Senate defense bill may salvage 44 EAS cities

 - May 29, 2008, 8:05 AM

The $63 million appropriated for the Essential Air Service program in this year’s transportation bill appeared likely to increase to a level closer to the full $120 million authorized by the Transportation Safety and Stabilization Act, as conferees last month weighed a Senate defense appropriations bill that would add another $57 million in EAS funding. Depending on the outcome of a conference committee report, expected by the close of the last congressional session on December 21, the 18 communities slated to lose their EAS funding on October 1 could receive their subsidies for another year.

The $120 million earmarked for EAS by the airline stabilization bill matched the amount the Regional Airline Association cited as the minimum needed to maintain service to all the communities currently included in the program. As written, the Senate defense appropriations bill not only raises funding by $57 million, it explicitly guarantees that no city on the EAS list before September 11 will lose its subsidies, according to Regional Aviation Partners chairman Maurice Parker. Without the additional funding in the defense bill, at least 44 cities stood to lose their EAS subsidies, estimates RAA.

Upon returning from a week of intense lobbying on Capitol Hill as AIN prepared to go to press, RAA legislative affairs director Faye Malarkey expressed cautious optimism that the conferees would arrive at a final bill by Christmas. However, whether or not the committee appropriated the entire $57 million remained subject to compromise, as had the language that would shield all EAS cities from losing their service this year. Informed estimates placed the amount closer to $37 million, bringing the combined DOT-DOD appropriations to $100 million. Asked whether that amount could support the program as it exists today, Malarkey offered only a “maybe.”

While legislators congratulated themselves for increasing the level of EAS funding from the previous year’s $50 million to $63 million in the DOT appropriations bill, Malarkey reminded that, conservatively, EAS costs have risen 35 percent since September 11, primarily as a result of extra security measures and higher insurance premiums. Further cost burdens have come from the rate of service cancellation notices submitted by the likes of Northwest Airlines, which has notified the DOT of its plans to close nearly 20 subsidized routes in the past four months. Meanwhile, as revenues plummeted across the industry, the nation’s smallest carriers benefited the least from the stabilization bill’s direct aid program because it allocated funds based on available seat miles flown during the previous year.  

Aside from the money allocated to the EAS program under the defense and transportation budgets, the Small Community Air Service Development Zone received its first appropriation since legislators included it in AIR-21 as an incentive to draw regional jets to underserved markets. RAA managed to get $20 million of a maximum $27 million included in this year’s DOT budget after meeting stiff resistance to any level of funding last year.