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US government paying for empty flights

August 12, 2011

On some days, the pilots with Great Lakes Airlines fire up a twin-engine Beechcraft 1900 at the Ely, Nev., airport and depart for Las Vegas without a single passenger on board. And the federal government pays them to do it.

Federal statistics reviewed by The Associated Press show that in 2010, just 227 passengers flew out of Ely while the airline got $1.8 million in subsidies. The travelers paid $70 to $90 for a one-way ticket. The cost to taxpayers for each ticket: $4,107.

Ely is one of 153 rural communities where airlines get subsidies through the $200 million EssenAir Service programtial , and one of 13 that critics say should be eliminated from it.

Some call the spending a boondoggle, but others see it as a critical financial lifeline to ensure economic stability in rural areas.Steve Smith, executive director of the Jackson, Tenn., airport authority, also has seen empty or near empty flights take off, since the airlines get paid per flight, not per passenger.

The subsidy amounted to $244 for each of the 2,514 people who flew out of Smith’s airport last year, though few if any passengers knew that.

“They fly the empty plane so they can still get the money,” Smith said.
The fight over the subsidies was a key sticking point that led to the recent political standoff in Washington that temporarily shut down the Federal Aviation Administration, putting thousands out of work for nearly two weeks.

There were other disputes as well, such as a GOP proposal that would make it more difficult for airline workers to unionize.

Republicans got the EAS cuts they were looking for in last week’s agreement — but with a major caveat. Subsidies to Ely, Jackson and 11 other communities are set to end, but Transportation Secretary Ray LaHood has the authority to continue them if he decides it’s necessary.

Republican: ‘Crucial engines of job creation’
Rep. David McKinley, a Republican who came into office with tea party support, sided on the issue with Democratic Sen. Jay Rockefeller, a fellow West Virginian who has used his position as chairman of the Senate Committee on Commerce, Science and Transportation to support the current funding.

Flights out of Morgantown, W.Va., were among those targeted by other Republicans. A $1 million subsidy amounted to about $52 for each of Morgantown’s more than 10,000 passengers last year.

McKinley describes himself “as a small government, free-market focused owner of a small business,” but said airports that receive subsidies “serve as crucial engines of job creation for many small towns and rural areas.”

The EAS was created to ensure service on less profitable routes to remote communities when airlines were deregulated in 1978.

A spokesman for the Department of Transportation did not respond to a request for comment about the program, which has grown in scope and cost.

In 1999, the EAS served 89 communities — 68 in the continental United States, one in Hawaii and 20 in Alaska. Today, it serves 45 in Alaska and 108 elsewhere, and over the last 10 years the budget quadrupled from $50 million to $200 million.

The subsidies go to about a dozen airlines, but in 2010 almost one-third of the entire budget — $67.8 million — went to Great Lakes, which is based in Cheyenne, Wyo. The company did not respond to requests for comment.

Ely is an extreme case. The House Transportation and Infrastructure Committee said it is one of just three cities in the program that have subsidies higher than $1,000 per passenger. The others are Glendive, Mont., and Alamogordo, N.M.

No bus service
Republicans targeted flights out of other cities such as Morgantown because they are relatively close to major airports.
Mike Coster, Ely’s airport manager, said the location between Las Vegas and Salt Lake City is the most remote airport in the continental United States.

“We have no bus service here of any kind, no Greyhound or similar company,” Coster said. “It’s a small town.”

Severin Borenstein, a professor at the University of California, Berkeley who helped design the EAS program, said Congress originally intended for the program to end after 10 years. He said the subsidies are a “big problem” in a
place like Ely, which averages one or two passengers per flight.

“I can see the argument for making some of them permanent, but the standards should be higher,” Borenstein said.

“The real story with this program nationwide is that nobody is watching it,” said Smith, the Tennessee airport official. “If there is a problem with airports and airlines not carrying enough passengers and not doing what they said they would do, it’s because once the contract is issued, it’s like nobody ever asked a question about it again.


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