Subsidies keeping Cape airport flying

Monday, October 16, 2006

Cape Girardeau Regional Airport continues to receive the highest level of federal subsidies in Missouri under the Essential Air Service program.

Local air carrier, Regions Air, will receive $1.147 million for the current year, allowing it to provide three daily flights to St. Louis. The fourth round-trip is subsidized through a separate program.

The next closest recipient in the state is Kirksville, which receives $840,200. Columbia and Fort Leonard Wood also receive subsidies under the program.

Essential Air Service was created in 1978 when the Airline Deregulation Act made it unnecessary for carriers to fly to unprofitable destinations. The Department of Transportation-run program gives the money directly to the carrier and requires a certain amount of flights to a predetermined "hub."

EAS was designed to expire in 1988, but its popularity has forced Congress to make it more or less permanent.

"Without Essential Air we would be forced to attempt to get other airlines to come here on their own or provide some sort of incentive from taxpayer dollars, and these days for a smaller community the likelihood of that happening would be very small without some kind of money," said Cape Girardeau Regional Airport manager Bruce Loy.

Loy said the subsidies dolled out to carriers in a competitive bidding process equal the total cost of air-travel plus five percent profit.

"That's their only guarantee of any kind of profit," said Loy. "However with the changing prices of fuel it hasn't exactly worked out that way. If you talk to Regions they'll tell you their not even making that five percent."

A call to Regions Air was not immediately returned.

But not everyone is a fan of the program. The Bush administration indicated it would like to see funding more than cut in half from the current level of $110 million to $50 million. Congress, though, seems likely to defend the program.

"I think it would be very difficult for Congress to delete it although some would probably like to," said Loy. "It would knock out all commuter service in the state, if you look not only at us, but places like Columbia and Joplin, none of them would have service without the program. In fact, Paducah is one of the few airports in this entire region that would still have connection service."

Loy said in the past EAS money was contingent on identifying to one local hub and routing flights there. That is why all Cape Girardeau connection flights go through St. Louis.

But Loy has recently seen willingness by DOT officials to be more flexible on the issue. That has caused him to look hard to offering a flight to another city.

"I'd love to get a flight into Cincinnati, it would be a natural connection for us with Procter & Gamble located here," he said.

Loy said airport figures on flights to and from Cincinnati indicate enough travel business to support a regular flight. A past request to make Cincinnati the destination of airport's fourth daily round-trip flight was turned down by DOT.

335-6611, extension 245

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