Written by: Felipe A. Rodriguez, MBA, MPA, CM
In today’s era, does Essential Air Service (EAS) Programs really benefit an airport along with a small community?
The Essential Air Service (EAS) program was implemented within the Airline Deregulation Act of 1978. Its premise was to make sure that small communities did not lose their current air service by authorizing air carriers/airlines to receive compensation within a community that would not regularly receive any air service at all, hence Deregulation (an open market for the airlines to compete).
In the past 20 years, the numbers of Communities that are enrolled in the program have increased. A few examples of these communities that are part of the program are Muscle Shoals, AL; Macon, GA; Hagerstown MD; and Pendleton, OR.
As of 2016, according to the Department of Transportation (DOT), there are 173 communities currently receiving EAS funding.
The DOT subsidizes and runs the program by paying the air carriers at the end of the month. Airlines turn in their invoices, which are not paid based on passenger numbers but on the number of flights completed as established in the contract.
Initially, the program was authorized for ten years. However, The Federal Aviation Reauthorization Act of 1996, allowed Congress to remove the 10-year time limit and extended the program permanently.
Since this program has been in place for about 40 years, the question is, has it helped to provide air service to rural communities that otherwise would have no service and is it working?
Have small airports along with the small air carriers that are operating due to the program been successful? Are the airlines filling up their seats?
According to the DOT, $175 million is spent annually for subsidies to maintain commercial services within the 173 rural communities.
What are the criteria for a community to receive EAS funding and be part of the program?
According to the FAA Modernization and Reform Act of 2012, a community is eligible if it can maintain an average of 10 or more enplanements per day to be eligible.
Now, as far as subsidies are concerned, the Congressional Research Service mentions that if a community is more than 70 miles from the nearest large or medium hub airport, it requires a rate of subsidy per passenger of $200 or more.
This is an example of the criteria that need to be met for a community to receive subsidies within EAS program.
The positive aspect of this program is that they are assisting the small airlines in providing services to rural communities, in most situations would not have any service at all.
The EAS provides funding for operating air services by creating jobs and a multiplier effect for economic development within these communities. Many of these communities that have air carriers operate due to the EAS programs have become dependent on it for economic growth.
On the other side of the spectrum, if the programs are eliminated—which the Trump administration wants to do—it can have a detrimental effect on not only the carrier’s overall operation and presence, but also on the small airports they occupy.
This would negatively impact most communities. For example, Alaska would be stricken, and feel the aftermath of no EAS funding present.
Therefore, this is why many say that these programs are an essential link for Rural America to be a link in the National Air Transportation system.
This, of course, makes logical sense. If it weren’t because of these programs many of the rural communities in America would be almost nonexistent.
The Trump Administration Against EAS
The Trump administration wants to eradicate the program for a few reasons. First, some of the rural communities are already close to major airports and the residents, if needed, could travel to the airport themselves.
A second reason is that the air carriers that are being subsidized are not going out with full flights, and have high subsidies costs per passenger. From the perspective of the Administration, the federal government is wasting funds on air carriers that are not profitable and are barely surviving at all.
Organizations such as Regional Airline Association (RAA) want rural communities to be connected to the National Air Transportation system—the whole premise of the program.
However, there are measures to shrink or decrease the program. Such as removing such services from the communities that are within driving distance from a medium or large hub airport. This is how some communities in the past have been eliminated from this program.
Read More: Eligible EAS Communities as of October 2016
But the spending within is still a little overwhelming. The Administration is currently evaluating the program and looking to implement the whole program within its budget cuts.
I fully comprehend that the administration has a legitimate concern but to a certain extent. Not to eliminate the program, but to slowly scale down the funding year by year.
I also understand the overall objective of the administration is to bring down the national debt, to control costs, and to stop wasteful spending on programs that are not successful or being utilized as they ought to be.
However, the concern is what type or how severe the Domino Effect would have on small airports, jobs, and local communities.
By cutting down the funding, it would make air carriers and small airports more proactive—not to say they aren’t now. But they would be forced to work on their marketing and public relations to attract and retain high passenger volume.
This would force air carriers to be more self-sufficient, along with the assistance of the airports, as well as the community they serve.
It is imperative that all those that are affected by this 40-year-old program, to get involved and not rely so much on the taxpayer for survival, is how the Administration is looking at this.
It is a complicated issue, concerning what perspective you can agree on, whether it is with the aviation community, which creates and provides a multiplier effect within a town, jurisdiction, or city.
As opposed to the taxpaying citizens who are fed up and frustrated and question the federal government fiscal responsibilities, as to where and how their tax dollars are being channeled through.
This program needs to be put under a microscope and be very carefully analyzed, from its criteria to who’s being funded and for how long.
Each community that receives EAS funding needs to be evaluated, and then the DOT can determine elimination from the program, as opposed to scrapping it altogether. There is a lot at risk here.