rural areas having disproportionately more political influence in line with the Constitution. And EAS is fine by me too. 😉 I am not fine with insurrectionist supporters and their fellow travelers who want to mandate that women should have to carry to term the child of rapists or anyone else for that matter and otherwise want government to meddle with women’s uterus matters. I am not buying the myth that “conservatives” are opposed to supporting government meddling in people’s lives. But Ye Lord T-rump is not a conservative. He’s more like an anti-American wannabe banana republic dictator — and that probably explains his affinity for Putin, “Little Rocket Man” in North Korea, the fundamentalist fascist Modi, autocratic petro-sheikhs, wannabe Ottoman Erdagon and Netanyahu.
The other side of small city subsidies is that deregulation of the airline industry has resulted in more competition and better pricing for large cities.
There are valid reasons why the big 3 each serve 200+ domestic cities but low cost carriers – including Southwest – serve half of that number.
There is a cost, regardless of industry, to a totally free market even before you factor in geographic isolation
Decatur is less than an hour from Bloomington-Normal as well. I went to Decatur a number of times for work purposes (drove the two and a half hours from the Chicago area since it was quicker and more convenient than any air service). In this example, we also get corporate desires coming into play, since Decatur is headquarters of Archer Daniels Midland, a mammoth agri-company. They have a number of plants in Decatur manufacturing their products. The whole town stinks of soy processing.
Delta flies its premium guests to high-end destinations around the globe.
Mantis,
Recent elections where a plurality of voters supported the Democratic candidate, but the Republican candidate won the electoral vote is one datapoint. The distribution of electoral votes is profoundly undemocratic, with a Wyoming voter having more than 3x the influence as a California voter. The electoral college was a compromise, instituted at a time when the Founding Fathers could not anticipate that some states would have 100x the population of others, otherwise they would have done something different.
And while I understand your discomfort with a small majority imposing its will over a minority, you can surely see how it is far more frustrating to have a minority imposing its will through gerrymandering, court stuffing, and doing whatever it can to exert control over the majority.
Finally, it’s weird that you think the GOP is conservative. What is conservative about abandoning long-standing alliances that have kept the peace for over 70 years, and pandering to the Russians? What is conservative about telling women they have no say over whether they keep an unwanted fetus? You can’t really get more meddlesome than that.
I have lived in Southeast Alaska (inside passage) for fifty years. In the course of my business I would fly 20 times a year to Seattle. Yes I am an example and beneficiary of EAS. We do not have any federally funded highways connecting us to anywhere. We use to have a Marine Highway, but a three day travel time one way and a lack of service has made that impossible to use. So sure let’s tax everyone the real cost per mile of our road transportation system and we will have parity. Yes the program has been abused, but that is an argument for tighter regulation. Let’s realize we have a diverse large country and one size does not fit all.
I’d love to see a study on what the cost would be for bus service to a nearby int’l airport for places within 3 hours driving distance of one. My guess is it would be a small fraction of the price and still deliver 4-6 daily trips for less than the cost of 1-2 daily flights. Could also run it from the downtown area assuming TSA doesn’t want to set up security simply for a Landline-style bus service.
If only the PR Bacardi pork and the Alaskan bush village pork get together and get me, the lowly taxpayer, fun free fully liquored-up flights to the Alaskan bush in summer and Puerto Rican Beach in winter for some much-needed R&R vacation.
George,
the structure of the US government is based on ensuring that small city/small state issues are not overshadowed by large city/large city issues.
Other countries do not have such protections.
specific to this topic, Dave K’s point IS the point.
and we aren’t willing to hasten the urbanization of America by removing air service where it is needed to ensure smaller communities continue to exist and thrive.
there are alot of things related to the US government that we can complain about but small city air subsidies is not only financial inconsequential in comparison but it has far more logical justification than other money we as a country spend
“It is about moving mail, packages, and resources to these regions. Not everyone drives and it would cost more to deliver goods if not for these services. Passengers are not necessary but help pay for the transportation of goods.”
Um, NO. False. There is no cargo carried on any of these flights in the lower 48. Zero.
I agree with Tim Dunn on this. Overall this is not a costly program. The economic development that it provides, and access to lower fares, for small markets (not even counting those that don’t otherwise have a way of getting there like 1/3 of the program airports) is vital. I have to travel a lot to some of these markets. There’s a reason too that the program specifies the hub type that is in proximity. Using Gary’s example of Owensboro, KY (I’ve been there a half dozen times in the last 2 years, on Cape Air/Uber and Contour). Yeah, Evansville isn’t very far (and have driven by EVV when Cape Air used to cancel and Uber me to STL) but air service out of EVV isn’t great and is very high cost on average.
There are other markets where EAS has been a success and driven increases in traffic to the point that subsidies have drastically reduced or could possibly sustain service with no subsidy. But, without the start from EAS there would not have been that period to grow service.
Visalia, CA hasn’t had EAS flights for years, long long gone, last carrier was Great Lakes to LAX or LAS. Visalia transit’s V-LINE has 6x trips daily express bus from VIS to FAT for $10 per trip.
@George, the compromise solution would be to expand the House of Representatives. This would proportionately give less weight to the Electoral College votes pertaining to Senate seats. But really, you compare California to Wyoming, but how about comparing Texas to Delaware, or Florida to Rhode Island? It cuts both ways. You can’t change the Senate composition because it would require a two-thirds vote in both the House and the Senate, plus ratification by three-fourths of the states, which is impossible. You can, however, address the issue partway if you expand the House of Representatives ,which is long overdue anyway, considering the number of voters per Member.
But this issue isn’t really the reason for EAS. As Gary shows, there are plenty of airports in both red and blue states that have no business getting subsidies due to plenty of other flight options in reasonable driving distance. A total of 31 states have at least one airport with EAS eligibility (whether or not service is currently in place). And the original purpose of EAS to give places that are truly very distant from another airport a chance for some limited service was not without merit.
It’s time for EAS to go away and for the government to start taking intercity rail more seriously.
@Samus Aran intercity rail out of Thief River Falls, Minnesota and Laramie, Wyoming?
Scheduled intercity public transport system bus networks would be cheaper and more practical than intercity rail due to the way EAS-supported areas tend to be populated and how distributed work places, shopping places and housing tend to be. Easier and cheaper to have more “on demand” stops with scheduled intercity buses than with intercity rail and the expensive infrastructure with the roads is already there and has massive taxpayer support already.
I appreciate the intercity (and small town-serving) rail networks I encounter in, for example, Sweden, a country with close enough to the same population size and a similar population density to that of Minnesota+Wisconsin that I find it an apt comparison. But hving a Swedish-style intercity rail network just won’t work across Minnesota+Wisconsin because of how we traditionally sprawl in the US in ways that aren’t as applicable in Sweden.
An intercity bus network with cheap rentals of small, all-weather/rain-and-snow-sheltered automated vehicles for use at the main stops should be attempted first for a sustained period of time and then we can go from there to see where and how intercity rail would fly and combine comfortable intercity public transit buses with rail to do it on the relative cheap and generate increased demand and support for such public services over time.
Gary, in Sweden there were towns about the size of Thief River Falls that started to get rail service and some of them continue to have rail service. Not saying Thief River Falls needs the service, but there are places well off the beaten path and with comparable remoteness to large population centers that do maintain intercity public transit in Sweden. It works, if people want it to work.
Given how expensive cars are getting and the interest rates hitting car buyers, there should be more demand and economic viability for such services now than there was when gas was dirt cheap, car prices much lower and interest rates in this range or even lower.
i’m pro-EAS especially for places like the AK inner passage and inuit communities with no roads
intercity rail will reach glasgow montana when the regina spur of the calgary-denver line is built in 2100
@dunn “The other side of small city subsidies is that deregulation of the airline industry has resulted in more competition and better pricing for large cities.”
Don’t bogart that joint, my friend, pass it over to me.