Why the Best Small Community Airport Subsidies Reveal We Should Shut Down that Program

Today Cranky Flier takes up the task of defending the undefendable — highlighting ‘worthy’ investments this year by the federal government’s Small Community Air Service Development grants.

There were 61 applications from communities for money from the government, 33 were funded (“because the ones who know about the programs are the ones that get the money!!” said the late night infomercial…).

Cranky highlights five and declares, “That’s it for my favorites.” Not a good ratio or one that the program can be proud of. And he promises that tomorrow we’ll hear about the silliest winners.

But I wouldn’t even come close to giving him his wins for the program. They’re wasteful and silly.  Here’s Cranky on giving Los Alamos, New Mexico (9) flights a day to Albuquerque.

The Los Alamos Shuttle
Lastly, there were a couple of quirky grants that I just can’t help but like for their creativity. One was from Los Alamos, New Mexico. The government-run Los Alamos National Laboratory has some of the smartest scientific minds in the world. They are two hours away from Albuquerque’s airport, but I’d rather have them spending more time on important work than on driving back and forth to an airport.

It’s not like the scientists in town chose to live there – that’s where the feds put the lab. To me, this really should be an Essential Air Service route, but for various reasons (as detailed in the application), it’s not eligible. So for lack of a better option, SCASD it is. They want 9 flights a day to Albuquerque. Normally I’d think that’s crazy, but in this special case, it seems like a good idea to make them as productive as possible.

Great, we like scientists.

But here’s the flights we’re subsidizing:

Drive, right?

Cranky says, “It’s not like the scientists in town chose to live there” but of course they did. It’s not like the scientists are members of the military, or are indentured servants. They took the jobs voluntarily, and are paid handsomely in a part of the country with low cost of living.

The service itself is silly. The application notes that service has never worked here.

  • Peacock Airlines “only survived a few weeks.”

  • Mesa Airlines “lasted four months.” Why? Because it wasn’t convenient, and it was expensive compared to other options. Like driving to Albuquerque. How expensive is ‘too expensive’ for passengers to choose to fly? The application notes that you could fly Mesa for $69. But customers didn’t find it worthwhile to pay more.

  • Then Rio Grande Airlines tried Albuquerque service for four months and failed in 2002.

But if we just tried it one more time it would work! The application claims that if there were cheap, frequent flights on an airline that had interline agreements it would work.

But why assume that the airlines don’t want easy profits that are theirs for the taking? Because it doesn’t work to offer 9 flights a day to shuttle people 61 miles when they’ve made clear they won’t spend $69 for the privilege (and another carrier trying the route charged less than half that and failed). Clearly what we need is to double the flights, lower the cost, and the underpants gnomes will generate a profit!

But even if this were true, should the federal government be subsidizing it?

I think this claim from the application is really important:

The median household income of Los Alamos County is $103,643. This compares to the national average of $46,326 and the New Mexico average of $43,000.

Make no mistake: people making $43,000 per year are being asked to subsidize more convenient air travel for people making $103,000 a year. That’s what bothers me here. Los Alamos residents can drive to Albuquerque. But so they don’t have to do that, for their convenience (that past behavior suggests they don’t value very much), poorer people are being asked to dig deep.

And this is one of the 5 best investments out of 33 that Cranky Flier can come up with for the program.

More than any of the silly examples he points out tomorrow, the absurdity of the ‘best’ examples strike me as reason enough to end this program.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. If you compliant about this, you should also take a look at the money given to the small airports from the federal government for operation and construction…….

    Too many special interests….. For one, I don’t want to pay extra fees in top of my $6+/gallon 100LL.;-)

  2. The last three articles on View from the Wing have been on government waste, government waste and My Back Pages.

    Somewhere out there is a young, hungry mind, digging for an edge in the travel genre that he or she can share with readers.

  3. Not only that, but ABQ isn’t really a hub for anyone. WN is the largest carrier but they offer 1-2 flights/day on most routes, and only serve a few cities. To go anywhere else means passengers have to double connect. If they really wanted to provide meaningful service, they should fly to DEN instead.

    But overall the EAS program is a totat waste. If there is a meaningful airport within 150 driving miles, EAS should not apply. Not just a “hub” but a meaningful market-supported airport. Otherwise EAS just drains traffic from the meaningful airport. And 150 driving miles can be done by a rental car or shutttle service with equal convenience.

  4. Your logic is sound, but I accept the premise of Cranky, and the conclusion I derive is instead that implementation is flawed. There is not value in an air shuttle service to ABQ, but there is value to hubs. If Los Alamos is worth upgrading, it’s worth upgrading to get to PHX, LAX, or SLC. Nevermind your nonsense about the poor paying for rich, that’s a bit sensational and not exactly true.

  5. This assessment while on the surface I would agree, does not take into account the perceived importance of that lab and those scientists to our nation by those writing the checks.

  6. Ed: How is it not true? The program is funded with taxpayer dollars, correct? Everyone who pays taxes is chipping in. What is the median income for a US taxpayer?

  7. Up front, I will say I don’t think it is worth it to put flights between Los Alamos and ABQ. However, to be fair, you can’t drive in a straight line to get to Albuquerque, you have to go through Santa Fe, so the total driving distance ends up being closer to 100 miles.

  8. I’m a little confused, Gary. It sounds like you think this program should be shut down because you think one of the ones that I say is the “best” this year isn’t worthy? It’s fine if you want to disagree with what I pick as the best, but that doesn’t mean there aren’t others you might find to be more worthwhile. Have you read through all the applications to judge for yourself?

    On Los Alamos, it is not a 61 mile drive but rather 100 miles since you can’t go in a straight line. You’re looking at around 2 hours to get to ABQ. As you point out, the salaries are high in that area. And because of that, I want these people (there at 9,000 employees at the lab) working as much as possible and not wasting our tax dollars by driving for two hours to be able to fly somewhere. I don’t think this is the right fit for SCASD, but I do think it should be funded somehow.

    While I’ve been plenty critical of the EAS program, I find SCASD to be very worthwhile. It is a tiny program – only $14 million this year – and it has had successes. Essential Air Service is the one that needs massive changes, but this one is a much better way to encourage small city service.

  9. Also, just to point out, Santa Fe airport (a 36 mile drive from Los Alamos) has American Eagle service to DFW and LAX. This seems more useful than a short flight to ABQ.

  10. Gary, I agree that the EAS involves a significant subsidy to a limited, relatively wealthy class. I have, however, wondered if the building, financing, and operation of ALL airports may involve a subsidy to the upper middle class. I dunno all of the economics, but airport use fees strike me as terribly low and fail to capture the per-use cost of airports. Of course, I enjoy having my jet set lifestyle subsidized by others, but it is likely more appropriate for me to shoulder the cost of airport usage. Can you advise if actual fees or some portion of my airfares reasonably captures the cost of building and operating an aitport?

  11. I don’t understand why any of these things needs to be federal government subsidized. If the community values the airport and needs some marketing – then have the community fund it or fund it out of fees. If there’s not return on the investment, don’t do it.

    Isn’t this a perfect example of something the federal government doesn’t need to be involved in?

  12. @Pointhound Unfortubately thats not how taxes work 🙂 people making less money pay less in taxes. That’s called progressive taxation. Top 10% pay 75% of all income tax, and that’s people making over $100K, the Los alamos average. Bottom 50% pays 2.5% of all US income tax.

    But don’t get me wrong I think that’s exactly how it should be, if not skewed even higher towards top earners. And I still think this is a stupid waste 😛

  13. Has anyone considered the impact of official travel to/from LAM? If there are gov’t travelers that need access to the lab, I don’t want them to be waste their big brains/gov’t travel dollars on a rental car for a few hours to ABQ.

    Further, if I had one of those big brains + a family, I wouldn’t want to move my to an isolated hole in NM without a reasonable way out. $100k is no good if you can’t spend it. As a taxpayer, I want the best minds in America to want to be there.

  14. Ari is right, in that the employees at LANL probably travel quite a bit to and from their site for experiments and conferences, and military officials and funding agencies come in for site visits and seminars.

    Increasing frequency can actually increase demand as well. When you have one or two flights a day, people aren’t willing to change their schedule around for the flight; when you have 5 or 6 a day, the flights fit into their schedule. I would agree that service to ABQ isn’t too useful, though. Flying into DEN, LAX, and DFW would probably be a much better set of solutions.

  15. Reposting part of a comment I put on Cranky: Part of the argument in the Los Alamos application is that the subsidy will save the Federal Government money: many of the prospective users are traveling on government business, and the cost of subsidizing regular service is lower than the cost of the incremental travel expenses incurred by the absence of regular service (such as extra nights on the road). If the numbers work out, then this is an argument for a permanent subsidy — not an EAS type quality-of-life subsidy, but rather a way to reallocate Federal travel dollars with an overall saving to taxpayers.

  16. @ Ron- to the extent this is the case, I would suggest having the Los Alamos lab’s budget pay all or a significant part of the subsidy. This would make the effective cost operating the lab in that location more transparent.

  17. @ jfhscott — According to the application, this was exactly the case until the early 1990s, when “financial considerations prompted the Department of Energy to reduce financial support”.

  18. @ Ron – its obviously not your fault (unless it was your decision in the 1990s), and your comment is interesting and helpful. I submit that if DOE’s financial considerations prompted a a reduction in financial support, no other funds should be tapped for the subsidy.

  19. @ jfhscott — unless, of course, travelers come from a variety of Federal agencies. If DOE accounts for, say, 70% of government travelers to and from LANL (just throwing an arbitrary number), then it may not be in the interest of any single department or program to subsidize the flights, yet there might not be an easy way to jointly finance this. Again, all speculation — I don’t know how the numbers actually work out.

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