Cutting EAS?

[TallFlyer]

]Rural air subsidies test resolve to cut spending

By JOAN LOWY
The Associated Press
Thursday, February 3, 2011; 3:33 PM

WASHINGTON -- A senator who is a key figure in aviation issues vowed Thursday to fight off an attempt to eliminate a program that subsidizes air service to small airports, often in remote communities.

The proposal is shaping up as an early test in the new Congress of conservatives' zeal for shrinking the federal government.

Senate Commerce, Science and Transportation Committee Chairman Jay Rockefeller said the proposal to eliminate the $200 million essential air service program is a "nonstarter." He is the chief sponsor of a bill to authorize Federal Aviation Administration programs for the next two years that opponents are trying to amend to eliminate the air service subsidies.

"It makes no sense to choke off rural residents' access to air travel and their connection to jobs and family," the West Virginia Democrat said in a statement. "I will fight tooth and nail against any proposal to eliminate or cut funding for this critical program."

The program pays airlines to provide scheduled service to about 150 communities, from Muscle Shoals, Ala., to Pelican, Alaska. There are five airports in West Virginia with subsidized service.

"I think it will be a test of the willingness to cut spending," said Sen. John McCain, R-Ariz., who proposed the amendment.

In the House, the Republican Study Committee - a group of conservative lawmakers - has also proposed killing the program.
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But several conservative senators from rural states declined to discuss McCain's amendment when approached by The Associated Press.

"I'll have to see it first. I haven't seen the amendment," said Sen. John Barrasso, R-Wyo. Two communities in Wyoming - Laramie and Worland - receive subsidized service, according to the Transportation Department.

"I just don't know about that," echoed Sen. Orrin Hatch, R-Utah. Three communities in Utah - Moab, Vernal and Cedar City - receive subsidized service

The program was created to ensure that less-profitable routes to small airports wouldn't be eliminated when airline service was deregulated in 1978. Subsidies per airline passenger as of June 1, 2010, ranged as high as $5,223 in Ely, Nev., to as low as $9.21 in Thief River Falls, Minn., according to Transportation Department data for the lower 48 states.

But critics say the airports often serve too few people to merit the amount of money spent in subsidies. Urban growth over the past three decades has also placed transportation alternatives - other airports, trains and bus service - within a reasonable distance of some communities receiving subsidies.

Studies show that in a lot of those communities people drive to larger airports to get better service at a lower cost than they can get at the smaller airport, even with subsidized air service, said Severin Borenstein, a University of California-Berkeley business professor who is an expert on airline competition.

"Some communities can make a credible claim they need the service, particularly in Alaska, but I think those are a relatively small part of the program," he said.

A 2009 Government Accountability report said demographic shifts were also depopulating some of the communities served by program. As a result, the reports said, that on average just over a third of the seats were filled on subsidized flights. For commercial flights nationwide, the average was about 80 percent.

The program has been remarkably resilient, partly due to the protection it receives from lawmakers from rural states and districts. It has been proposed for cuts or elimination many times over the years, but continues to grow.

"It's exactly in the political sweet spot," Borenstein said. Lawmakers don't feel it's worth upsetting the few people the program serves to achieve what amounts to a modest savings in federal budget terms, he said.

Supporters say the small airports and their air service are important to the communities' ability to attract investment and jobs. The Obama administration sought an increase in the program last year.

Four Democratic senators - Mark Begich of Alaska, Ben Nelson of Nebraska, Robert Casey of Pennsylvania and Joe Manchin of West Virginia - sent a letter to McCain Thursday urging him to give up his attempt to kill the program.

"Eliminating the program will have a devastating impact on the economies of rural communities," their letter says.

"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 letter says.

The pending aviation bill would give the Transportation Department more flexibility in structuring contracts with airlines to improve the air subsidies program. It would also let the Transportation Department adjust contracts to take into account rising fuel costs.

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Online:

Government Accountability Office -http://www.gao.gov/new.items/d09753.pdf

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Online:

http://www.gao.gov/new.items/d09753.pdf

Link

I'm not impressed, primarily because until they take a serious look at mandatory spending none of the rest of this matters.

[YT]Yk_jToBbpWU[/YT]

 

[WalterSobchak]

[YT]Yk_jToBbpWU[/YT]

Gotta love scale put in perspective. :clap:

 

[BravoHotel]

Bravo. Isn't destroying a penny a federal offense? There is probably going to be a 100 million dollar probe launched to discover who cut that penny!

 

[Minuteman]

Bravo. Isn't destroying a penny a federal offense?

It was probably one of those Canadian pennies. He was defending 'murica!

It's my understanding that the portion on the left is more-or-less a fixed quantity (not a fixed percentage). So, ya gotta either inflate like a Minuteman over the holidays, or increase the revenues.

 

[flyingmaniac]

Great example. But somebody has to start somewhere or we'll get nowhere really fast!

 

[BravoHotel]

So, ya gotta either inflate like a Minuteman over the holidays, or increase the revenues.

Am I missing something regarding what a minutemen is? If I remember history class, they were usually part of the militia who would quickly respond to a call to arms during the revolutionary war, as if the red coats were coming...like a Quick Reaction Force or a QRF?

 

[Minuteman]

Sure, it could be a revolutionary war soldier, an intercontinental ballistic missile, a fat person on the Arizona border, someone with a shameful endurance for the sexing, or maybe a guy who goes on a 5,000 calorie/day diet from Thanksgiving through the New Year.

 

[TallFlyer]

So which one are you?

 

[Roger, Roger]

I'm split on this one. The conservative/constitutionalist in me says if the market can't support air service, then, well, they shouldn't have air service! But, part of me recognizes that my company (and quite a few others in my chosen line of work) make a good bit of money off EAS and if it were to go bye-bye, there would be a lot of people out of work. I guess overall the "screw everyone else to keep a roof over my head" line of thought is still pretty powerful.

 

[MikeD]

I'm split on this one. The conservative/constitutionalist in me says if the market can't support air service, then, well, they shouldn't have air service! But, part of me recognizes that my company (and quite a few others in my chosen line of work) make a good bit of money off EAS and if it were to go bye-bye, there would be a lot of people out of work. I guess overall the "screw everyone else to keep a roof over my head" line of thought is still pretty powerful.

There is alot of waste in some EAS routes that don't really justify the need for air service, or don't justify it anymore. Your last sentence is an honest indicator of why some many want to keep it around. I don't think its bad per se, but it needs to have an audit to see if everywhere that EAS serves, still truly needs the service today.

 

[A150K]

There is alot of waste in some EAS routes that don't really justify the need for air service, or don't justify it anymore. Your last sentence is an honest indicator of why some many want to keep it around. I don't think its bad per se, but it needs to have an audit to see if everywhere that EAS serves, still truly needs the service today.

An audit of federal expenditures? What a Concept . My opinion on EAS is that it needs better oversight, but it shouldn't completely go away. Just look at how much Alaska relies on it. I also think the airlines should be held accountable for controlling costs as well. My buddy told me that PW (NM airlines) recently ran an ABQ- CNM (Carlsbad)-ABQ roundtrip with one passenger each way, but still got paid for all nine seats (as per the contract). This should not be allowed to occur with our money.

 

[TallFlyer]

I'm split on this one. The conservative/constitutionalist in me says if the market can't support air service, then, well, they shouldn't have air service! But, part of me recognizes that my company (and quite a few others in my chosen line of work) make a good bit of money off EAS and if it were to go bye-bye, there would be a lot of people out of work. I guess overall the "screw everyone else to keep a roof over my head" line of thought is still pretty powerful.

If the subsidy to Gustavus went away your company would be a LOT busier in the summer. If Wrangel and Petersburg went away you could be even busier still, with a few more airplanes to boot. The only communities that would suffer if EAS disappeared in SE would be all the AK Seaplanes destinations.

I also realize you're talking about the industry as a whole and not just SE AK.....

 

[mshunter]

An audit of federal expenditures? What a Concept . My opinion on EAS is that it needs better oversight, but it shouldn't completely go away. Just look at how much Alaska relies on it. I also think the airlines should be held accountable for controlling costs as well. My buddy told me that PW (NM airlines) recently ran an ABQ- CNM (Carlsbad)-ABQ roundtrip with one passenger each way, but still got paid for all nine seats (as per the contract). This should not be allowed to occur with our money.

I could see them doing it for free for the 1 pax, or even paying for that pax's ticket, so the could get the money for the rest of the seats.

 

[fly02]

Here is an example of waste. EAS service to Decatur, Il. This city is a 50 minute drive from SPI which is serviced by two airlines. It is a 2.5 hour drive from from STL. There are nine EAS departures tomorrow at DEC. How is this worth our taxpayer dollars?

 

[A150K]

Here is an example of waste. EAS service to Decatur, Il. This city is a 50 minute drive from SPI which is serviced by two airlines. It is a 2.5 hour drive from from STL. There are nine EAS departures tomorrow at DEC. How is this worth our taxpayer dollars?

And plus, people would want to get out of DEC so bad that they would be willing to drive to STL to get on a flight anyway, so no EAS service necessary . DEC kind of compares to SKX ( TAOS, NM). A 90 minute drive to SAF with Eagle flights to DFW and LAX and about a 2.5 hour drive to ABQ int'l. Yet no EAS service (not 139 certified for one, but the last airline that tried to serve SKX did bad enough that even the gov't wouldn't subsidize them if the airport became 139'ed).Though, how this airline (no longer around) served Taos even with it's lack of 139 cerftification is beyond me.

 

[ppragman]

If the subsidy to Gustavus went away your company would be a LOT busier in the summer. If Wrangel and Petersburg went away you could be even busier still, with a few more airplanes to boot. The only communities that would suffer if EAS disappeared in SE would be all the AK Seaplanes destinations.

I also realize you're talking about the industry as a whole and not just SE AK.....

There's a lot more communities than that.
http://en.wikipedia.org/wiki/Essential_Air_Service#Alaska

You've gotta figure that subsidies to some of these communities are what are keeping ticket prices and freight prices affordable for many people. A lot of these people can't afford a charter. Even WRG and PSG which don't really need "jetttttttttttt" service would almost certainly see an increase in ticket prices if EAS were gone. Now, there'd be a few winners if EAS went away and Alaska pulled out of South East. If that happened, Wings and Air Ex out of Juneau would be busy as hell, but I don't think that killing EAS would keep Alaska out of the game, certainly they'd reduce frequency, but the jet would still go. There'd be some increase in revenue for the local operators, but I don't think it would be substantial.

Also, Air Ex has the EAS to Kake last I heard, so they'd lose out too now.

 

[ASpilot2be]

Also, Air Ex has the EAS to Kake last I heard, so they'd lose out too now.

According to something I just read it is Wings with the 208.

 

[ChasenSFO]

I'm all for EAS...mostly. I think that the list should be looked at, meaning let's see what airports really need the service and what don't as many are within an hours drive of another airport with airline service. It's easy to say "Screw Merced, they don't need a 1900 to take them to Vegas!". Then again, how many of us have had to drive from Merced to Stockton to catch an Allegiant flight that only operates 3 days a week? It would be a major pain. A lot of the airports on the list in fact, are no where near other airports with 121 service. Especially many out in the deserts of the Southwest. Cutting all that service can't be good for the community, and won't help air travel as a plane with 19-30 seats is better off flying EAS routes then flooding a route already filled with RJs.

 

[Nark]

According to something I just read it is Wings with the 208.

Nope, air ex. Wings lost it last fall. (Bidding)

EAS should go away. Let the market dictate service.

 

[ppragman]

Nope, air ex. Wings lost it last fall. (Bidding)

EAS should go away. Let the market dictate service.

You really think that anyone would go to Circle or - and here's the really good one - Nikolski if it weren't subsidized? The market wouldn't have service, that's why they put EAS together in the first place. The market will not allow some of these communities to have service were it not for EAS, or mail. The process needs overhaul, but I think there is a place for it. Funter Bay doesn't need an EAS route (sorry Ward Air), neither does Uganic Cannery, and other places could use more service but aren't EAS routes. That said, I can't think of any valid reason to even ever go to Karluk or some of the others on a regular basis except for a subsidized route. The market would abandon these communities.