WASHINGTON, D.C. - When the federal government deregulated the airlines in 1978, it eased concerns that smaller communities would get stranded with a program called Essential Air Service. The program guaranteed that towns with air service as of October 1978--provided they were further than 70 miles from a bigger airport--would be eligible for subsidies keeping some measure of that service in place.
In fiscal 1995, EAS's cost stood at $37 million per year. Following the Sept. 11, 2001, attacks, Congress bumped up funding for EAS from $50 million to $113 million. A month ago, the program was reauthorized. Price tag: $127 million for each of the next four fiscal years.
If that subsidy creep looks worrying, research from transportation think tank Reconnecting America suggests things will only get worse without changes in transportation policy.
In 2002, the group released "Missed Connections," a survey quantifying the drop in air service at various categories of airports during that year. That report argued, however, that the declines were more than just a result the Sept. 11 attacks and the economy's downturn; instead, they reflected fundamental structural changes sweeping the airline industry.
Last month, the organization published "Missed Connections II," a follow-up study that largely reinforced the earlier findings. At large-hub airports, for example, the number of weekly flights declined 1.7% from 2002 to 2003, on top of the 9.5% drop shown from 2001 to 2002. Medium and smaller hubs had a slight 0.1% gain in weekly flights but still showed a 9.6% reduction from 2001 to 2003. Smaller communities were some of the biggest losers--just 20% of those surveyed showed gains in weekly flights, while 80% either stayed flat or declined.
Full story at Forbes.com