Proposed federal aid cuts threaten rural airports

By JOHN FLESHER, The Associated Press
Posted May 11, 2011, at 4 p.m.

IRONWOOD, Mich. — A couple of times a month, Dr. Walter Beusse drives from his suburban Chicago home to Milwaukee, where he catches a flight north to Ironwood in Michigan’s remote Upper Peninsula to work in a hospital emergency room.

It’s a long commute. But it would be much longer if Ironwood had no commercial flights — a distinct possibility if Congress eliminates federal subsidies for carriers serving about 110 airports in rural communities and small towns across the lower 48 states.

The Essential Air Service program was established in 1978 when the government deregulated the airlines, enabling them to drop lightly traveled routes that lose money and focus on lucrative, big-city markets. It pays carriers to provide a minimum number of seats and trips from small airports to larger “hub” airports.

The $200 million program has long been a target of conservatives who consider it wasteful spending and political pork. But with 35 of the lower 48 states having at least one participating airport, supporters have fended off attempts to abolish or curtail it.

Now, amid record budget deficits and intense pressure to cut spending, backers acknowledge the program is more vulnerable than ever. It would be phased out by October 2013 under an aviation bill that cleared the Republican-controlled House in April.

A competing measure approved by the majority-Democrat Senate would continue the subsidies but tighten eligibility criteria, disqualifying community airports within 90 miles of a larger hub or average fewer than 10 passengers daily. The limits could dump up to 40 participating airports, according to a Senate aide.

Both bills would continue the subsidies for 44 airports in Alaska, where many communities are accessible only by air or sea.

The program is among many benefiting small towns and rural areas that once appeared secure but are now on the chopping block. Others threatened include community development grants, rural broadband expansion and community health centers.

House and Senate negotiators will determine the program’s fate, as airport managers and frequent fliers in small communities from Maine to California fret about losing passenger service close to home.

Beusse, 52, is among several part-timers who fly in regularly for spot duty at Aspirus Grand View Hospital near Ironwood, a town of 5,400 near Lake Superior in Michigan’s far western Upper Peninsula.

“It’s the only practical way to commute that distance,” Beusse said.

“When you have a big snowstorm, driving’s just impossible. And there are lots of snowstorms here.”

He might reduce his commitment to the hospital if commercial service is eliminated at the Gogebic-Iron County Airport — one more worry for physician recruiter Sheila Begalle, who scrambles to keep the 25-bed facility staffed.

“Recruiting doctors to a rural area is very difficult,” Begalle said. “If they feel isolated, it’s a big strike against you. It makes a good impression when I can tell them we can fly to Milwaukee and connect anywhere we need to go.”

But the airport would lose federal support under both pending bills, manager Duane DuRay says.

The distance requirement in the Senate measure wouldn’t be a problem; the nearest hub is Minneapolis, 213 miles southwest. But the Gogebic-Iron County Airport’s flights have drawn fewer than 10 boardings daily in recent years, which DuRay blames on poor service from a carrier that recently was replaced.

The new carrier, Frontier Airlines, reached a deal with the Department of Transportation providing a yearly subsidy of nearly $1.4 million, which will cover the company’s losses and return a 5 percent profit. Frontier calculated its expenses from the Ironwood-Milwaukee route at $2.3 million and said passenger fares would total about $1 million.

Company spokesman Peter Kowalchuk said he couldn’t speculate on whether Frontier would drop the route if the federal program ends. The subsidies were a factor in the company’s decision to serve Gogebic-Iron County and are especially important with the recent jump in fuel prices, he said. Still, he acknowledged that unprofitable route segments could be worthwhile if they steer enough passengers to busier hubs.

DuRay, however, is convinced that abolishing the subsidies would doom passenger service to his airport, which opened a new $1.3 million terminal last fall. The airport would be downgraded to general aviation status, its hours would be shortened and grants for maintenance such as runway repair would be scarcer, he said.

“It’s a horrible way of trying to save money because in the end it’s going to cost money,” DuRay said. “It will just amplify the economic problems our community already has.”

Most of the small airports are owned by counties or cities, but neither they nor cash-strapped states can afford to continue the subsidies if the federal government backs out, supporters say. Congress in 2003 called for at least a handful of communities to provide matching funds, but lawmakers repeatedly have blocked the requirement from taking effect.

“Congress has historically held that it is responsible for upholding a promise it made to those communities,” said Faye Malarkey Black, a vice president of the Regional Airline Association.

Critics aren’t convinced. Sen. John McCain tried to abolish the program last December, calling it “far from essential.” Republicans on the House Transportation Committee said phasing it out would save $400 million over four years.

Dan Kasper, a consultant with Compass-Lexecon Economics in Boston, said using taxpayer money to preserve flights to far-flung communities makes less sense as fuel prices rise and small aircraft used for such flights become outdated. Local officials want to retain passenger service for “civic pride,” he said. “But with the exception of a very few places, Alaska most prominently, there are cost-effective alternatives” such as providing express bus service to hub airports.

Traffic at Gogebic-Iron County Airport may be light, but it includes regular fliers from the hospital, a community college and companies that manufacture plastics and fabrics. Losing commercial service would hurt their bottom lines while making it harder to recruit new businesses, DuRay said.

Doctors, attorneys and visitors to the Boot Hill Casino and Resort in Dodge City, Kan., are among regular users of its community airport, said manager Mike Klein. He’s organizing an e-mail campaign to preserve subsidies for flights to and from Denver, 350 miles away.

In coastal Maine, the subsidized Hancock County-Bar Harbor Airport provides a link to Boston for staff of a local genetic research laboratory while tourists fly in to visit Acadia National Park, manager Allison Navia said.

One new member of Congress, Rep. Dan Benishek, illustrates the competing pressures for Republicans who were elected after pledging to downsize government yet represent districts benefiting from the airport program. Benishek’s northern Michigan district has six subsidized airports, including Gogebic-Iron County.

He voted for the aviation bill that would end the subsidies, saying it had “many important provisions.” Then he promised to seek restoration of the subsidies before the bill is enacted.

“I do not see air service in rural areas as unnecessary or reckless spending,” he said.

Associated Press writer Mike Householder contributed to this story from Detroit.

 

http://bangordailynews.com/2011/05/11/business/proposed-federal-aid-cuts-threaten-rural-airports/ printed on October 24, 2014