INSIDE WASHINGTON: Rural air subsidy costs spiral
WASHINGTON - Government subsidies for flights in and out of rural
communities can reach up to thousands of dollars per passenger, and Congress
is moving to increase the budget by almost 30 percent to keep those flights
going next year.
Some of the subsidies, to places like Ely, Nev., Cape Girardeau, Mo., and
Havre, Mont., are eye-popping.
Ely, in Democratic Senate Majority Leader Harry Reid's state, leads the pack
with a $4,500 per passenger subsidy, according to new data from the Senate
Appropriations Committee. Just 414 people flew out of Ely last year. That's
0.7 passengers per flight, which means that some planes fly empty of
passengers.
For Havre, each of its 359 passengers - 0.6 passengers per flight - received
an almost $2,900 subsidy. Double it for a round trip ticket.
No matter. On Thursday, the Senate Appropriations Committee approved $175
million for the program, a $39 million increase from current funding.
Congress initially provided $123 million in rural air subsidies this year,
then added $13 million more as costs spiraled.
The committee warns it really has no idea what the true cost of the program
will be this year, so it gave Transportation Secretary Ray LaHood power to
shift money out of other programs to make sure the subsidies keep flowing.
Reforms promised by the Obama administration have yet to arrive, but there
doesn't seem to be any sense of urgency to fix the situation, either within
the administration or on Capitol Hill.
The troubled Essential Air Service program is a product of deregulating the
airlines during Jimmy Carter's presidency. It was established to guarantee
that small communities would continue to get commercial air services even
though the routes were no longer profitable after deregulation.
Presidents from Ronald Reagan to George W. Bush sought unsuccessfully to cut
the subsidies that keep flights going to 107 communities in 32 states in the
continental U.S. and Puerto Rico and 45 tiny towns in Alaska, according to
the most recent reports. Subsidies are greatest for airports that are more
than 210 miles from regional hubs. Communities within 70 driving miles of a
hub airport are ineligible.
The budget for the program has bounced around. In the 2001 budget year, it
was $50 million, but after the Sept. 11, 2001, terrorist attacks, airlines
pulled out of smaller unsubsidized markets, leading more cities to require
taxpayer subsidies to keep their flights.
The major airlines have pulled out of the program, leaving smaller, often
financially troubled airlines to serve the subsidized communities. In many
instances, the small airlines don't have ticketing and baggage agreements
with larger carriers, which means people have to claim their bags and
re-check them before flying on. Facing that, many people would rather drive
to a larger hub than, for example, fly from Macon, Ga., to Atlanta.
There are also fewer and fewer 19-seat airplanes in operation as many
airlines turn to more cost-efficient 30-seat planes. But many small
communities can't support the larger planes and are being left without air
service
The Bush administration tried to cut the subsidies and focus them on the
most isolated communities, but the plan went nowhere in Congress.
The program enjoys strong support among lawmakers. In April, 22 senators
wrote White House budget director Peter Orszag to demand more money for it.
"Simply put, the Essential Air Service program was a promise made to rural
America, and a promise that must be kept," the senators wrote.
Support is particularly strong in the Senate, where rural states have
disproportionate strength. "It's a program that is very popular for
communities that have very few ways to get in and out of," said Sen. Patty
Murray, D-Wash., who chairs the Appropriations Committee's transportation
subcommittee.
"The Essential Air Service program - half of it is essential, the other half
is just a boondoggle, just a giant waste of money," said aviation consultant
Michael Boyd of Boyd Group Intl. "Paying an airplane to fly from Pueblo,
Colorado to Denver when people can drive 45 minutes to a bigger airport,
that's political pork."
Just 10 people a day - with a per-leg subsidy of $318 - fly out of Augusta,
Maine. Augusta is located about an hour's drive from Portland, which offers
far lower fares.
Flights out of Lebanon, N.H., receive a $137 per passenger subsidy.
Nonetheless, the state's Republican senator, Judd Gregg, calls the program
"a massive waste of money."
LaHood told lawmakers earlier this year that the program should be updated
and made more cost effective to "provide better value for passengers and the
American taxpayer."
Pressure on the program keeps building as more and more airlines pull out of
cities that don't currently have subsidies. Government subsidies often are
needed to get service back.
For example, earlier this month, Mesaba Airlines, a subsidiary of Delta Air
Lines, served notice it is ceasing flights to eight cities, including
Tupelo, Miss.; Paducah, Ky.; and Eau Claire, Wis. The airline hopes to
continue with subsidized service.
Supporters of the program claim it's essential to attracting investment and
demonstrating that cities aren't second-class communities.
"If you don't have air transportation into your communities . those
communities are not going to have an opportunity for economic development,"
said Sen. Ben Nelson, D-Neb. Flights out of Nelson's hometown of McCook get
a $468-per-passenger subsidy. Earlier this year, the McCook City Council
named the airport after Nelson. An average of 5.4 subsidized passengers fly
out every day. |
