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BobPatterson
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Essential Air Service Program

Thu Feb 16, 2017 6:10 am

This article discusses such things as the Trump administration wanting to eliminate a number of government subsidy programs. (Artd, Humanities, Public Radio, EASP, etc.)

http://www.aviationpros.com/news/123006 ... ding-model

There are something like 170 small airports that receive subsidies to attract air carriers to provide commuter or relatively short-distance service to larger airports for follow-on transportation.

I've read stories about a few airlines such as Great Lakes struggling, or failing, to maintain services due to pilot shortages and for other reasons.

What I have never seen is a comprehensive report showing annual costs per passenger served by this program. I can imagine that the taxpayers may be paying $50-$100 or more per passenger benefiting from this service.

Can anyone point me to accurate information about EASP costs/benefits?

Please discuss.

Thanks.
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knope2001
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Re: Essential Air Service Program

Thu Feb 16, 2017 12:09 pm

Here are some links with information:
https://www.transportation.gov/policy/a ... ir-service
https://cms.dot.gov/policy/aviation-pol ... ommunities

Many EAS markets are in Alaska, but there are just over 100 in rest of the country (including Puerto Rico.)

Some of the largest/highest volume EAS markets have subsidies under $100 per passenger on 50-seat RJ's.

Many other EAS markets have subsidies near the $200 per passenger cap. Exceeding this generally gets the community kicked out of the program.

Finally there are some especially-remote EAS markets (more than 210 miles from a medium or large hub airport) which are not subject to the $200 cap -- their subsidy can be as high as $1000 before being terminated. There are not too many left anywhere near that high, but they do make for juicy stories on wasteful government spending.

A chronic issue with EAS is a lack of airlines available to support reliable branded service. EAS airports large enough to get branded RJ flying tend to do well -- some like Sioux City have even stopped needing subsidy. But communities not large enough for an RJ airline often cycle through a series of unreliable small prop airlines, Great Lakes being a big offender. This sort of service kills demand and leads to airports falling out of the program.

There have been a few more successful and reliable small prop operators such as Boutique Air, Cape Aire, Air Choice One. Flying a reliable service with low fares, they restore some of that lost traffic. But subsidies are still high in part because fares are low to attract passengers.

EAS has outlived its original intended life by many years, but it has survived in part because conservatives from rural areas who benefit from EAS that would normally oppose spending like this let EAS alone. As a result it has limped along with periodic screw-tightening over the years, but no real ability to reform, improve or kill it.
 
flyingcat
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Re: Essential Air Service Program

Thu Feb 16, 2017 1:46 pm

The problem with cutting this is that there is that too many in both parties are dependent on EAS to deliver accolades with the voters in their districts. I'm not sure there is enough pull in Congress to pull this away entirely. However there might be enough to modify it. Increasing the minimum mileage length from a larger airport or scrapping those with the highest dollar per passenger spend. Alaska is the biggest quandry as there is truly no alternative form of transport.
 
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BobPatterson
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Re: Essential Air Service Program

Fri Feb 17, 2017 2:24 am

knope2001 wrote:
Here are some links with information:
https://www.transportation.gov/policy/a ... ir-service
https://cms.dot.gov/policy/aviation-pol ... ommunities

Many EAS markets are in Alaska, but there are just over 100 in rest of the country (including Puerto Rico.)

Some of the largest/highest volume EAS markets have subsidies under $100 per passenger on 50-seat RJ's.

Many other EAS markets have subsidies near the $200 per passenger cap. Exceeding this generally gets the community kicked out of the program.

Finally there are some especially-remote EAS markets (more than 210 miles from a medium or large hub airport) which are not subject to the $200 cap -- their subsidy can be as high as $1000 before being terminated. There are not too many left anywhere near that high, but they do make for juicy stories on wasteful government spending.

A chronic issue with EAS is a lack of airlines available to support reliable branded service. EAS airports large enough to get branded RJ flying tend to do well -- some like Sioux City have even stopped needing subsidy. But communities not large enough for an RJ airline often cycle through a series of unreliable small prop airlines, Great Lakes being a big offender. This sort of service kills demand and leads to airports falling out of the program.

There have been a few more successful and reliable small prop operators such as Boutique Air, Cape Aire, Air Choice One. Flying a reliable service with low fares, they restore some of that lost traffic. But subsidies are still high in part because fares are low to attract passengers.

EAS has outlived its original intended life by many years, but it has survived in part because conservatives from rural areas who benefit from EAS that would normally oppose spending like this let EAS alone. As a result it has limped along with periodic screw-tightening over the years, but no real ability to reform, improve or kill it.


Thank you very, very much for providing the links and discussion. I've spent a few hours reading through some of the material and making notes on costs for EAS service to BWI from a single point in Maryland (Hagerstown) and several places in Pennsylvania (Du Bois, Altoona, Lancaster). All are on the list for exceeding the $200 subsidy per passenger cap, and Hagerstown is above $300 or $600 depending on how passengers are counted.

Hagerstown has been in the program for quite some time. Back in 2006 they averaged 5.4 pax per flight at a cost to the pax of $77 and taxpaper subsidy of $130.

In 2012 (different destination airport and carrier) costs were $50 per pax plus $176 subsidy for 2.6 pax/flight.

I didn't see the current 2017 pax out-of-pocket cost where the subsidy is $312 (most likely) or $624.

Hagerstown folks can drive about 76 miles to BWI or about 65 miles to IAD. Or they can use this expensive, taxpayer supported air taxi service.

What a boondoggle. I think the per person subsidies are greater even than for Amtrak (which might be justified).

Thanks again.
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JBo
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Re: Essential Air Service Program

Fri Feb 17, 2017 2:55 am

There are definitely a lot of cities currently receiving EAS subsidies that definitely <i>don't</i> need to be in the program due to their proximity to other airports with commercial service. My hometown airport, MKG, is one such example, having fallen into the EAS system in 2009 when Mesaba, the sole remaining carrier after YX left town, decided it needed subsidies to keep serving the airport.

MKG technically qualifies for EAS due to its distance from the nearest hub airports (DTW, ORD), but it's also only 40 miles away from GRR, which has service from just about every major US scheduled carrier.

Granted, MKG's per-pax subsidy is only $86 under the current contract with OO, but it's still a great example of an airport in the EAS system that doesn't technically <i>need</i> the service given proximity to GRR.

However, there are also many airports in the program that aren't anywhere near any other airports with commercial service. The subisides for these cities are legit and should continue.

Some reform of the program is probably in order to adjust the criteria for qualifying cities based on proximity to nearby airports with commercial service.
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BuildingMyBento
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Re: Essential Air Service Program

Fri Feb 17, 2017 4:17 am

BobPatterson wrote:

Hagerstown folks can drive about 76 miles to BWI or about 65 miles to IAD. Or they can use this expensive, taxpayer supported air taxi service.

What a boondoggle. I think the per person subsidies are greater even than for Amtrak (which might be justified).

Thanks again.


Last year, I flew with Sun Air Express (now Southern Airways Express) from IAD to HGR, though this route no longer exists.

Being wholly unfamiliar with Hagerstown, I expected there to be easier (rather, more frequent) public transit connections to Baltimore and DC (the flight landed in the late afternoon; the rental car agency had already closed, not to mention the airport was about to shut for the night).

The next day, I took a cab from my hotel to "some place" to catch an express bus to the Shady Grove station of the red line of the DC metro. Baltimore sounded even more difficult to reach...and that city apparently now has service to HGR with Southern Airways Express.

When driving is not an option/infeasible, and public transit access is sub-par at best - to be expected for many an EAS route, I have to give a modicum of appreciation to EAS's existence. That said, a $200 subsidy cap for routes <210 miles seems awfully generous.
 
TUSDawg23
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Re: Essential Air Service Program

Fri Feb 17, 2017 4:27 am

I think there are many markets that are within a reasonable driving distance for EAS cities, but the program is really a drop in the bucket. If smaller communities can gain some economic benefit from it and there are studies to back that up, then why not?
 
Jshank83
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Re: Essential Air Service Program

Fri Feb 17, 2017 4:38 am

Owensboro, Ky (OWB) in is this program with flights on Cape Air to STL. I know theirs are over the $200 mark now, but they get a waiver (for now). They also have an Allegiant flight to Orlando. This is even though Evansville's airport (EVV) is only 49 miles away and has DL, AA, UA and Allegiant. As much as I like the extra passengers coming to STL, it doesn't really make much sense for them to be in the program, especially at that subsidy price.
 
michman
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Re: Essential Air Service Program

Fri Feb 17, 2017 6:41 am

JBo wrote:
There are definitely a lot of cities currently receiving EAS subsidies that definitely <i>don't</i> need to be in the program due to their proximity to other airports with commercial service. My hometown airport, MKG, is one such example, having fallen into the EAS system in 2009 when Mesaba, the sole remaining carrier after YX left town, decided it needed subsidies to keep serving the airport.

MKG technically qualifies for EAS due to its distance from the nearest hub airports (DTW, ORD), but it's also only 40 miles away from GRR, which has service from just about every major US scheduled carrier.

Granted, MKG's per-pax subsidy is only $86 under the current contract with OO, but it's still a great example of an airport in the EAS system that doesn't technically <i>need</i> the service given proximity to GRR.

However, there are also many airports in the program that aren't anywhere near any other airports with commercial service. The subisides for these cities are legit and should continue.

Some reform of the program is probably in order to adjust the criteria for qualifying cities based on proximity to nearby airports with commercial service.


The requirement is that the airport be more than 70 miles away from a "large or medium" hub. The definition of "hub" here has nothing to do with the traditional legacy airline hub. Rather, a medium sized hub is one which has at least .25% and less than 1% of annual boardings among US airports. GRR falls somewhat short of the .25% threshold of medium sized hubs which is why MKG continues to receive EAS subsidies.
 
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BobPatterson
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Re: Essential Air Service Program

Fri Feb 17, 2017 2:36 pm

TUSDawg23 wrote:
I think there are many markets that are within a reasonable driving distance for EAS cities, but the program is really a drop in the bucket. If smaller communities can gain some economic benefit from it and there are studies to back that up, then why not?


I'd love to read a few studies that demonstrate economic benefits from the EAS program. Can you provide links to any?

I realize that there can be differences in economic viewpoints. Certainly, the EAS program benefits the pilots and ground personnel whose jobs depend on it. But those benefits are largely dependent upon transfer payments -- taxes -- payed mainly by those who do not use the service. This really amounts to economic welfare.

If there were truly economic benefits to the local communities, then they should be able to support these programs wholly with local revenues, wholly out of passenger revenue, or some combination of the two.

In my mind I can justify subsidies for mass transit (the Metro bus and rail system of the Wash., D.C. area for example) because the masses benefit from them and it would be extremely difficult for many people to get to work without them.

I am less enthusiastic about subsidies for Amtrak because they constitutes unfair competition against airlines who get no subsidies.

The EAS subsidies run from about $1 million to almost $3 million per city per year. They usually pay the majority (sometimes 2/3 or more) of the cost of airfare for a small number of people.

I find that hard to justify.
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c933103
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Re: Essential Air Service Program

Fri Feb 17, 2017 10:04 pm

....Why are those subsidized service using jets? I get that those services are essential and require external support to keep the link, but why waste money on jet? Especially when many of those are not really that far away from larger airports and thus using jet should not give any tangible benefit to users. If the switching from jet from prop is enough to discourage people from flying it to such an extent that make the demand decreased to a level that cannot be sustained even with subsidy then the service isn't that essential afterall
 
drdisque
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Re: Essential Air Service Program

Fri Feb 17, 2017 10:48 pm

They use the 50 seat RJ has much lower CASM than a 19 or 30 seat prop and because these branded operations already have them in their fleet and paid for.

Aerodynamics Inc. and ViaAir are trying their hand at un-branded 50 seat jet operations (because the cost of acquisition for a 50 seat RJ has fallen so low). Aerodynamics is flying DEN-PIR-ATY and Via is flying SHD-CLT and CKB-BWI/CLT and LWB-CLT both on an ERJ-145 for some of the flights Via is tagging on a flight to SGJ or SFB so they can be sort of a hybrid of a traditional EAS carrier and a carrier like Allegiant (flying small cities to Florida).
 
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ua900
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Re: Essential Air Service Program

Fri Feb 17, 2017 10:53 pm

EAS isn't going anywhere. It's one of the last programs that a GOP controlled congress would cut since rural areas vote overwhelmingly GOP (and voted for Trump) in the last election. As someone who has personally traveled on a number of EAS routes over the years, I can tell you that many communities that see EAS see passengers like dentists and other technical specialists travel into EAS communities to provide their services in cases where they can't find anyone who wants to move there on a permanent basis. These communities are often too small, too poor, too uneducated, too isolated and have too few people in them to warrant full timers, or non-EAS service for that matter. Cut EAS and the lights go out in some of these places. It won't get cut and remaining EAS communities rarely opt out. As someone who traveled a lot of smaller airports that no longer see scheduled service, I miss the days when an E-120 would get me and my family into some small town for the weekend, and if EAS helps to slow or stop the bleeding then so be it.
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32andBelow
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Re: Essential Air Service Program

Fri Feb 17, 2017 11:09 pm

drdisque wrote:
They use the 50 seat RJ has much lower CASM than a 19 or 30 seat prop and because these branded operations already have them in their fleet and paid for.

Aerodynamics Inc. and ViaAir are trying their hand at un-branded 50 seat jet operations (because the cost of acquisition for a 50 seat RJ has fallen so low). Aerodynamics is flying DEN-PIR-ATY and Via is flying SHD-CLT and CKB-BWI/CLT and LWB-CLT both on an ERJ-145 for some of the flights Via is tagging on a flight to SGJ or SFB so they can be sort of a hybrid of a traditional EAS carrier and a carrier like Allegiant (flying small cities to Florida).

If if the CASM is better these markets mostly cannot fill 50 seats at a time so your RASM is going to tank.
 
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BobPatterson
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Re: Essential Air Service Program

Sat Feb 18, 2017 1:40 am

ua900 wrote:
EAS isn't going anywhere. It's one of the last programs that a GOP controlled congress would cut since rural areas vote overwhelmingly GOP (and voted for Trump) in the last election. As someone who has personally traveled on a number of EAS routes over the years, I can tell you that many communities that see EAS see passengers like dentists and other technical specialists travel into EAS communities to provide their services in cases where they can't find anyone who wants to move there on a permanent basis. These communities are often too small, too poor, too uneducated, too isolated and have too few people in them to warrant full timers, or non-EAS service for that matter. Cut EAS and the lights go out in some of these places. It won't get cut and remaining EAS communities rarely opt out. As someone who traveled a lot of smaller airports that no longer see scheduled service, I miss the days when an E-120 would get me and my family into some small town for the weekend, and if EAS helps to slow or stop the bleeding then so be it.


I mentioned these EAS cities above. I think I would find similar data for the majority of EAS cities/towns:

EAS City..................Local.........Metro.........Dentists
Altoona, PA.............45,796......125,600............30+
Du Bois, PA..............7,632........80,994..............5+
Lancaster, PA..........59,325......536,626.............15+
Hagerstown, MD......40,612......222,771.............76+

I had a dentist, here in Bowie, MD, who flew his own plane. He needed no subsidies. There is a substantial Flying Dentists Association, but I can't find their membership number.

Seems to me that any town with an airport suitable for handling EAS aircraft on paved runways won't often be the kind of hardship cases that you picture. After all, most of the people who will use the EAS service are locals who are able to afford air fares.

I've taken several vacation trips where I sought out and used every passenger (with car) ferry along my route. As far as I know there were no federal subsidies involved. Why should there be? No one subsidized our air taxi from Key West to Ft. Jefferson, Dry Tortugas.
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drdisque
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Re: Essential Air Service Program

Sat Feb 18, 2017 1:53 am

RASM isn't really something that's part of the equation for EAS.

Your fares are part of your bid. Lowest fares goes a long way in winning the bid.

Low fares also keep pax count up and subsidy per pax down.
 
StrandedAtMKG
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Re: Essential Air Service Program

Sat Feb 18, 2017 3:00 am

JBo wrote:
There are definitely a lot of cities currently receiving EAS subsidies that definitely <i>don't</i> need to be in the program due to their proximity to other airports with commercial service. My hometown airport, MKG, is one such example, having fallen into the EAS system in 2009 when Mesaba, the sole remaining carrier after YX left town, decided it needed subsidies to keep serving the airport.


A. You beat me to the punch. MKG definitely does not need an EAS subsidy...or commercial service, for that matter. GRR isn't *that* far away. SY and Riverside Resort appear to be making a killing off their monthly charter to IFP, but United needs to either suck it up or go away. (It's so odd having an island of UA service in what is otherwise DL country, but I digress...)

B. Hi, neighbor!
 
flyfresno
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Re: Essential Air Service Program

Sat Feb 18, 2017 7:35 am

Right now, airports qualify for EAS if they are more than 70 miles from a medium or large hub airport. At the very least, this definition should be expanded to include small hub airports (and perhaps the mileage also expanded to 100+ miles). There is no reason why VIS should have been allowed to qualify for EAS when FAT is less than a 45 minute drive (VIS later withdrew from the EAS program and took a payout for airport improvements in lieu of the subsidiary, but had they not chosen to, they would still qualify). There are a few other examples of airports (see above) that are more than close enough to "small hub" airports which still have multiple airlines and destinations, leak 90% of their passengers to those "small hubs" anyway, but can still somehow get EAS flights. This is a total oversight and waste.
 
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Re: Essential Air Service Program

Sat Feb 18, 2017 3:42 pm

"I am less enthusiastic about subsidies for Amtrak because they constitutes unfair competition against airlines who get no subsidies."

The airline industry has a lot of subsidies, but has arranged them so as to be politically correct.

I lived in an Alaskan village for several months, there was no doctor or dentist within a couple hundred miles, let alone a paved road to anywhere. Mail, veggies, medical, name it, it came by air, or a once a year barge.
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michman
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Re: Essential Air Service Program

Sat Feb 18, 2017 4:46 pm

frmrCapCadet wrote:
"I am less enthusiastic about subsidies for Amtrak because they constitutes unfair competition against airlines who get no subsidies."

The airline industry has a lot of subsidies, but has arranged them so as to be politically correct.

I lived in an Alaskan village for several months, there was no doctor or dentist within a couple hundred miles, let alone a paved road to anywhere. Mail, veggies, medical, name it, it came by air, or a once a year barge.


Certainly there are places where air service is vital, but many of the EAS cities do not fit that category. The airline "subsidy" argument is also a lot of hogwash as the government is just acting as the middle-man for the PFC's, segment taxes, and excise taxes that passengers pay on their tickets. Do you how many taxes and fees are assessed on Amtrak tickets -- ZERO.
 
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hhslax2
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Re: Essential Air Service Program

Sat Feb 18, 2017 6:04 pm

The PKB, MGW, and CKB services either all need to go or be consolidated to CKB. MGW is about an hour and 15 minutes from PIT. CKB adds 30 minutes to that. PKB is about an hour and 15 minutes from CRW, which has flights to a number of hubs. Personally, I don't think any airport that is under a 2 hour drive from an airport with regular service should qualify.
 
sagechan
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Re: Essential Air Service Program

Sat Feb 18, 2017 10:07 pm

EAS needs to be trimmed to true needs. It needs travel time distance requirements to nearest qualified airport, minimum passenger boarding requirements, and maximum subsidy amounts. Alaska is a special case that should be unrelated to these requirements.

BobPatterson wrote:
TUSDawg23 wrote:
I think there are many markets that are within a reasonable driving distance for EAS cities, but the program is really a drop in the bucket. If smaller communities can gain some economic benefit from it and there are studies to back that up, then why not?


I'd love to read a few studies that demonstrate economic benefits from the EAS program. Can you provide links to any?

I realize that there can be differences in economic viewpoints. Certainly, the EAS program benefits the pilots and ground personnel whose jobs depend on it. But those benefits are largely dependent upon transfer payments -- taxes -- payed mainly by those who do not use the service. This really amounts to economic welfare.

If there were truly economic benefits to the local communities, then they should be able to support these programs wholly with local revenues, wholly out of passenger revenue, or some combination of the two.

In my mind I can justify subsidies for mass transit (the Metro bus and rail system of the Wash., D.C. area for example) because the masses benefit from them and it would be extremely difficult for many people to get to work without them.

I am less enthusiastic about subsidies for Amtrak because they constitutes unfair competition against airlines who get no subsidies.

The EAS subsidies run from about $1 million to almost $3 million per city per year. They usually pay the majority (sometimes 2/3 or more) of the cost of airfare for a small number of people.

I find that hard to justify.


I generally agree with you points on EAS, though based on your commentary, I'm assuming you hate drivers as automobile support subsidies far exceed Amtrak (which recoupse ~85% of operating and ~69% of total costs.) Less than 50% or road construction and maintenance is now covered by taxes and fees paid by drivers, and the built environment due to zoning and the insane amount of free parking due to things like parking minimums, make drivers the most subsidized and real cost avoiding mode of transportation.
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BobPatterson
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Re: Essential Air Service Program

Sat Feb 18, 2017 10:53 pm

michman wrote:
The airline "subsidy" argument is also a lot of hogwash as the government is just acting as the middle-man for the PFC's, segment taxes, and excise taxes that passengers pay on their tickets. Do you how many taxes and fees are assessed on Amtrak tickets -- ZERO.


Assuming everything you say is true, it means that airline passengers are paying toward the true costs for air transport services they use. With the exception of the relatively small number of EAS passengers, their ticket costs are not directly subsidized by Federal taxpayers. However, let's not forget a number of flights that are subsidized by State, city or airport authority programs. Such as the British Airway flights from BWI to LHR ($3.4 million subsidy for recent two year period).

With respect to Amtrak (Federally owned and subsidized) a subsidy can be assigned/pro rated to every ticket sold. Paid for by all Federal taxpayers (including those who travel by Amtrak). Here's some rough data for Amtrak subsidies:

Year..........Subsidy.......Passengers....$$ per Pax

1997.....................................................$47.02 (loss reported, not subsidy)
2009........$1.488 Bn......27,200,000........$54.71
2010........$1.565 Bn......28,700,000........$54.53
2011........$1.484 Bn......30,200,000........$49.14
2012........$1.418 Bn......31,240,565........$45.39
2013........$1.374 Bn......31,900,000........$43.07.**
2014........$1.370 Bn......30,929,274........$44.29
2015........$1.375 Bn

It is interesting to contemplate that a number of U.S. airports accommodate more passengers annually than does the entire Amtrak system.

Data from Wikipedia and Amtrak. ** budget estimate

1997 data from http://www.publicpurpose.com/ic-amtroute.htm At that time, the DC-NYC Metroliner was the only profitable route out of 43 Amtrak offerings.

While poking around looking for information I noticed that Amtrak in 2015 provided transportation for almost 700,000 passengers to/from the station at BWI airport. I think, but am not sure, that this includes the Maryland MARC program for which Amtrak operates the trains. Another guess of mine is that many, perhaps most, of those passengers are airport employees, not travelers. The MARC programs is subsidized also.
Last edited by BobPatterson on Sat Feb 18, 2017 11:10 pm, edited 2 times in total.
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BobPatterson
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Re: Essential Air Service Program

Sat Feb 18, 2017 11:06 pm

sagechan wrote:
I generally agree with you points on EAS, though based on your commentary, I'm assuming you hate drivers as automobile support subsidies far exceed Amtrak (which recoupse ~85% of operating and ~69% of total costs.) Less than 50% or road construction and maintenance is now covered by taxes and fees paid by drivers, and the built environment due to zoning and the insane amount of free parking due to things like parking minimums, make drivers the most subsidized and real cost avoiding mode of transportation.


Please don't assume that I hate anyone.

I would love to pay 2x or 3x the current Federal tax on gasoline if the funds are devoted exclusivly to maintaining the Federal Highway System. Ditto for State taxes on gasoline/diesel/biofuel. Further, those taxes should be mandated to keep pace with inflation.

I'm also not against taxes to support nationwide improvements in infrastructure for the airline industry (ATC, Airports, security that work speedily and effectively).
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sagechan
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Re: Essential Air Service Program

Sat Feb 18, 2017 11:17 pm



Please don't assume that I hate anyone.

I would love to pay 2x or 3x the current Federal tax on gasoline if the funds are devoted exclusivly to maintaining the Federal Highway System. Ditto for State taxes on gasoline/diesel/biofuel. Further, those taxes should be mandated to keep pace with inflation.

I'm also not against taxes to support nationwide improvements in infrastructure for the airline industry (ATC, Airports, security that work speedily and effectively).


Apologize for use of "hate" strong word intended for emphasis not accusation.
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dc10lover
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Re: Essential Air Service Program

Sat Feb 18, 2017 11:17 pm

Actually it should not be a "hub". Pendleton, Oregon is vey close to Pasco. PDT should not have tax payer airline service. PSC is not a hub but has a lot of service from 4 airlines. And it's a short drive between both cities.
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32andBelow
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Re: Essential Air Service Program

Sun Feb 19, 2017 8:16 am

drdisque wrote:
RASM isn't really something that's part of the equation for EAS.

Your fares are part of your bid. Lowest fares goes a long way in winning the bid.

Low fares also keep pax count up and subsidy per pax down.

Low fare and low subsidy is not going to cover the costs of the aircraft especially if it's a 50 seat jet. And I don't know any EAS carriers that doesn't want their pet pac subsidy at 199.99. Also you are not locked in to any fare structure in your bid. Airlines can still use sales an RM principals to achieve any average fare they want as long as they keep their numbers high enough to stay under 200/pax.
 
Buddys747
Posts: 236
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Re: Essential Air Service Program

Sun Feb 19, 2017 12:40 pm

LNS has no reason to be in EAS program.
MDT is a 35 minute drive from Lancaster, and the further east you go, PHL and BWI are an hour to two at the most away. Even ABE for northern Lancaster is under an hour drive.
Amtraks keystone corridor also runs thru Lancaster. If there was a city to be cut, this would be one of them. Surprised as conservative as Lancaster is this stil exists.
 
TransGlobalGold
Posts: 248
Joined: Fri Feb 10, 2017 10:40 pm

Re: Essential Air Service Program

Sun Feb 19, 2017 1:37 pm

This may well be the only thing 45 and I agree on. EAS service is for the greatest parts, a waste of money. Aside from Alaska, most every airport in the system is in a 3-hourish drive time to the airport. Cities that had airline service pre-deregulation think they should still have it. When the get it, it's usually a bust. The airport I grew up near, MKL (Jackson, TN) had Souther Airways for years, then NW Airlink. It's 90 miles to MEM, not a bad drive. Under EAS, there have been flights to MEM, STL several times, and BNA a couple of times. Some days reported boarding were 3-5 pax. That's not sustainable.
 
c933103
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Re: Essential Air Service Program

Sun Feb 19, 2017 2:52 pm

drdisque wrote:
They use the 50 seat RJ has much lower CASM than a 19 or 30 seat prop and because these branded operations already have them in their fleet and paid for.

Aerodynamics Inc. and ViaAir are trying their hand at un-branded 50 seat jet operations (because the cost of acquisition for a 50 seat RJ has fallen so low). Aerodynamics is flying DEN-PIR-ATY and Via is flying SHD-CLT and CKB-BWI/CLT and LWB-CLT both on an ERJ-145 for some of the flights Via is tagging on a flight to SGJ or SFB so they can be sort of a hybrid of a traditional EAS carrier and a carrier like Allegiant (flying small cities to Florida).

But weren't aircrafts like ATR-42 or Dash-8-300 only cost about half as much to fly compare to those 50-seats RJ?

And of course 19- and 30- seats aircraft would have higher CASM but if the amount of passengers you're transporting is less than what ATR42 can and would be sufficient to use those 19- to 30- seats aircrafts, then the cost per passenger mile wouold be even higher for RJs.
 
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AVLAirlineFreq
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Re: Essential Air Service Program

Sun Feb 19, 2017 3:22 pm

You won't see EAS go away--we've been having this same discussion for years--but it wouldn't surprise me to see changes to the program.
 
commavia
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Re: Essential Air Service Program

Sun Feb 19, 2017 3:37 pm

AVLAirlineFreq wrote:
You won't see EAS go away--we've been having this same discussion for years--but it wouldn't surprise me to see changes to the program.


:checkmark:

As much as I agree about some EAS markets being a complete and utter waste of taxpayer money, I also agree that the best we're ever likely to see is further tightening of program requirements. Given worsening fiscal constraints and competing political priorities, It seems plausible that legislators may end some of the more egregious EAS subsidies for cities - some highlighted in this thread - that are quite close to non-subsidized airports.
 
Skywatcher
Posts: 527
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Re: Essential Air Service Program

Sun Feb 19, 2017 5:20 pm

EAS is total pork. The ever increasing hypocrisy/alternative facts environment in DC will ensure it's continued existence unfortunately. I love the people who say "it's only a drop in the bucket" as justification for it. I would say you have to start with the easy stuff like cutting EAS before you have any chance of taming Medicaid, Social security or any other massive entitlement programs. Canada has no EAS program and is even larger with further population scatter than the lower 48.
 
drdisque
Posts: 305
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Re: Essential Air Service Program

Sun Feb 19, 2017 8:58 pm

c933103 wrote:
drdisque wrote:
They use the 50 seat RJ has much lower CASM than a 19 or 30 seat prop and because these branded operations already have them in their fleet and paid for.

Aerodynamics Inc. and ViaAir are trying their hand at un-branded 50 seat jet operations (because the cost of acquisition for a 50 seat RJ has fallen so low). Aerodynamics is flying DEN-PIR-ATY and Via is flying SHD-CLT and CKB-BWI/CLT and LWB-CLT both on an ERJ-145 for some of the flights Via is tagging on a flight to SGJ or SFB so they can be sort of a hybrid of a traditional EAS carrier and a carrier like Allegiant (flying small cities to Florida).

But weren't aircrafts like ATR-42 or Dash-8-300 only cost about half as much to fly compare to those 50-seats RJ?

And of course 19- and 30- seats aircraft would have higher CASM but if the amount of passengers you're transporting is less than what ATR42 can and would be sufficient to use those 19- to 30- seats aircrafts, then the cost per passenger mile wouold be even higher for RJs.


It's common A.Net fallacy that 30 seat props like the Dash 8-300 and ATR-42 are significantly cheaper to operate than a 50 seat RJ. They're not. Especially when you already have CRJ's bought and paid for in the fleet.

OO actually gets decent loads on most of their 50 seater EAS routes - of course they cherry-pick the ones with the most potential to bid on.
 
dtw2hyd
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Re: Essential Air Service Program

Sun Feb 19, 2017 10:32 pm

There is nothing wrong in having a EAS program. Subsidy should be used to connect the last leg of an route without any service. Not $8000 per seat to comfortably haul congresspersons nonstop from DC to their town on a RJ right after blocking an important vote on the last day prior to recess.
 
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ODwyerPW
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Re: Essential Air Service Program

Mon Feb 20, 2017 1:35 am

BobPatterson wrote:
Hagerstown is above $300 or $600 depending on how passengers are counted.
Hagerstown has been in the program for quite some time. Back in 2006 they averaged 5.4 pax per flight at a cost to the pax of $77 and taxpaper subsidy of $130.
In 2012 (different destination airport and carrier) costs were $50 per pax plus $176 subsidy for 2.6 pax/flight.
I didn't see the current 2017 pax out-of-pocket cost where the subsidy is $312 (most likely) or $624.
Hagerstown folks can drive about 76 miles to BWI or about 65 miles to IAD. Or they can use this expensive, taxpayer supported air taxi service.
What a boondoggle.


I couldn't agree more. As a tax payer, it's infuriating to subsidize flights for lobbyist and politicians from a suburb in Maryland to WashingtonDC. An abuse of the intended purpose for EAS.

Honestly, you could probably only make the case for EAS for remote locations in Alaska, Upper Peninsula, Wyoming, Montana, Idaho and North/South Dakota. Some might say even along the Saint-Lawrence seaway for remote sections of Upstate NY, but that's a stretch.
learning never stops.
 
drdisque
Posts: 305
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Re: Essential Air Service Program

Mon Feb 20, 2017 3:21 am

That reminds me of the story of Ely, Nevada.

Ely is a truly remote community, it is 249 miles by road to LAS, 237 miles to SLC, and 181 miles to EKO (which only has 2-3 flights/day).

However, as it has a population of 4,255, it could never generate much in the way of passengers and was booted from the program as its subsidy was well over $1000/pax when communities only 30 or 40 miles from an unsubsidized airport stay in the system as they have better subsidy per pax ratios. I think that an easy first step to reform the system would be to exclude airports within 50 miles of an airport with daily unsubsidized service.
 
SonomaFlyer
Posts: 2010
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Re: Essential Air Service Program

Mon Feb 20, 2017 5:41 am

EAS only makes sense in areas of the West which are a very long way from a non-EAS airport. Think states such as Montana, Wyoming and Alaska. The eastern airports can often be tied to powerful members of the House or Senate who've kept those airports on the list.
 
flyfresno
Posts: 243
Joined: Tue May 02, 2006 6:18 am

Re: Essential Air Service Program

Mon Feb 20, 2017 6:03 am

dc10lover wrote:
Actually it should not be a "hub". Pendleton, Oregon is vey close to Pasco. PDT should not have tax payer airline service. PSC is not a hub but has a lot of service from 4 airlines. And it's a short drive between both cities.



The government's definition of "hub" is different from the traditional definition. Most of their medium and small "hub" airports are, in no way, actual hubs. It's just a way for them to classify airports by traffic.
 
frmrCapCadet
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Re: Essential Air Service Program

Tue Feb 21, 2017 11:41 pm

Odd fact. The Empire Builder from the Pacific Northwest to Chicago was once very popular because so few of the cities it served were served by (much) other modes of transportation. Two bad winter/springs and the oil/coal unit trains somewhat ruined its time schedule, and hence traffic. My view is that subsidies to rural and remote areas need to be mode neutral.

Isolated cities and villages should have some sort of minimal transport to the nearest bus/train/airport, and minimal subsidies to make it happen. Insurance costs alone can kill a lot of possible connections, so a not-for-profit organization could solve many of these problems. There likely are people driving from most isolated areas to an airport, but once there is even a whiff of commercial activity regulations and insurance kill any possibility of sharing rides.
Buffet: the airline business...has eaten up capital...like..no other (business)
 
TUSDawg23
Posts: 201
Joined: Sun May 30, 2010 2:43 am

Re: Essential Air Service Program

Wed Feb 22, 2017 3:08 am

Skywatcher wrote:
EAS is total pork. The ever increasing hypocrisy/alternative facts environment in DC will ensure it's continued existence unfortunately. I love the people who say "it's only a drop in the bucket" as justification for it. I would say you have to start with the easy stuff like cutting EAS before you have any chance of taming Medicaid, Social security or any other massive entitlement programs. Canada has no EAS program and is even larger with further population scatter than the lower 48.


Look, I'm all about having a conversation with respect to what EAS routes should be kept or discarded, but to simply eliminate the whole program is mindless thinking. There are many laissez-faire thinkers on this website who have no understanding about the impact that air service can have on a smaller community and that it's just not as simple as, "well if you don't like it then move." Like it or not, the the program is providing economic benefits to communities and at the very least, creating jobs for these communities and the smaller commuter airlines to operate these routes.
 
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BobPatterson
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Re: Essential Air Service Program

Wed Feb 22, 2017 4:56 am

TUSDawg23 wrote:
Skywatcher wrote:
EAS is total pork. The ever increasing hypocrisy/alternative facts environment in DC will ensure it's continued existence unfortunately. I love the people who say "it's only a drop in the bucket" as justification for it. I would say you have to start with the easy stuff like cutting EAS before you have any chance of taming Medicaid, Social security or any other massive entitlement programs. Canada has no EAS program and is even larger with further population scatter than the lower 48.


Look, I'm all about having a conversation with respect to what EAS routes should be kept or discarded, but to simply eliminate the whole program is mindless thinking. There are many laissez-faire thinkers on this website who have no understanding about the impact that air service can have on a smaller community and that it's just not as simple as, "well if you don't like it then move." Like it or not, the the program is providing economic benefits to communities and at the very least, creating jobs for these communities and the smaller commuter airlines to operate these routes.


As of October 2016 there were about 110 communities (excluding Hawaii and Alaska) that "qualified" for ESA programs:

https://cms.dot.gov/sites/dot.gov/files ... ct2016.pdf

Can you give us some idea as to how many you would agree to cut, and what the economic benefits would be like for those that you'd keep?

Oh, and why do some EASP localities manage to get flights to places like Orlando instead of only to the nearest airport offering a connection via a major airline? Even Hagerstown, MD offers flights to BWI but not to the casinos in Atlantic City or a few miles from Reagan National in D.C.
Facts are fragile things. Treat them with care. Sources are important. Alternative facts do not exist.
 
drdisque
Posts: 305
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Re: Essential Air Service Program

Wed Feb 22, 2017 5:22 am

EAS does not subsidize any flights to Orlando.
 
philabos
Posts: 21
Joined: Thu Mar 27, 2014 8:24 pm

Re: Essential Air Service Program

Thu Feb 23, 2017 2:14 am

Buddys747 wrote:
LNS has no reason to be in EAS program.
MDT is a 35 minute drive from Lancaster, and the further east you go, PHL and BWI are an hour to two at the most away. Even ABE for northern Lancaster is under an hour drive.
Amtraks keystone corridor also runs thru Lancaster. If there was a city to be cut, this would be one of them. Surprised as conservative as Lancaster is this stil exists.

2.6 million subsidy, 5 round trips per day, two to BWI, 3 to PIT, 3700 passengers per year or about one per flight, subsidy $700 plus per passenger.
Lots of conservatives, but an airport board who wants it and knows how to get the politicians. Newspaper also loves it. After all, it's only federal money.
 
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knope2001
Posts: 2510
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Re: Essential Air Service Program

Thu Feb 23, 2017 3:33 am

Lancaster and 22 other cities are on the chopping block for excessive subsidy and/or not hitting 10 daily average enplanements.

They have appealed and received a temporary waiver, but unless their numbers improved they'll be canned.


As for the Orlando question, EAS defines minimal acceptable service for each airport to be to one of a few designated nearby hubs with a minimum level of frequency and capacity. The point is to offer a minimum level of useful connectivity to the national airline network. So Grand Island still gets subsidized service to Dallas even though Allegiant has a few weekly nonstops to places like Vegas.
 
FATFlyer
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Joined: Fri May 18, 2001 4:12 am

Re: Essential Air Service Program

Thu Feb 23, 2017 5:16 am

flyfresno wrote:
VIS later withdrew from the EAS program and took a payout for airport improvements in lieu of the subsidiary, but had they not chosen to, they would still qualify

Technically VIS did not stop being an EAS city.

Instead VIS agreed to accept a grant equal to 2 years of their subsidy (in this case a $3.7 million grant to build additional hangars) from the Community Flexibility Pilot Program. In return VIS agreed to having no subsidized EAS service for 10 years.
http://cms.dot.gov/office-policy/aviation-policy/community-flexibility-pilot-program

Unless the EAS program rules change, VIS remains qualified for EAS service and could see subsidized service resume at the end of the 10 years.
"Travel is fatal to prejudice, bigotry, and narrow-mindedness." - Mark Twain
 
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BobPatterson
Topic Author
Posts: 2068
Joined: Thu Nov 26, 2015 7:18 am

Re: Essential Air Service Program

Thu Feb 23, 2017 11:04 pm

I originally posted:

BobPatterson wrote:
.......why do some EASP localities manage to get flights to places like Orlando instead of only to the nearest airport offering a connection via a major airline? Even Hagerstown, MD offers flights to BWI but not to the casinos in Atlantic City or a few miles from Reagan National in D.C.


To which, you responded:

drdisque wrote:
EAS does not subsidize any flights to Orlando.


The following is taken from an Alternative EASP document: https://www.regulations.gov/document?D= ... 28671-0122

"By Order 2013-2-26, issued on February 27, 2013, the Department selected Silver Airways Corp. (Silver) to provide EAS at Macon at an annual subsidy rate of $1,998,696. Under the terms of that contract, Silver was to provide six nonstop round trips per week to Atlanta and six nonstop round trips per week to Orlando (12 total weekly round trips), using 34-passenger Saab 340-B aircraft for the two-year period from March 15, 2013, through March 14, 2015."

"On August 5, 2014, Silver filed a 90-day notice of its intent to terminate service at Macon, effective November 5, 2014."

Thus, it appears that there was, until fairly recently, service to Orlando. However, I have only just now read this particular document, so my original posting must have been based on something else, perhaps on a much earlier document in the docket folder, or even in some other docket folder (different airport). It might also have been based on a proposed service that ultimately was not authorized.

Macon turns out to be an interesting case.

When DOT asked for new service offerings for Macon they received proposals from Corporate Flight Management, Inc. d/b/a Contour Airlines (CFM), American Aviation Group, Inc./Ultimate Jetcharters Airlines, Inc., Aviation Street, Inc. d/b/a Community Air, and Raven Air d/b/a Island Hoppers Aerial Adventures. Among the proposals were routes from Macon to Nashville, Charlotte, Washington, D.C., Orlando, Ft. Lauderdale, St. Pete/Tampa and Atlanta. For a number of reasons ALL of these proposals were rejected.

However, DOT did accept a proposal for Alternate EASP from Macon to Washington, D.C. using some creative writing:

"Service to Washington, D.C. will provide the Macon community and military personnel from nearby Robins Air Force Base with direct access to the community’s second most popular destination, and one-stop service to its most popular destination, and provide a connection to the national air transportation system on a variety of airlines that provide omni-directional air service. The Department would expect that under Macon’s unique circumstances, the required capital to rehabilitate a market that has been without any scheduled air service for such an extended period of time would require a higher than average funding level. Therefore, the Department finds that, although CFM will be offering a public charter service and not “scheduled air transportation,” its proposal seeking subsidy of $4,687,979 is an acceptable reflection of the subsidy needed to provide EAS at Macon under 49 U.S.C. §§ 41733(c) and 41737."

"The Middle Georgia Regional Airport’s application, which is incorporated here by reference, requests $4,687,979 per year under the AEAS program, for a two-year term, to fund public charter service to Washington, D.C., using 30-seat Jetstream 41 aircraft, at a 98 percent completion factor. This is the same frequency, hub destination, completion factor, and subsidy requirements proposed by CFM under Option C before the Department in the EAS carrier selection proceeding. Macon asserts that this service, by CFM “…has the best chance of success in Middle Georgia.”

This 12x weekly service to DC, bypassing Atlanta and other airports, rejected under an EASP proposal, is permitted under an AEASP by calling the program "public charter service".

So an airport (Macon) that has not been successful at generating enough traffic for 82-mile hops to Atlanta nevertheless qualifies for hardship subsidized funding for non-stop service to Washington, D.C.

That's what I call "Creative Government" putting your hard-earned tax dollars to work.
Facts are fragile things. Treat them with care. Sources are important. Alternative facts do not exist.
 
philabos
Posts: 21
Joined: Thu Mar 27, 2014 8:24 pm

Re: Essential Air Service Program

Thu Feb 23, 2017 11:51 pm

knope2001 wrote:
Lancaster and 22 other cities are on the chopping block for excessive subsidy and/or not hitting 10 daily average enplanements.

They have appealed and received a temporary waiver, but unless their numbers improved they'll be canned.


As for the Orlando question, EAS defines minimal acceptable service for each airport to be to one of a few designated nearby hubs with a minimum level of frequency and capacity. The point is to offer a minimum level of useful connectivity to the national airline network. So Grand Island still gets subsidized service to Dallas even though Allegiant has a few weekly nonstops to places like Vegas.

Don't bet on it.
The Lancaster EAS was brought in under Arlen Spector the better part of a decade ago. It has never performed and yet, it is still here.
 
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BobPatterson
Topic Author
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Re: Essential Air Service Program

Fri Feb 24, 2017 11:31 pm

While poking around trying to find actual line-item Federal budget data (so far unsuccessful) for the EAS program I ran across a report prepared by the Congressional Research Service in 2012 that suggests that, today, the majority of the subsidy funding comes from foreign airlines overflying the United States. I can imagine this would include European airlines flying non-stop to Mexico, Central America, some Caribbean localities and even northern South America. But I would also assume that it includes a large number of Canadian nonstop flights to points south of the USA.

This leads me to the incongruity that Canada, which has no ? subsidized EAS program, may be paying for the one in the USA.

Of course, one may argue that this is merely a budgeting ploy, permitting EAS advocates to claim "we aren't paying for this, they are.

Document source from which the data below are taken: https://digital.library.unt.edu/ark:/67 ... 2Oct03.pdf

"Consequently, while there seem to be annual reductions in spending levels for the program, these discretionary funding cutbacks are expected to be matched by an increase in mandatory funds generated by an increase in the revenues from overflight fees charged on foreign aircraft that fly through U.S. airspace but do not land in the country. As a result, funding of the EAS program is projected to remain at $193 million each year from FY2013 to FY2015 (see Table 1)."

........Table 1. Essential Air Service Funding (FY2011-FY2015) (in Millions)

.............................................FY2011 FY2012 FY2013 FY2014 FY2015
Discretionary Appropriation .....$ 150 .......$ 143....... $ 118....... $ 107....... $ 93

Overflight Fee Collections .........$ 50 .........$ 50 .........$ 75 ........$ 86 ......$ 100

Total Funding..........................$ 200 .......$ 193 ........ 193 .......$ 193 ......$ 193

Source: U.S. Department of Transportation.
Note: Projected overflight fee collections provided by Office of Management and Budget (OMB) Max Database.
Facts are fragile things. Treat them with care. Sources are important. Alternative facts do not exist.
 
drdisque
Posts: 305
Joined: Mon Mar 26, 2007 9:57 am

Re: Essential Air Service Program

Sat Feb 25, 2017 12:59 am

I meant that EAS did not currently subsidize any flights Orlando, and to my knowledge, that Silver Airways ATL-MCN-MCO flight was the only time MCO has ever gotten EAS service. Incidentally, the MCN-MCO flight was only flown for a few months. The Silver Airways ATL hub was a giant failure because Silver said they would get a codeshare with DL (which they never got), and the other markets they flew out of ATL (PIB, MSL, MEI) were all pretty lousy markets. PIB and MEI later got bid by AA to DFW and are doing much better. MSL did a few years muddling along with SeaPort and is now flown by Corporate Flight Management to BNA on a JS31 reconfigured for 9 seats called "Contour Airlines". It would not surprise me if MSL lost their EAS some time soon. This MCN AEAS is a pile too. AEAS has been great for MBL and has worked OK for VCT, but MCN is a money pit that should have been cut from the system.

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