Trump questions if subsidies are a boost for small airports
HAGERSTOWN, Maryland: It took decades, but in June, Clifton Gee landed his dream job - as a pilot for Southern Airways Express ferrying passengers on short-hop flights between the tiny one- gate airport in Hagerstown, Maryland, and two larger hubs in Baltimore and Pittsburgh, Pennsylvania.
The work enables Gee, who grew up the western Maryland community, a rare opportunity for a commercial pilot: To fly all day and still be home for dinner almost every night. And Gee is eager to hold on to it. But a proposal by the Trump administration would do away with the programme that made Gee’s job possible.
As part of an effort to reduce government spending, Trump has proposed cutting US$ 175 million in funding for the Essential Air Service ( EAS) program, which offers subsidies to airlines to connect smaller airports such as Hagerstown to larger ones. The plan, unveiled in late May, is part of US$ 2.4 billion in cuts proposed for the US Transportation Department.
“The Administration believes that airport and air service support for small and rural communities can be provided in a better and more efficient way, and the Department anticipates a portion of the upcoming infrastructure bill will be dedicated to the transportation needs of rural communities,” a Transportation Department spokeswoman said.
A bipartisan group of law makers, many of whom represent rural communities and states that use the program, opposes the cuts and have vowed to save it.
“The USDOT’s Essential Air Service programmme connects over 170 small communities in the United States to the National Air Transportation System, providing them an essential connection point for travel throughout the country,” wrote a bipartisan group of senators including Mike Rounds, Dan Sullivan, Benjamin Cardin, and Chris Van Hollen, in a letter to the top members of the Senate Appropriations Committee. “Without this programme, these communities would lose air service as airlines would move to only serve more profitable markets. That would leave some communities hundreds of miles away from the nearest large- or medium-hub airport.”
Added Republican John Delaney, whose district includes Hagerstown: “Eliminating the Essential Air Service might look good on a spreadsheet, but in the real world, in places like Hagerstown, you see how it will hurt local economies that need every boost they can get. The Essential Air Service [ program] has been good for Hagerstown and good for the region.”
EAS was established in 1978 in the wake of airline deregulation to ensure that smaller communities such as Hagerstown didn’t lose service. But in its budget proposal, the Trump administration argued that now is the time to end what was designed to be a temporary programme.
The programme offers a perpassenger subsidy to offset the cost of offering service in smaller markets. The amount of the subsidy varies by location and is capped. In general, airports must be at least 70 miles from a larger airport to qualify for the programme. Hagerstown Regional Airport is about 77 miles on most commonly travelled roadways from Washington Dulles International Airport and 88 miles from B a l t imo r e - Wa s h i n g t o n International Marshall Airport.
EAS has been a frequent target for those seeking to reduce government spending. Numerous reports over the years have questioned whether the subsidized flights are the most cost- effective way to connect people to the nation’s transportation network. Despite Congress’s efforts to tighten requirements and control costs, a recent report by the Congressional Research Service said that costs have continued to climb.
As airports go, Hagerstown, which opened in 1928, is a traveller’s dream: Friendly service, free parking and cheap fares. Walk in the front door and you’re just steps from your gate.
Like the airline industry, Hagerstown has experienced its own cycle of boom and bust. At its peak, 50,000 to 60,000 passengers passed through the tiny airport each year. At its lowest point, it lost both its EAS subsidy and regular commercial air service. Even after it won back the subsidy and christened a US$ 62 million runway extension in 2007, it still had trouble attracting a commercial carrier.
But in 2008, Allegiant Air began offering service to several cities in Florida. A year later, it brought on a second carrier, Cape Air, through the EAS programme.
Today, Allegiant offers flights four times a week to Florida, along with Southern Airways, which offers daily flights to BWI and Pittsburgh International.
The latter is made possible because of EAS. According to the most recent data from the Transportation Department, Hagerstown receives US$ 1.7 million in subsidies through the programme.
“We believe HGR is a strong market as it has already demonstrated with Allegiant service there,” said Mark Cestari, executive vice president for business development at Southern Airways Express. “EAS support enables us to maintain the frequency of our operation - and our low fares. Changes to the current system would obviously necessitate a fresh look at our operation and many other market and economic factors.”
Cestari said about a dozen people work for Southern at Hagerstown. The airline also contracts with a local outfit that paints the company’s nine- seat planes.
“There’s definitely a risk that ( Southern) would go away,” said Phil Ridenour, the airport’s director. “The goal is for that airline to do so well, it can sustain its operations if EAS goes away, but they’re not close to that point at this time.”
Any loss of passengers could put federal dollars that help pay for airport upkeep at risk, he said. — WP-Bloomberg