Smaller airports have come to rely on federal subsidies

WASHINGTON — Community and rural commercial airports that service dozens, as opposed to thousands, of passengers have come to rely on federal subsidy programs to keep them loading and unloading each week.

Now, with the nation facing a $14.3 trillion debt, budget cutters are peering longingly at the funds that keep facilities such as Garden City Regional Airport in Kan., and L.M. Clayton Airport in Wolf Point, Mont., operating.

Some of the federal subsidies amount to hundreds of dollars per ticket at small airports that are less than two hours away from a major hub.

Hagerstown, Md., barely an hour and a half drive from either Washington or Baltimore, maintains a per ticket subsidy of $191. The U.S. Department of Transportation estimates the subsidy provided to the air field in Jonesboro, Ark., comes to $840 per ticket. Jonesboro is 79 miles from Nashville, Tenn.

Small commercial airports have received various forms of federal aid since airline deregulation in 1978, a congressional move that eliminated a requirement that air carriers serve rural communities. The Airline Deregulation Act removed government control over fares, routes and the ability to block airlines from entering new markets, engendering concern that carriers would shift operations to more lucrative markets and render small markets underserved.

So the federal government has adopted programs to aid small airports. Congress, as part of the Airline Deregulation Act, included a provision known as the Essential Air Service program (EAS) that provides subsidies for airlines that serve rural communities that otherwise could not maintain air service.

Communities located more than 70 driving miles from a large or medium hub airport are eligible for subsidized air service as long as per passenger subsidies don't exceed $200. Communities located 210 or more highway miles from a medium or large hub airport — primarily facilities located in the West or Alaska — are exempt from the subsidy cap.

There are no EAS airports in Indiana. There are two nearby in Kentucky — the Owensboro-Daviess County Regional Airport, serviced by KentuckySkies with a subsidy of $1.069 million per year and the Barkley Regional Airport in Paducah, serviced by United Express at a subsidized level of $569,932.

EAS is not the only program keeping small airports afloat. In 1982, at the behest of former Sen. Wendell Ford, D-Ky., of Owensboro, lawmakers adopted the Airport Improvement Program (AIP), which provides funds to small airports that don't have ready access to private capital markets.

The money goes to pay for infrastructure projects such as runways, taxiways, ramps, lighting, signage, weather stations, as well as land acquisition and some areas of planning. The money is raised through taxes on airplane tickets and a tax on aviation fuel.

The U.S. Department of Transportation also administers the Small Community Air Service Development Program, which recently gave $500,000 to the Evansville Regional Airport to help it land additional airlines. Evansville was one of 29 communities to receive a total of $15 million. Transportation Secretary Ray LaHood said the grants will help communities improve air service and provide more travel options.

All of these programs, particularly the Essential Air Service program, make it possible for small, far-flung communities to maintain access to commercial airlines. Of the 435 commercial airports in the U.S. outside of Alaska and Hawaii, according to the Regional Airline Association, 106 — almost one-fourth — receive air service solely as a result of the Essential Air Service program, and they likely would close without the assistance.

The loss of so many airports would carry a substantial impact on the 10.9 million jobs and 750 million passengers serviced by the air transport sector.

But the nation's economic woes and soaring debt have placed airline subsidies squarely in the crosshairs of congressional budget-cutters. House Republicans, led by Rep. John Mica, R-Fla., chairman of the House Transportation and Infrastructure Committee, are moving to eliminate EAS at a potential savings of $200 million annually. Lawmakers are also looking to cut into AIP, which hasn't seen a funding increase since 2006. The committee wants to cut that program to $3.176 billion per year — $500 million less than the current appropriated level.

Airports Council International — North America President Greg Principato said the industry is "gravely concerned'' about the proposed AIP cuts that will "negatively impact airport safety projects and job creation.''

"It simply doesn't make any sense at a time when both parties are focused on creating jobs to cut a program like AIP that is a proven jobs creator in large and small communities across the country,'' he said.

The austerity push helped create yet another chasm between the House and Senate, resulting in a temporary shutdown of the Federal Aviation Administration when the two sides failed to reach an agreement on reauthorizing the agency.

A majority of the Senate, including some Republicans from Western states, opposed eliminating the EAS. The two sides ultimately agreed on a stopgap funding measure that keeps the program operating. But it only runs until February when the subsidy issue is almost sure to rise again.A coalition of aviation organizations, including the Airports Council International — North America, the American Association of Airport Executives, the National Association of Aviation Officials and the Regional Airline Association sent a joint letter to lawmakers imploring them to maintain the program, asserting that small communities "do not rely any less on commercial air service than they did in 1978, when Congress promised them airline deregulation would not disconnect them from the nation's air transportation network.''

"Cutting Essential Air Service would serve as a deathblow to the economic health of hundreds of small communities across the nation,'' the letter said. "It is unimaginable that a business would start up in, or relocate to a community where the closest commercial airport is located over two, four, six, or even eight hours away. The loss of commercial air service at these communities would likewise crush existing businesses and would cause even greater numbers of doctors and other skilled professionals — already in short supply in rural areas — to migrate to less isolated communities.''

Sen. Bob Casey, D-Pa., and three other Democratic senators asserted that eliminating the program "will have a devastating impact on the economies of rural communities.''

"At a moment when the nation's economic recovery is starting to gain momentum, it makes little sense to reduce personal and business travel volume by cutting off residents of rural areas,'' the lawmakers said in a letter to Sen. John McCain, R-Ariz., who led the fight to eliminate EAS. "And at a time when jobs are already so hard to come by in our rural communities, it makes even less sense to enact cuts that will only make the problem worse.''

But McCain and other insist subsiding small airports is expensive and a waste of federal dollars. Thomas Schatz, president of the Council for Citizens Against Public Waste, noted that the original funding for EAS came to $7 million. It now costs taxpayers $200 million annually.

"Ironically, this air service program is anything but essential, as 99.95 percent of Americans live within 120 miles of a public airport that accommodates more than 10,000 takeoffs and landings each year,'' Schatz said. "CCAGW has been a longtime proponent of eliminating funding for worthless, money-draining airports that have long been protected under the Essential Air Service.''

Pete Sepp, executive vice president of the National Taxpayers Union, noted that EAS initially was scheduled to last only 10 years to "ease the transition to a more market-driven commercial aviation sector.''

"EAS has, like many other federal programs, engendered constituencies that have kept the program alive far beyond any demonstrable purpose,'' Sepp said. He added that creation of the program was dubious from the start, insisting that "robust and competitive air services would fulfill consumers' needs more efficiently than any government subsidization scheme.''

Critics cite several wasteful expenditures in the subsidy program. The John Murtha Johnstown-Cambria Airport — dubbed the "Airport for No One" — services fewer than 30 people per day, yet it has received more than $1.3 million under this program.

Sen. Tom Coburn, R-Oklah., another critic, noted that the cities of Macon and Athens, Ga., are both less than a 90-minute drive from Hartsfield-Jackson International Airport in Atlanta yet the U.S. Department of Transportation subsidized 26 flights per week to and from each city to Atlanta at a clip of $464 per passenger for Macon and $135 for Athens. Passengers pay $39 each for a seat on the 50-minute flight.

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