The Essential Air Service program, originally intended to sunset after one decade, is now in its fifth. And despite being targeted for cuts in President Donald Trump’s first budget proposal, the program that subsidizes travel at four Magnolia State airports is highly unlikely to disappear anytime soon.
Trump’s fiscal 2018 budget says the program — which provides per-passenger subsidies to airlines serving small airports that might otherwise lose commercial air service — is unnecessary because some EAS-eligible airports are relatively close to major airports and could be served by other existing modes of transportation. The Office of Management and Budget said in the 2018 proposal that axing the program could save $175 million.
The EAS subsidy was developed after airline deregulation in 1978 and was intended to sunset after 10 years. Now, 41 years later, it’s still here, despite some reforms by the Obama administration that eliminated the eligibility of some airports. Greenville, Hattiesburg-Laurel, Meridian and Tupelo are the Mississippi airports served by EAS.
U.S. Sen. Roger Wicker said in a statement that he’s committed to keeping the program flying.
“Reliable air service provides an important economic benefit to Mississippians,” Wicker said. “Many of the state’s airports rely on the Essential Air Service program to deliver dependable and safe air travel. I am hopeful that our airports could soon be supported by innovative solutions that rely less heavily on taxpayer funding. Until then, I believe that Congress should find other ways to achieve budget savings.”
Chris Gallegos, spokesperson for Senate Appropriations Chairman Thad Cochran, told Mississippi Watchdog that Cochran is looking forward to considering the Trump administration’s budget proposal, but didn’t mention whether the senator would support continuing the program.
Robert Poole is the director of transportation at the libertarian Reason Foundation and a Massachusetts Institute of Technology-trained engineer who has advised four administrations on transportation issues. He says the likelihood of the EAS program being scrapped is minimal, even though he says it isn’t cost-effective.
“It’s something that’s very popular with members of Congress,” Poole told Mississippi Watchdog. “It’s hard for me to believe that they could get a majority in either house for this to pass.”
Trimming around the edges might be a better bet.
And the Department of Transportation promulgated new rules, subject to waivers, including a cap on the per-passenger subsidy at $200 in 2014 unless the airport is 210 miles or more from a major hub airport. Rules on the minimum 10 boarding passengers per day and an airport’s proximity to a larger facility are enforced on airports receiving EAS subsidies, and airports that can’t comply lose funding. The DOT can provide waivers, however, which it did most recently last year for communities that are in violation of either the per-passenger subsidy cap or the proximity rule.
“They’ve tried to tighten up things since in some cases per-passenger subsidies were more than $1,000, which seems kind of egregious,” Poole said. “There’s bus service to the vast majority of places that could get you to a place with a bigger airport. It’s a pimple on the face of the federal government, but it does seem outrageous for ordinary people paying taxes that subsidies at that level should be provided.”
Two of the smaller Mississippi airports that receive EAS subsidies are struggling to maintain them.
Tupelo’s subsidy was threatened with termination because the federal government pays $333 per passenger, or $1.7 million per year to small carrier Contour Airlines for flights to Nashville on nine-passenger turboprops. The DOT granted Tupelo a waiver after Contour had to interrupt service. Tupelo is 203 miles from Nashville’s airport. Passenger traffic at the airport has plunged from more than 5,500 in 2014 to 2,560 in 2015.
Greenville’s Mid-Delta Airport is served by Boutique Airlines, a small carrier with flights to Dallas-Fort Worth and whose agreement expires later this year. Under the new proposal filed by Boutique, the annual EAS subsidy would climb from more than $2 million per year to $2.7 million in the first year of a four-year agreement. The agreement would top out at $2.9 million per year. Passenger numbers in Greenville have dropped off severely from more than 1,600 in 2014 to 723 in 2015.
The state’s two other EAS airports are showing better results.
Hattiesburg-Laurel and Meridian are enjoying heavier passenger traffic and are even adding flights. Both airports, served by SkyWest Airlines to its Dallas-Fort Worth hub, have added flights to Chicago this summer. Their per-passenger subsidies are the lowest in the state, with Hattiesburg-Laurel’s at $184 per passenger and Meridian’s at $79 per passenger. In 2014, both airports had more than 6,600 emplanements apiece. In 2015, those numbers jumped to more than 24,000 for Meridian and more than 12,900 for Hattiesburg-Laurel.
Hattiesburg-Laurel’s annual subsidy is $3.1 million while Meridian’s is $2.9 million. Both are less than 210 miles from Louis Armstrong New Orleans International Airport, an airport the DOT considers a medium-sized hub.