The program is called Essential Air Service, and its stated intent is to ensure that small communities distant from regional airport hubs maintain public air transportation services.
Since 1978 seven Montana communities; Havre, Glasgow, Sidney, Glendive, Lewistown, Miles City and Wolf Point have all relied on the EAS program to prevent regional air carriers from halting passenger service to and from their airports.
On Sept. 5, the U.S. Department of Transportation issued a report detailing subsidies to be paid for service to Montana’s small community airports. Significant changes are on the horizon for air travel across the state, including the discontinuation of passenger service to Lewistown and Miles City, and the introduction of a new airline to Montana.
“After careful consideration, including the comments of the Montana Essential Air Service Task Force, the Department has decided to select Cape Air as the EAS carrier for all five communities,” the report states.
Cape Air has until Dec. 1 to assume operations from Montana’s previous EAS carrier, Silver Airways. Though Cape Air’s exact flight schedule in Montana has yet to be determined, the airline’s proposal to provide EAS details many of the specifics.
Cape Air has been contracted through Nov. 30, 2015, to provide two daily nonstop roundtrips from Havre, Glasgow, Glendive and Wolf Point to Billings, and four daily nonstop roundtrips between Sidney and Billings. Each of the five remaining EAS communities will be served utilizing Cessna 402, nine-passenger aircraft. In exchange the Department of Transportation will pay Cape Air $11,950,426 per year.
The cost to fly Cape Air has also been set; $49 each way from each site, taxes and fees included.
Forty-nine dollars to fly to Billings is a bargain by nearly any travel standard. A car driving the 294 miles between Wolf Point and Logan Airport would need to get at least 21 miles to the gallon to get there for the same price. And that in a nutshell is both the biggest selling point, and the greatest criticism of the EAS program; the revenue airlines receive from passenger fares frequently constitutes only a small fraction of the cost of providing air service to EAS communities.
Taking flight
EAS was established as an outgrowth of airline deregulation in the 1970s. After the federal government stopped setting airline fares, routes and schedules many congressional representatives were concerned that communities with low airline traffic levels would lose service entirely as carriers shifted their operations to larger, more lucrative markets.
EAS was originally envisaged as a temporary program to help communities adjust to deregulation. In 1978, Congress funded the program at $70 million for a 10 year period to serve 37 airports in 16 states.
But the EAS program never went away. By 2011 EAS had mushroomed to a nearly $200 million a year program serving more than 150 airports scattered across every state in the country. In some cases EAS subsidies were more than 10 times the price of the fares airlines charged to their customers — often in locations that saw negligible use of the service. Some of the most egregious examples were in Montana.
A Department of Transportation report notes that in fiscal year 2012 Silver Airways transported 660 passengers from Lewistown and 694 passengers from Miles City. In each communities’ case, Silver Airways averaged just slightly more than one passenger on any of its 12 scheduled flights each week. For this singular service the federal government paid Silver Airways $2.95 million a year — an average of $2,009 for every passenger coming out of Lewistown and $2,337 for a passenger from Miles City. The Silver Airways passengers themselves paid just $142.50 for a roundtrip flight to Billings.
Even at that level of funding, EAS airlines has a tough time turning a profit in Montana. Over the past five years four different carriers — or their rebranded incarnations — have unsuccessfully tried to manage air travel in Big Sky Country.
For most of the 35 years the EAS program has been in existence, Big Sky Airlines, headquartered in Billings, held the federal contract for EAS service in Montana. But the company began to run into financial trouble in 2006. In December 2007, Big Sky announced it would cease operations in 90 days due to disappointing revenues and record-high fuel prices.
Great Lakes Airlines of Cheyenne, Wyo., was subsequently awarded the EAS contract for Montana, but was never really able to get its service off the ground. A shortage of the 19-seat aircraft Great Lakes employed left several Montana cities without any air service at all for nearly a year. When a schedule of flights was finally initiated in February 2009, Great Lakes developed a reputation for late arrivals and skipped landings.
In 2011 the EAS Task Force in Montana voted unanimously to not renew Great Lake’s contract, and to award it instead to Gulf Stream Airways. Gulf Stream’s parent company had filed for Chapter 11 bankruptcy protection less than a year earlier, and the airline was rebranded as Silver Airways in December 2011. On June 28, Silver Airways filed a 90-day notice of its intent to terminate its Montana subsidized service.
Take the bus?
Nationally, the EAS program has been more stable.
The Department of Transportation reports the average subsidy per EAS passenger nationwide (outside Alaska) is $74. In Montana cities like Glasgow, Glendive, Havre and Wolf Point, which recorded a combined average of 5.5 airline passengers a day in 2012, the per passenger subsidy amounts to roughly $535.
In Sidney, where the Bakken oil boom is driving commuter and business travel in and out of the area, airline passenger traffic has increased 161 percent in just the last two years. Cape Air projects it will sell more than 6,300 tickets to and from the Sidney airport in 2014. There the per passenger subsidy should be around $237.
However, many fiscally conservative congressmen question whether the federal government should be chipping in anything at all to help pay airfares for cash-rich oil patch work workers or wealthy energy company executives; let alone subsidize hundreds of EAS flights averaging less than five passengers per plane.
In 2011 a coalition of mostly Republican congressmen, led by Sen. John McCain, R-Ariz., launched an attempt to strip the EAS program of most of its funding. Rep. Tom McClintock, R-Calif., described EAS as “some of the least-essential air services in the country” and little more than “an air taxi service for wealthy Americans.”
A study of the program funded by the American Bus Association and Taxpayers for Common Sense in 2011 notes that if the EAS program was transformed into an essential bus service program offering the same number of arrivals and departures to each EAS community now served, the cost of the program would be reduced by more than 70 percent. An essential bus service program would also use about 7.9 million fewer gallons of fuel, and would cut toxic gas emissions into the atmosphere by more than 90,000 tons annually.
In March 2013 the Washington Post published an editorial arguing that the EAS program should be “zeroed out, and the $200 million we waste on it devoted to a truly national purpose: perhaps deficit reduction, military readiness or the social safety net.”
Still, the EAS program lives on. On June 28 of this year the House passed a transportation and housing bill boosting EAS funding by 11 percent to $214 million annually. The budgetary success of the program can be attributed in some degree to the influence of Montana’s own congressional delegation.
All of Montana’s congressmen going back to at least 2006 have consistently voted in favor of continued EAS funding. That includes s support from former Republican Rep. Denny Rehberg and freshman Rep. Steve Daines. These efforts have been led by Sen. Max Baucus, who helped found the Senate Essential Air Service Caucus and who serves as the caucus’ co-chair with Sen. Susan Collins, R-Maine.
“The Essential Air Service Program is a promise to rural America, which absolutely needs airports for economic development,” Baucus said in a speech before Congress in 2011. “We (Americans living in the west) have tremendous distances between population centers, and we need reliable air travel to ensure jobs, private enterprise, and access to medical assistance.”
McCain had a different take.
“I believe the real devastation to rural communities, big communities, small communities, medium-size communities, if we don’t stop mortgaging our children and grandchildren’s futures,” he said before Congress that same year. “This program was put into being in 1978, was supposed to be there for 10 years, was a few million dollars, and now according to this bill it’s going to be $200 million.”
The Washington Post’s editorial staff, citing the number of federal programs indiscriminately cut by federal budget sequestration in 2013, echoed McCain’s comments.
“Alas, if Congress and the White House were capable of making such choices (to cut EAS funding), we probably never would have had sequestration in the first place,” the Washington Post’s editorial staff wrote.
Original Publication URL: http://www.greatfallstribune.com/apps/pbcs.dll/article?AID=2013309150045&nclick_check=1
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