How We Pay $3,700 Per Passenger to Subsidize Airline Tickets

Last July, the fate of EAS was one of the key provisions that held up passage of the Federal Aviation Administration funding bill. While the FAA bill got a lot of attention in the mainstream media over the government's inability to collect taxes from the airlines and the furloughing of thousands of unionized workers, most general news reporters ignored the subsidy program.

The subsidy program, however, has been at the heart of conservative political objections over the FAA bill.

An Associated Press analysis shows that in 2010, just 227 passengers flew out of Ely, Nevada, while Great Lakes Airlines got $1.8 million in windfall subsidies. Meanwhile the passengers paid only $70 to $90 for a one-way ticket. The cost to taxpayers for each ticket was $4,107. Thus, online travel website Trip Advisor advertises "Cheap Flights to Ely, Nevada."

In an editorial in the Ely Times in April of this year, the paper concedes,

Some communities receiving the subsidy are located within easy drive distance of airports that are flight hubs.  Some communities have developed other forms of transportation and no longer are dependent on air travel.

Overall, airline companies get subsidies to fly into 153 cities, many of which are only about an hour away from a major airport. Federal money is paid to the airlines and in return they agree to fly into small-town airports.

According to the House Committee on Transportation, in fiscal year 2010, 34 EAS communities averaged fewer than 10 passengers per day per airport. Of these 34 communities, 22 had so few passengers that, on average, there were more pilots onboard the flights than passengers.

A review of the U.S. Department of Transportation data shows how low the passenger traffic has been at these subsidized airports. Three River Falls, Minnesota, for example has an annual flight occupancy rate of 12%. Greenville, Massachusetts, is 28%. Devils Lake, North Dakota, is at 30%, and Watertown, South Dakota, has an occupancy rate of 35%. The list goes on.

The truth is that today most of the EAS communities are between one hour and 90 minutes of a major airport. According to House data, in 2010, 42 communities had subsidized each passenger more than $200. Of those 42 communities, 16 had subsidies in excess of $500 per passenger.

The result is that air routes have been politicized throughout the country. Routes are not subsidized as much by need as by political connections. Democratic lawmakers in Maryland have been able to get Hagerstown subsidized as an EAS city. Yet the city is only 70 minutes from the Baltimore-Washington International Airport. Democratic lawmakers in Muskegon, Michigan, won subsidies for flights when the Grand Rapids airport is only 40 miles away.

The problem isn't only with Democrats. Former Republican Senator Arlen Specter (R-PA) and fellow Republican Rep. Joe Pitts demanded that the U.S. Department of Transportation recalculate the distance from Lancaster, Pennsylvania, to Philadelphia. Lancaster was only 68 miles from the large Philly airport. The Transportation Department used to consider communities if they are at least 70 miles away from a major air hub. Strong-arming DOT, Specter and Pitts got an "alternative" route considered that put Lancaster 80 miles from Philadelphia International Airport. They won EAS designation.

Political pressure is also exerted by the airlines themselves. Portfolio claims that earlier this year Delta Airlines used "greenmail" by demanding more federal EAS payments or they would pull out of 24 small communities.