DOT Prepared to Strip Small Airport Subsidies

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By Stephanie Beasley

Aug. 2 — Thirty remote U.S. airports have failed to meet the standards that allow them to receive funding for air carrier service under a federal program exclusive to small, far-flung facilities.

More than half of the group of Essential Air Service (EAS) airports is at risk of being dropped from the program entirely.

EAS, established in the 1970s, provides federal assistance to small communities adapting to airline deregulation. The Department of Transportation subsidizes more than $200 per passenger for communities within the continental U.S. located more than 210 miles from the nearest hub. However, in recent years the program has earned the ire of some lawmakers who view evidence of unfilled planes and underuse of some EAS airports as proof that the program should be cut (56 DER A-15, 3/24/15).

The FAA Modernization and Reform Act of 2012 required the DOT to notify airports that failed to meet EAS requirements for fiscal year 2015 that their subsidies would be terminated. On May 20, the agency released an order notifying 30 airports that they no longer qualified.

The DOT’s decision to terminate an airport’s EAS subsidies does not mean the airport would be required to end air carrier service, a department spokeswoman said.

Applying for Waivers

Eight airports were given waivers because they had been without an air carrier for extended periods of time. Among those waived was Middle Georgia Regional Airport in Macon, Ga., which flew a total of 188 passengers at $1,031 per person in the one month that it had an air carrier in fiscal year 2015.

The remaining 22 airports were required to submit formal objections describing their intent to apply for a waiver, DOT said. Some lawmakers jumped in to help them plead their cases.

small airports
Lawmakers Intercede

Sen. Michael Bennet (D-Colo.) wrote in on behalf of Alamosa, Colo., another airport on the list, to say that maintaining EAS service was critical to the community's ability to attract business travelers and tourists that sustain their local economy.

“While I support efforts by Congress and the Department of Transportation to streamline EAS and increase the program's efficiency. I urge you to reconsider the basis for finding [Alamosa] ineligible,” he said.

Alamosa's business leaders also raised protests, saying that after a number of years of inconsistent service from Great Lakes Airlines Ltd., Alamosa also should receive a waiver. A call to the airline's press office seeking comment wasn't immediately returned Aug. 2.

“We may not have had a hiatus, but we certainly compare in numbers of flights serviced,” Randy Wright, executive director of Alamosa County Economic Development Corporation and the Alamosa County Chamber of Commerce wrote in a May 27 letter.

Wright said Alamosa was planning to partner with Boutique Air to reinstate air service at Alamosa's San Luis Valley Regional Airport. Without a subsidy, it wouldn't be worthwhile for a supplier to maintain service in Alamosa, he said.

DOT Methods Questioned

Pendleton, Ore., took another tactic. It challenged the DOT's methodologies for calculating distance. Pendleton was within the range of EAS subsidy spending requirements at $213 per passenger, but DOT said that, according to its calculations, the city was 203 miles from Portland International Airport—short of the required distance to the nearest hub.

Pendleton is serviced by SeaPort Airlines, which joined the city in objecting to the DOT's decision. The agency's mileage calculation, based on the shortest driving distance, would only take passengers to the property line of the Portland airport, not the terminal, they said. The Oregon Department of Transportation calculated the full distance at 211.08 miles.

Two of the state's U.S. senators concurred with the argument.

“Pendleton's closest large or medium hub airport requires over a three hour drive to Portland International Airport (PDX) in western Oregon,” Sens. Ron Wyden (D-Ore.) and Jeff Merkley (D-Ore.) wrote in a June 10 letter. “Driving to or from the Portland hub is simply not a reasonable alternative for air travelers.”

In a separate letter, Rep. Greg Walden (R-Ore.) also urged the DOT to reevaluate its tentative decision to terminate EAS service at Pendleton.

EAS Cuts Hits Thune's State

Watertown, S.D., was also among communities slated to lose EAS subsidies. The city recently applied for additional funding under DOT's Small Community Air Service Development grant program. That effort was supported by Senate Commerce Science and Transportation Committee Chairman John Thune (R-S.D.). He wrote to the DOT in April saying that, because the Watertown Regional Airport had been without a carrier since September 2015, it should receive federal assistance. The Watertown airport spent $910 in subsidies per passenger in fiscal year 2015.

An aide for the Senate Commerce Committee said Thune had not sent a letter objecting to DOT's notice of termination for Watertown.

Next Steps

When Congress extended the Federal Aviation Administration's spending authority in July, it included a provision that would require the Transportation Department to convene a working group to identify challenges to establishing and maintaining air service in small communities and also to develop recommendations for improving those services (See previous story, 07/14/16).

Otherwise Congress was relatively mum on EAS during negotiations of the FAA extension, which will last through September 2017.

The EAS termination waivers are part of the process set out in the last FAA reauthorization and left to the discretion of the transportation secretary, an aide for the House Transportation and Infrastructure Committee told Bloomberg BNA.

DOT gave communities 20 days to respond to the termination order it issued in May. The agency is now planning to move to the next phase of the process—waiver applications.

“We haven't issued waiver procedures, but we plan to very soon,” a DOT spokeswoman told Bloomberg BNA. “A due date for waiver petitions will be in that order.”

To contact the reporter on this story: Stephanie Beasley in Washington sbeasley@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com

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