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Rural air subsidies test resolve to cut spending

Friday, February 4, 2011

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.

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.


Online:

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


Online:

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


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